In another effort to assist businesses in maintaining compliance with the often-tricky Fair Labor Standards Act, the Department of Labor proposed regulations in late March that make it easier to determine whether bonuses are discretionary, and eliminate the inclusion of paid leave in the calculation of the regular rate. The DOL also proposed clarifications to “confirm that employers may exclude” from the regular rate of pay:
Most notably, especially for public employers, the Department of Labor is attempting to clarify the “call-back” language of 29 CFR 778.221 and 29 CFR 778.222, by removing the words “infrequent and sporadic” from the sections. As you may already know, call-back pay is excluded from the regular rate. The current DOL does not believe the FLSA is meant to limit the exclusion of call-back pay to only infrequent and sporadic instances of call-backs. Instead, the agency is focused on the lack of prearrangement, or the spontaneous need for work to be performed. If an employee can prove that he or she is going to be called back to work on a specific day at a specific time with regularity, it is possible that those hours may be included in the regular rate.
With the new regulations, employers can expect more clarity as to what is and is not to be included in the regular rate, and this should hopefully alleviate some of the stress employers get when it comes to getting an employee’s regular rate right.
As you can see, now that the DOL leadership has had a chance to become more established, the changes benefiting employers have increased, and the department has done away with some of the more employee-friendly interpretations of the previous administrations. Just a reminder that these are only proposed regulations; not law. For up-to-date information on changes in the law and how they can affect your business, contact the professionals at the Wiley Law Office for advice that works.