FLSA Overtime Calculator Advisor
Certain payments made by employers to their employees are excluded from the regular rate calculation. These "statutory exclusions" are listed in Section 7(e) of the FLSA and are summarized here. The payment may only be excluded if it meets all of the requirements listed in the regulations describing that type of payment. If you have questions concerning whether particular payments may be excluded from the regular rate calculation, contact your local Wage and Hour Division office.
- Sums paid as gifts, such as payments in the nature of gifts given during holidays or on other special occasions, or as a reward for service. The amounts of the gifts or payments may not be measured by or dependent on hours worked, production or efficiency. (29 CFR 778.212)
- Payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause.
- Reasonable payments for traveling expenses, or other expenses an employee incurs while furthering the employer’s interests and that are properly reimbursable by the employer (such as laundering uniforms or buying supplies or materials on behalf of the employer); and other similar payments to an employee which are not made as compensation for the employee’s hours of employment.
- Sums paid in recognition of services performed during a
given period if one of the following three conditions is met:
- both the fact that payment is to be made and the amount of the payment are at the sole discretion of the employer at or near the end of the period and not according to any prior contract, agreement, or promise causing an employee to expect such payments regularly; or
- the payments are made pursuant to a bona fide profit-sharing plan or trust or bona fide thrift savings plan, which meet additional requirements set forth in the regulations; or
- the payments are talent fees (as defined in the regulations) paid to performers, including announcers on radio and television programs.
- Contributions irrevocably made by an employer to a trustee or third person according to a bona fide plan for providing old-age, retirement, life, accident, or health insurance or similar benefits to employees. (29 CFR 778.214, 29 CFR 778.215)
- Extra compensation paid at a “premium rate” for certain hours worked by an employee because such hours are hours worked in excess of eight in a day, or in excess of 40 hours in the week, or in excess of the employee’s normal working hours or regular working hours, as the case may be. Such extra compensation may be creditable toward overtime compensation. (29 CFR 778.202)
- Extra compensation provided by a “premium rate” for work by the employee on Saturdays, Sundays, holidays, or regular days of rest, or on the sixth or seventh day of the workweek. The premium rate may not be less than one and one-half times the rate established in good faith for work performed in nonovertime hours on other days. Such extra compensation may be creditable toward overtime compensation. (29 CFR 778.203, 29 CFR 778.205)
- Extra compensation provided by a “premium rate” under an applicable employment contract or collective bargaining agreement for work outside of the hours established in good faith by the contract or agreement as the basic, normal, or regular workday (not exceeding eight hours) or workweek (not exceeding 40 hours). The premium rate may not be less than one and one-half times the rate established in good faith by the contract or agreement for like work performed during the workday or workweek. Such extra compensation may be creditable toward overtime compensation. (29 CFR 778.204, 29 CFR 778.206)
- Any value or income derived from employer-provided grants or rights provided through a stock option, stock appreciation right, or bona fide employee stock purchase program meeting certain criteria. See: Fact Sheet # 56: Stock Options under the Fair Labor Standards Act (FLSA).