From OMA Connections Partner Frantz Ward: “Administering payroll for employees with variable work schedules and hourly rates can cause major headaches for employers. In an effort to simplify and reduce administrative costs, employers are oftentimes tempted to set a standard overtime rate to be paid at a set dollar amount to all employees regardless of variations in compensation rates and actual weekly compensation earned. However, as a recent Department of Labor Opinion Letter explains, employers must adhere to the FLSA’s overtime calculation rules when setting such rates….
“This letter reminds employers that, when calculating overtime compensation, the regular rate of pay cannot be arbitrarily selected, especially when the selected amount is potentially less than the employee’s actual hourly wage rate. Rather, overtime must be based on the actual rate of pay the employee earns.”
More here. 1/18/2019