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Payroll Today

DOL proposes to revamp regular rate calculation

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Alice Gilman

by on
in Payroll Today

Coming fast on the heels of proposed regulations that seek to raise the salary employees must earn to remain exempt under the Fair Labor Standards Act, the Department of Labor has proposed regulations that would tweak the payments that can and can’t be excluded from employees’ regular rate calculations when you’re figuring their overtime rates. These regs won’t become effective until final regs are issued.

The DOL isn’t under any obligation to check with the IRS regarding whether any of these payments are taxable. Maybe it should have, because some payments will create payroll headaches for you.

The following chart lists the items in the DOL’s proposed regulation and how the same item is treated for tax purposes.

 

Item

Regular Rate Calculation

Taxation

Wellness programs

 

 

Health risk assessments

Excluded

Excluded

Biometric screenings

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