Employers should embody COVID-19 incentive funds, corresponding to hazard pay, in an worker’s common charge for calculating additional time funds, the U.S. Division of Labor (DOL) said in current steerage.
What New Steering Says
Employers might compensate nonexempt staff in a wide range of methods. To calculate the quantity of additional time pay, you need to first decide the worker’s common charge of pay. Typically, you discover it by dividing whole compensation for employment, much less any statutory exclusions, by the overall variety of hours labored. The Truthful Labor Requirements Act (FLSA) gives an exhaustive listing of funds chances are you’ll exclude from the common charge when calculating additional time funds.
The DOL’s recent guidance clarified that employer-paid incentive funds—together with hazard pay for work carried out through the COVID-19 emergency—don’t meet any statutorily licensed exclusion and thus have to be included within the common charge used to compute staff’ additional time pay. The requirement applies to each personal and state or native authorities employers which have opted to supply incentive funds to staff for working through the disaster. The steerage particularly delineates between:
- Employer-provided incentive pay, which you need to embody within the common charge used to calculate staff’ additional time pay; and
- Incentive funds offered to staff by a state or native authorities, which you’ll exclude from the common charge.
Employers additionally might exclude any oblique state or native authorities incentive funds that use employers as an middleman to facilitate the transactions, except you could have agreed to deal with the government-provided funds as compensation for employment. Upon any specific or implicit settlement between an employer and its staff to deal with government-provided incentive funds for work carried out throughout COVID-19 as compensation for his or her efforts, the employer should embody the quantities in calculating the common charge.
When you’ve opted to supply incentive funds, together with hazard pay, to staff for work through the coronavirus emergency, be sure you embody the quantities within the common charge when calculating any additional time compensation owed to them. When you’ve got questions in regards to the calculations, contact skilled counsel.