44 | Massachusetts Wage & Hour Peculiarities, 2025 ed. © 2025 Seyfarth Shaw LLP owed an employee will differ under federal and Massachusetts law. Employers should pay the employee the higher of the federal or state overtime rate. 1. Compensation Included in the Calculation of the Regular Rate of Pay Under Federal Law To determine the amount of an employee’s pay for calculating overtime, federal law provides that the regular rate of pay shall include the following types of remuneration: Compensation received by an employee, including hourly pay, piece rate pay, commissions, salary, and other compensation items, such as board, lodging, and use of facilities Shift and weekend differentials On-call pay Longevity pay (i.e., extra pay for seniority) Payments for “sold back” benefits, such as sick leave pay, if the sale is during employment rather than a benefit paid upon termination of employment Travel and employee lunch or meal expenses paid by the employer, unless the expenses are incurred for the employer’s benefit (e.g., meals provided to employees while working late or meal expenses provided to employees while out of town on business) Annual lump sum payments to employees working unfavorable schedules Supplemental disability payments made to partially disabled employees when reassigned to lower wage jobs Certain stock option compensation Safety, incentive, productivity, attendance, and merit bonuses, unless the bonus is completely discretionary Certain premium payments made by employers for work in excess of or outside of specified daily or weekly standard work periods or on certain special days267 267 29 U.S.C. § 207(e); 29 C.F.R. §§ 778.200-778.225.
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