Question: Recently, the Pennsylvania Department of Labor and Industry updated its rules regarding overtime and the regular rate of pay. The new rules require that the regular rate of pay be computed based on 40 hours rather than the total hours worked during the workweek. Does this apply for all employees?

Answer: The new regulations update the definition of the regular rate of pay for nonexempt salaried employees. Hourly employees are not affected by the new regulations, which clarify that the regular rate for nonexempt salaried employees paid on a fluctuating workweek basis is based on a 40-hour workweek.

Under the federal Fair Labor Standards Act the regular rate of pay is an hourly rate computed by dividing the employee’s total pay for a given workweek, excluding statutory exemptions, by the total number of hours worked during that workweek.

Employers do not have to compensate nonexempt employees with an hourly rate. Employers may instead opt to pay on a salary, commission, piece rate, daily, job, or other basis. Regardless, employers must calculate their nonexempt employees’ hourly rates because overtime is based on an hourly rate.

For a salaried employee paid weekly, the regular hourly rate is the weekly salary divided by the number of hours the salary is intended to compensate. For example, an employee paid a weekly salary of $350 for a 35-hour...

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