Under the Fair Labor Standards Act of 1938 (FLSA), employers are required to compensate employees for their time worked based on all compensation received. Premiums for overtime are to be paid as a factor of the employee’s “regular rate.” Although the terms are often used interchangeably, the employee’s regular rate does not refer to the employee’s base hourly rate. This article examines errors frequently made by employers and litigators in calculating an employee’s regular rate.
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