More Than Time and a Half

Overtime can be more than time and a half.

When calculating overtime wages, an employer must start with the employee’s “regular rate” of pay. This may be more than the hourly wage.

As of January 15, 2020, the Department of Labor has clarified how to calculate an employee’s regular rate. Regular rate is defined as “all remuneration for employment paid to, or on behalf of, the employee.” This includes more than just the employee’s hourly rate. For example, on-call pay, shift rate differentials, non-discretionary bonuses, and many other payments are included in the regular rate of pay.

Certain payments may be excluded from an employee’s regular rate. Those exclusions include the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services. Pay for time that does not constitute “hours worked” such as meal periods may be excluded.

An employee whose regular rate was miscalculated may be entitled to twice the amount of the overtime pay due as well has payment of legal fees.

Under Minnesota law, employers may also be subject to a penalty of approximately one day’s wages for each day earned wages are not paid after a demand.