Introduction to the Fair Labor Standards Act (FLSA)

C. E MPLOYEES W ORKING AT T WO OR M ORE R ATES If an employee in a single workweek performs two or more different types of work for which different (non-overtime) rates of pay have been established ( e.g ., an out-of-class assignment), the employee’s regular rate of pay will be one of the following two rates:

 A weighted average of the different rates; 185 or

 The rate for the type of work performed in excess of 40 hours, if there is a prior agreement to this effect. 186

D. P AYMENTS THAT M AY BE E XCLUDED FROM THE R EGULAR R ATE The FLSA identifies certain categories of compensation that may be excluded from the employee’s regular rate of pay. The Act also specifies that these are the only types of compensation that may be excluded. Thus, any form of compensation that does not fit into one of these categories must be included in the employee’s regular rate of pay. The following items are types of compensation that may be excluded from the employee’s regular rate of pay:

 Gifts that are not dependent on hours worked; 187

 Payments made for vacation, holiday, illness or other payments for time not worked; 188  Reimbursements for reasonable work-related expenses that do not exceed the cost of the expense; 189  Payments irrevocably made to a trustee or third person pursuant to a bona fide plan for providing retirement, life, accident or health insurance or similar benefits; 190  Extra compensation for overtime paid pursuant to an ordinance, rule or collective bargaining agreement provision (such as overtime pay for hours over 8 in a day); 192 and  Extra compensation paid work performed on the 6th and 7th days of a work period, Saturdays, Sundays or holidays, as long as the extra pay is at least 1½ times the regular rate. 193  Discretionary bonuses; 191

The premium portion of any overtime payments included in the last two items mentioned above can be credited toward overtime due under the FLSA. 194

Introduction to the Fair Labor Standards Act (FLSA) ©2020 (s) Liebert Cassidy Whitmore 38