The Rhode Island Department of Labor and Training (DLT) has published new rules clarifying the obligation of employers to pay premium pay to employees who work on Sundays and holidays. A new regulation defines for the first time what qualifies as a “retail business” – a key factor in determining how businesses must calculate Sunday and holiday premium pay under Rhode Island law.
Rhode Island Overtime and Premium Pay
Rhode Island requires overtime pay, at time-and-a-half, for nonexempt employees who work more than 40 hours in a week. Rhode Island also requires time-and-a-half to be paid for work on Sundays and certain holidays. Two different laws impose this obligation, but they differ significantly depending upon whether the employer is considered a retailer.
Most Rhode Island employers must pay overtime and Sunday/holiday premium pay separately. For instance, if an employee works 50 hours in a week for a non-retailer, including eight hours on Sunday, the employee must be paid 32 hours at straight-time; eight hours at time-and-a-half for Sunday; and another 10 hours at time-and-a-half for the hours worked over 40 (a process sometimes called stacking or pyramiding of overtime). A “retail business” employer, however, gets to count the Sunday/holiday premium towards overtime pay. So, for a retailer in the example above, 40 hours at straight-time and 10 hours at time-and-a-half would cover both the Sunday work and the overtime.1 There is an obvious advantage, therefore, for a...
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