2019-05687: Regular Rate Under the Fair Labor Standards Act

Summary

The Fair Labor Standards Act (FLSA or Act) generally requires that covered, nonexempt employees receive overtime pay of at least one and one-half times their regular rate of pay for time worked in excess of 40 hours per workweek. The regular rate includes all remuneration for employment, subject to the exclusions outlined in section 7(e) of the FLSA. Part 778 of Title 29, Code of Federal Regulations (CFR), contains the Department of Labor's (Department) official interpretation of the overtime compensation requirements in section 7 of the FLSA, including requirements for calculating the regular rate. Part 548 of Title 29 implements section 7(g)(3) of the FLSA, which permits employers, under specific circumstances, to use a basic rate to compute overtime compensation rather than a regular rate. The Department has not updated many of these regulations, however, in more than half a century--even though compensation practices have evolved significantly. In this Notice of Proposed Rulemaking (NPRM), the Department proposes updates to a number of regulations both to provide clarity and better reflect the 21st-century workplace. These proposed changes would promote compliance with the FLSA; provide appropriate and updated guidance in an area of evolving law and practice; and encourage employers to provide additional and innovative benefits to workers without fear of costly litigation.

The agency’s own summary, as published.

What this changes

Amends 2 parts of the Code of Federal Regulations — the standing rules this notice rewrites.

• 29 CFR 548 Authorization of Established Basic Rates for Computing Overtime Pay
• 29 CFR 778 Overtime Compensation