Summary: The federal government responded to a request from an oil and gas company. A new opinion letter clarifies how expense reimbursements impact regular pay rates when calculating overtime. Contact an unpaid wages attorney if you are experiencing overtime wage violations.
A recent opinion letter from the federal government clarifies how expense reimbursements will impact your regular pay rate when calculating overtime pay. The letter was in response to a request from an oil and gas services company seeking guidance on payment procedures for employees who inspect pipelines and perform related services.
The Fair Labor Standards Act (FLSA) requires that your regular pay rate includes all your compensation, with limited statutory exclusions. The opinion letter clarifies exclusions from traditional calculations for overtime pay and how daily expense reimbursement payments impact your regular rate. A knowledgeable unpaid overtime attorney can help you with this.
Understanding the Origins of the Opinion Letter
The recently issued opinion letter originated in response to an oil and gas company requesting the exclusion of daily expense reimbursement payments from its employees’ regular pay rate. The company wanted to increase expense reimbursements from $25 to $150–$200 without factoring these payments into each employee’s regular pay rate.
The new opinion letter clarifies how to calculate overtime pay when including daily expense reimbursements. It also provides guidance on determining whether expense payments are compensation for work or legitimate reimbursements. One of our experienced lawyers can help you understand how it all works.
How Expense Reimbursements Impact Regular Pay Rates
The primary purpose of expense reimbursement is to offset actual costs you incur while working, not to provide additional compensation that can be excluded from overtime pay calculations. According to the new opinion letter, only legitimate expenses you incur while working can be excluded from the regular rate calculation when calculating overtime.
The opinion letter further clarifies that employers can only exclude expense reimbursements from your regular pay rate when they reasonably approximate the actual expenses you incur. In other words, employers cannot use inflated reimbursement amounts to artificially lower your regular pay rate and reduce overtime pay obligations under the FLSA.
Employers must document the amount and nature of each expense reimbursement excluded from the regular rate. If the reimbursement amount is disproportionately large compared to the actual expense, you must include the excess in the regular overtime rate calculation.
Contact a Unpaid Overtime Attorney for Legal Assistance
A lawyer can help you recover unpaid overtime wages if you believe your employer is not paying you correctly. The law requires payment for the hours you work, including minimum wage and overtime.
There are several actions an attorney can help you take if your employer is not compensating you fully. A successful claim can lead to payment of back wages, liquidated (double) damages, attorneys’ fees, and other compensation. Use the chat or submit our online form to request your free and confidential review.
