U.S. looks to tweak overtime calculation rules

The U.S. Department of Labour proposed changes to the regulations surrounding overtime pay. The move aims to boost the benefits that employers can offer while providing increased protection against lawsuits.

The rule would look to clarify and update the “regular rate requirements”. These define the rules around what employers must consider when calculating “time and a half” pay for those eligible. Should the changes go through, this would be the first time in 50 years that amendments to these rules would have happened.

Keith Sonderling, the acting administrator for the Labour Department’s wage and hour division, said, “The regular rate proposal would provide clarity for employers to allow them to add more benefits to their employees without unknown overtime consequences or litigation. This proposed rule offers a positive path forward to employers and employees alike.”

Currently, the Labour Department advised employers to be wary of offering employees perks. Providing things such as wellness programs, payment of unused sick pay, or tuition reimbursement often comes with unforeseen calculations. They lie somewhere in the grey area of “what does overtime pay include?” This can often lead to an opportunity for restaurants to be sued. The proposed law change would allow employers more freedom to offer benefits without having to worry about backlash.