​DOL Says Some Perks and Benefits Are Not Pay

Employers will find it easier to offer their workers various benefits and perks under federal wages laws because of a new rule issued by the U.S. Department of Labor (DOL).

Under the final rule, employers using an authorized basic rate may exclude from the overtime computation any additional payment that would not increase total overtime compensation by more than 40% of the higher of the applicable local, state or federal minimum wage a week on average for the overtime workweeks in which the employer makes the payment.

“The final rule provides examples of the types of bonuses that can be excluded as discretionary, but this determination remains very fact-specific and the standard for excluding a bonus from the regular rate remains high, note attorneys Leslie Selig Byrd and Amber K. Dodds of the Bracewell LLP law firm.

“Also, the rule provides that ‘certain’ sign-on and longevity retention bonuses may be excluded; again, employers should be thoughtful when determining whether the bonuses they provide in these circumstances may properly be excluded from the regular rate,” they add.

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