In This Issue…
- Department of Labor proposes calculation of ‘regular’ rate of pay
- OBA Emerging Leaders Mix & Mingles scheduled with OSCPA
- 2019 OBA Convention ready for registrations
- White House to review reg relief proposals
- OBA Professional Member scholarship available
- OBA education corner …
Department of Labor proposes calculation of ‘regular’ rate of pay
Last month, the Department of Labor published a proposed rule that explains how to calculate an employee’s “regular” rate of pay under the Fair Labor Standards Act. Our thanks go out to Jonathan Thessin at the ABA for his insight and guidance on what this proposed rule may mean for employers including member banks.
Why is this important?
Under the FSLA, banks and all other employers must pay their non-exempt employees time and a half for overtime based on the employee’s regular rate of pay for any hours worked in a workweek, unless that employee is classified as exempt from overtime requirements. The regular rate of pay is different from the hourly rate of pay because the regular rate includes all “remuneration” paid to the employee, like bonuses, for example, (unless exempted by the Act). This proposal is intended to clarify what’s included under those exemptions.
The proposed rule attempts to clarify what is and is not an includable “bonus.” In the past, the definition has generally been anything that’s “discretionary” on the part of the employer. The proposal provides some clarifications about bonuses:
- Bonuses to employees who made unique or extraordinary efforts, and not awarded according to pre-established criteria.
- Severance bonuses.
- Bonuses for overcoming challenging or stressful situations.
- Employee-of-the-month bonuses.
- Most attendance bonuses (generally announced to employees to induce productivity).
- Other similar compensation.
The proposal also clarifies that a label assigned to a bonus by management is not conclusive in determining whether that bonus is discretionary.
The FLSA also exempts from an employee’s regular rate of pay “other similar payments to an employee which are not made as compensation for his hours of employment …” Among other purposes, DOL’s proposal would clarify which forms of remuneration fall into this “other similar payments” clause.
By proposing to make these clarifications, DOL intends to encourage employers to provide more of these types of benefits to their employers, without fear that the provision of these benefits would impact the employee’s regular rate. The Department has proposed to clarify the following forms of remuneration are excluded from the regular rate calculation that establishes the employee’s rate of pay:
- Payments for unused “sick” leave (note that payment for an unused holiday or vacation leave is already excluded from the calculation of an employee’s regular rate of pay).
- Contributions by the employer to a plan that provides benefits on account of accident or unemployment, or that provides legal services benefits. (Note that current law already excludes payment of benefits to employees on account of death, disability, advanced age, retirement illness, medical expenses, and hospitalization).
- Cost to employers to provide onsite treatment from specialists, such as chiropractors, massage therapists, personal trainers, counselors, Employment Assistance Programs or physical therapists.
- Cost to employers to provide employees with gym access, gym memberships and fitness classes, whether onsite or offsite.
- Cost to employers to provide wellness programs (i.e., health promotion and disease prevention activities).
- Discounts on retail goods and services as long as the discount is not tied to an employee’s hours worked or services rendered.
- Tuition programs that are available to employees regardless of their hours worked or services rendered.
The proposal also clarifies reimbursable expenses incurred by the employee would be excluded from the regular rate calculation. In addition, the proposal removes the requirement that such expenses must have been incurred by the employee “solely” in the interest of the employer to be excluded.
Other clarifications include: travel expenses are “reasonable” and “not disproportionately large”— and thus excluded from the regular rate calculation when reimbursed to the employee — if the travel expense is within the limits set by the Federal Travel Regulation System for reimbursable travel by federal employees. The proposal also notes that exceeding the Federal Travel Regulation limits is not necessarily unreasonable.
Thanks again to Thessin for his constant help and support on this and many other pending and important regulatory matters!
OBA Emerging Leaders Mix & Mingles scheduled with OSCPA
Grab a seat with us May 23 and enjoy drinks and networking hosted by the OBA Emerging Leaders in partnership with the OSCPA’s Young Accounting Professionals Committee. These Mix & Mingles are 5:30-7 p.m., come and go.
The May Mix & Mingle will provide a unique atmosphere to meet fellow upcoming leaders in Tulsa or Oklahoma City metro.
Main Street Tavern
1325 E 15th St. Tulsa, OK 74120
|Oklahoma City location:
Banquet Cinema Bar
810 NW 4th St. Oklahoma City, OK 73106
2019 OBA Convention ready for registrations
Check out the Adobe Spark-rendered page below to learn more about the upcoming OBA Convention and to get registered!
(No time for fancy webpages and simply want to get to the registration page and brochure? No problem: click here!)
White House to review reg relief proposals
In case you missed it, the Trump Administration, last week, released a memorandum that means another speed bump for proposals that are intended to provide regulatory relief, including banks.
“Proposed rules and regulations now have one more stop along the route to becoming part of the existing regulatory process,” OBA President and CEO Roger Beverage said. “The recent memo from the (Trump) Administration makes it clear that all independent agencies, including the FDIC, OCC and the Federal Reserve, are now required to submit all proposed rules to the White House Office of Information and Regulatory Affairs for further review.
“I’m not sure yet whether this is a good thing or a bad thing. I can see all sorts of problems that requiring one more additional review of proposed (deregulatory) rules will cause, especially for financial institutions. The worst-case scenario is that proposed banking rule changes will be even more difficult to accomplish because the bureaucrats in all government agencies are likely to hunker down and take longer to issue a proposal so it becomes more likely to get a pass from the Administration.
“I don’t mean to be a downer; I’m just exploring the reality of today’s regulatory culture. Even though the federal banking agencies have new, banking-friendly leadership, these agencies are also filled with federal bureaucrats who still work in those agencies and who may, or may not, agree with their new boss. This proposal may be just what they need to slow things down a bit. I’ll keep an eye on it, but it certainly is a significant change to the way things work now.”
OBA Professional Member Scholarship available
Each year, the OBA awards a $1,000 scholarship to an incoming freshman who has a parent, grandparent, sibling or spouse who is a Professional Member of the Association. The student must enroll in an accredited Oklahoma institution of higher education. The applicant must also be graduating from an Oklahoma high school.
A panel of bankers will select the winning applicant. Click here for the 2019 scholarship application. Applications are due May 1.
OBA education corner …
(Sniff … Sniff) Hmmm, smells like spring storm season. Do you have your storm shelter cleaned and out ready? One thing that’s ALWAYS ready is OBA continuing education for bankers – get signed up for an event! And we’ll always keep an eye our for Oklahoma thunderstorms while you’re here!
Take note of the following:
- Risks of Power of Attorney Documents, May 1, Webinar — This presentation will provide financial institution personnel with best practices to use when dealing with these complex legal documents.
- Mortgage Origination Compliance: Part 2, May 1, Webinar — In Part 2 of this 2-part webinar, we’ll discuss all the relevant requirements and considerations in the origination process.
- 2019 Financial Privacy Seminar, May 2, Oklahoma City — If you groan or agonize when you receive a subpoena or other legal process seeking access to customer information or records, this program is for you!
- A-Z on Account Ownership, May 2, Webinar — This program is an A-Z on account ownership and documentation. We will go from single-party accounts to the more complex type of business accounts
- Loan Participations, May 3, Webinar — This presentation will help banks that buy or sell participations among affiliate banks or to unrelated institutions.
- Equipment Lease Financing, May 7, webinar — This webinar focuses on the many aspects of equipment lease financing, from structure and documentation to monitoring and administration. It will also include a review of the OCC Lease Financing Guidelines.
- Lending 101, May 8, webinar — This is a great training tool for newer lenders and processors, and the webinar will help even experienced bankers understand the source of the various requirements.
- Bank Call Report Preparation for Beginners – Five-Part Series, May 9, 16, 23, 30, June 6, webinar — Designed for bankers new to call report preparation, this series will cover basic reporting requirements, operational schedules, loan schedules, maturity and repricing, and Basel III risk-based capital, plus recent accounting changes affecting the Call Report.
- BSA: CIP and CDD, May 9, webinar — This program will evaluate CDD and EDD regulation, exam guidance and provide thoughts on how to proceed with a program that is sales friendly to the account holder.
- Introduction to ACH: the Basics, May 10, webinar — This is an excellent class for new operations staff and others in the bank who just want to understand ACH.
- Advanced Commercial Loan Documentation, May 13, webinar — Includes everything a commercial loan officer should know about the core commercial loan documentation package, including perfecting security interests on commercial collateral, loan agreements, signature requirements, loan closings and more.