Why am I Not Surprised: Emergency Pay Is Included in the Regular Rate of Pay and Boosts Up Any Overtime Premium Pay Due Workers

“La plus ça change, plus c'est la même chose.”

--Jean-Baptiste Alphonse Karr

On September 30, 2025, Acting Wage and Hour Administrator James R. Macy of the US Department of Labor (“DOL”) issued a new opinion letter (FLSA-2025-04) on the subject of emergency pay and its effect on overtime compensation. https://www.dol.gov/sites/dolgov/files/WHD/opinion-letters/FLSA/FLSA-2025-04.pdf.

 A Texas firefighter/paramedic inquired about a city government policy of paying an extra premium one-half of the employee’s regular hourly rate for time worked  during an  “emergency period,” such as a disaster or emergency declaration like in the event of extreme weather.

DOL reviewed the statutory, case law and regulatory guidance on the calculation of the regular rate of pay. They found that the emergency pay was not a discretionary bonus and did not fall within any of the other statutory exceptions allowing exclusion from the regular rate calculation. DOL then opined that:

It is our opinion that, under the circumstances presented and limited to the specific facts set forth in the request, the “emergency pay” is not excludable from the regular rate of pay because the fact and amount of the payment are not within the sole discretion of the employer at or near the end of the work period, and the pay does not otherwise fit within a statutory exclusion. Accordingly, the employer at issue should include “emergency pay” earned for hours worked within the regular rate for purposes of overtime premium calculations using the method described below.

The regular rate of pay is calculated by adding up all the pay the worker receives during the workweek, including the half-time emergency pay premium, then dividing by all the hours worked that work week. That formula creates a boosted (i.e., higher) regular rate for the overtime for hours worked in excess of the maximum work week standard (usually 40 hours but sometimes higher for police and firefighters on a special work schedule under section 7(k) of the Fair Labor Standards Act (“FLSA”)).

It isn’t a surprising result. The opinion maintains continuity with a long line of DOL authority on the calculation of the regular rate. Any payment not expressly excluded from the regular rate formula is ordinarily included in the calculation. Even in the days of Trump, somethings remain an eternal verity.