Daily Labor Report®

Do Referral, Longevity Bonuses Affect Overtime Pay? It Depends

March 26, 2020, 10:07 PM

Paying workers a reward for their longevity or for referring a new hire to the company will sometimes mean companies also need to fork over more overtime pay, the Labor Department said in a series of opinion letters.

The DOL Wage and Hour Division issued three opinion letters Thursday, all clarifying the agency’s interpretation of whether various forms of boosts to a worker’s salary should be included in the “regular rate” of pay. That refers to the typical hourly rate, which is then multiplied by 1.5 to calculate the overtime premium paid to many workers for hours beyond 40 in...

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