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NAMA Secures Win For OCS And Pantry Services With Department Of Labor

WASHINGTON, DC - The U.S. Department of Labor on Dec. 12 issued its final rule on the "regular rate" calculation that employers must undertake in determining their employees' overtime pay. Thanks to the National Automatic Merchandising Association's proactive proposal, DOL agreed to include employer-provided office coffee and snacks in the list of items employers can deduct from an individual's "regular rate of pay" when determining if they are eligible for time and one half overtime pay. In fact, the N...

December 15, 2019 by Emily Jed

WASHINGTON, DC - The U.S. Department of Labor on Dec. 12 issued its final rule on the "regular rate" calculation that employers must undertake in determining their employees' overtime pay.

Thanks to the National Automatic Merchandising Association's proactive proposal, DOL agreed to include employer-provided office coffee and snacks in the list of items employers can deduct from an individual's "regular rate of pay" when determining if they are eligible for time and one half overtime pay. In fact, the NAMA proposal was included in DOL's announcement of the final rule.

The victory allows operators to market office coffee services and pantry services as a deductible expense for employers; increasing business opportunities and incentivizing employer-provided OCS and pantry service.

The Fair Labor Standards Act (FLSA) requires that non-exempt employees be paid 1.5 times their "regular rate" of pay for overtime work, which could include compensation beyond their hourly wage. DOL rules set out what types of compensation, like health and retirement benefits, are excludable from the regular rate calculation.

In March, DOL proposed changes increasing the salary threshold used to determine whether or not an individual is considered eligible for overtime from the currently enforced level of $455 to $679 per week (equivalent to $35,308 per year).

DOL subsequently proposed changes to its regular rate rule, expanding the list of excludable benefits employers can subtract when determining an individual's regular rate of pay.

NAMA commented on the proposed rule urging that office coffee service and pantry services be added to the final rule.