Opinion Letter Issued by the Department of Labor on Calculating Overtime
On September 30, 2025, the Department of Labor's (DOL) Wage and Hour Division issued a new opinion letter clarifying that "emergency pay" premiums provided to firefighters and other non-exempt employees during declared emergencies must be included in the regular rate of pay when calculating overtime premiums under the Fair Labor Standards Act (FLSA). The DOL reviewed a request from a firefighter/paramedic in a Texas municipality, who inquired about the city's emergency pay policy. This policy provides a 50% premium (half the employee's base hourly rate) for every hour worked during declared emergency periods. The firefighter believed that this payment should be included in overtime calculations and sought confirmation from the DOL. The DOL concluded that the emergency pay does not qualify for any statutory exclusion from the regular rate under Section 7(e) of the FLSA. Specifically, the payment fails the three-prong test for discretionary bonuses because, (1)...