The Rhode Island Department of Labor and Training (DLT) has issued new rules clarifying employers' obligations to pay premium pay for work on Sundays and holidays. A key part of these rules is defining what qualifies as a “retail business,” which affects how businesses calculate Sunday and holiday premium pay.
Overtime and Premium Pay
Nonexempt employees in Rhode Island must receive overtime pay at time-and-a-half for hours worked over 40 in a week. Additionally, if an employee works on a Sunday or on certain holidays, time-and-a-half also must be paid for the hours worked on that day. The rules differ based on whether the employer is a retailer.
For most employers, overtime and Sunday/holiday premium pay are calculated separately. For example, if an employee works 50 hours in a week for a non-retailer, including eight hours on Sunday, the employer must pay:
- 32 hours at straight-time,
- 8 hours at time-and-a-half for Sunday work, and
- 10 hours at time-and-a-half for hours worked over 40.
Retail businesses can count the Sunday/holiday premium towards their overtime pay obligation. So, for a retailer, the same 50-hour workweek would be compensated as:
- 40 hours at straight-time, and
- 10 hours at time-and-a-half, covering both the Sunday work and the overtime.
Defining “Retail Business”
Under the DLT’s rules, a “retail business” is defined as an establishment engaged primarily in the sale of goods or services directly to the general public. It operates at the end of the...
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