The following article first appeared in the Insights section of Littler Mendelson’s website. It is reposted here with permission.

On Sept. 30, 2025, the U.S. Department of Labor issued an opinion letter containing important reminders about how to calculate overtime pay for non-exempt employees who earn amounts in addition to their base hourly wage.

The opinion letter involved firefighters and paramedics who receive premium pay equal to one-half times their normal hourly rate for work performed during a disaster or emergency declaration.

The Fair Labor Standards Act provides that non-exempt employees must be paid not less than one and one-half times their regular rate for hours worked above 40 in a workweek.

An employee’s regular rate is not limited to their base hourly wage. Instead, it includes all remuneration paid to the employee, subject to only eight statutory exclusions.

The question presented was whether the “emergency pay” premiums qualified for any of those exclusions.

DOL answered in the negative. Among other considerations, DOL opined that the premiums did not qualify for the exclusions applicable to:

1. Discretionary bonuses, because they were paid pursuant to a policy that leaves no discretion as to whether they are owed and, if so, in what amount; or
2. Premiums paid for hours worked in excess of eight in a day or 40 in a week, for work on Saturdays, Sundays, or holidays, or for work outside the employee’s normal workday, because they were earned based on the...

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