September 09, 2019

New U.S. Department of Labor regulations that would let employers exclude certain bonuses and nonwage jobs perks when calculating workers’ overtime pay are on the verge of being finalized now that the White House Office of Management and Budget has received the final rule.

Securing clearance from the OMB, which the rule got on Sunday, is the last hurdle the regulations need to clear before being finalized, which a DOL spokesperson told Law360 could happen in the next few weeks.

The rule, which the DOL’s Wage and Hour Division proposed in March, would relax requirements on employers to include nonwage payments that would otherwise boost workers’ overtime rate the Fair Labor Standards Act sets at one-and-one-half times their "regular rate" for each hour worked over 40.

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But the regulation may not be a good thing if the regulation leads more employers to offer more perks, said Cohen Milstein Sellers & Toll PLLC attorney D. Michael Hancock, a former WHD assistant administrator who represents workers in wage suits

"My only concern, frankly, is that we will see a net decrease over time in what would otherwise be cash wages, as more compensation is moved into these benefit categories," Hancock told Law360 in March.

The complete article can be viewed here.