An employer must include emergency pay in the regular rate of pay when calculating overtime pay, according to a recent opinion letter from DOL’s Wage and Hour Division.
The letter responds to a firefighter asking whether “emergency pay” – premium pay for working during a disaster or declared emergency – must be included in the regular rate.
The Fair Labor Standards Act requires an employer to include all components of pay in the regular rate unless a statutory exclusion applies. Provided additional statutory criteria are met, the law excludes premium pay for work:
- Of more than either 8 hours in a day or 40 in a workweek;
- On Saturdays, Sundays, holidays, or regular days of rest, or the sixth or seventh day of the workweek; or
- Outside the normal or regular workday or workweek established by contract.
DOL’s opinion letter states that the firefighters’ emergency pay didn’t fit into any of these exclusions. Consequently, the employer must include the premium pay in the regular rate on which it bases overtime.