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Opinion Letter Distinguishes between Standard Rate of Pay and Regular Rate of Pay

The Fair Labor Standards Act (FLSA) is a complex, federal regulation setting forth many of the nation’s wage and hour laws. It’s scope is vast, but two specific provisions affect the majority of workers in the United States: 1) Workers are entitled to earn at least minimum wage; and 2) Most non-exempt workers are entitled to earn over-time compensation at a rate of one and one-half times their regular rate of pay for all time worked in excess of 40 hours in any one work week.

These seemingly straight-forward rules raise numerous questions. As such, the Department of Labor (DOL) periodically issues “Opinion Letters” designed to provide guidance concerning the proper interpretation of the FLSA. Recently, the DOL provided an Opinion Letter concerning how to interpret the “regular rate of pay” for calculating overtime compensation. The DOL explained that the computation of “regular rate of pay” must be based on actual fact, and “Neither an employer nor an employee may arbitrarily choose the regular rate of pay; it is an ‘actual fact’ based on ‘mathematical computation’.

Thus, employers may violate the FLSA if they designate a standard overtime rate that is lower than the actual regular rate for time worked during the pay period in question.

Because this calculation may lead to confusion and potential pay violations, concerned employees should consult with a dedicated Atlanta wage and hour attorney. An experienced Georgia FLSA attorney can review your specific matter and ensure you are receiving all of the compensation you are rightfully entitled to.

For more information or if you have any wage or hour questions, please consult our team of Atlanta FLSA attorneys at Buckley Beal for an immediate consultation.

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