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Rhode Island Updates Regulations on Sunday and Holiday Premium Pay

By Eric Mack and Stephen Melnick

August 8, 2025
4 minute read

The Rhode Island Department of Labor and Training (DLT) has published new rules clarifying the obligation of employers to pay premium pay to employees who work on Sundays and holidays. A new regulation defines for the first time what qualifies as a “retail business” – a key factor in determining how businesses must calculate Sunday and holiday premium pay under Rhode Island law.

Rhode Island Overtime and Premium Pay

Rhode Island requires overtime pay, at time-and-a-half, for nonexempt employees who work more than 40 hours in a week. Rhode Island also requires time-and-a-half to be paid for work on Sundays and certain holidays. Two different laws impose this obligation, but they differ significantly depending upon whether the employer is considered a retailer.

Most Rhode Island employers must pay overtime and Sunday/holiday premium pay separately. For instance, if an employee works 50 hours in a week for a non-retailer, including eight hours on Sunday, the employee must be paid 32 hours at straight-time; eight hours at time-and-a-half for Sunday; and another 10 hours at time-and-a-half for the hours worked over 40 (a process sometimes called stacking or pyramiding of overtime). A “retail business” employer, however, gets to count the Sunday/holiday premium towards overtime pay. So, for a retailer in the example above, 40 hours at straight-time and 10 hours at time-and-a-half would cover both the Sunday work and the overtime.¹ There is an obvious advantage, therefore, for a business to be classified as a retailer.

“Retail Business” Definition

Despite its pivotal importance, Rhode Island law did not previously provide a definition of “retail business.” This left some employers wondering which of the two statutes applied. The new regulations provide some clarity by defining “retail business” as “an establishment engaged primarily in the sale of goods or services directly to the general public. It operates at the end of the distribution chain, selling in small quantities to the ultimate consumer in a manner consistent with other consumer goods and services.”

Excluded from the definition of “retail business” is any business that engages “primarily in resale, wholesale transactions, or manufacturing;” “businesses that primarily prepare and sell food for immediate consumption,” and “wholesale operations that serve other businesses rather than individual consumers.”

No New Sunday/Holiday Premium Exemptions

Prior to 2021, Rhode Island law permitted the DLT to issue exemptions from the Sunday/holiday premium pay requirements, upon request by a “class of employers.” However, the Rhode Island legislature eliminated the DLT’s authority to provide new exemptions in 2021. Consequently, the DLT’s new regulations delete the former procedures for requesting Sunday/holiday exemptions. Nine employer groups² had exemptions approved when the procedure was available, and these exemptions remain in effect.

Impact on Employers

The new regulations go into effect on August 17, 2025. Rhode Island employers should determine whether they meet the new definition of “retail business” under the regulations and calculate Sunday and holiday premiums accordingly.

¹ For intrepid pursuers of historical detail, here is the background. In the late 1970s, the DLT found that a local convenience store chain had under-compensated its employees for Sunday and holiday work, which was also in excess of 40 hours in a workweek, by paying them only 1.5 times their regular rate. The DLT took the position that the employer had an obligation to pay the employees a .5 premium for hours worked in excess of 40 under 28-12-4.1 (the general statute governing the payment of overtime) and a .5 premium for hours worked on Sundays and holidays pursuant to 5-23-2(h) (because the employer was a retail establishment). The employer challenged, arguing that it should be allowed to take a credit against weekly overtime due for Sunday and holiday premiums paid as is allowed by federal law. The Rhode Island Supreme Court rejected this argument finding that the legislature intended for employees to receive the double overtime premium for hours worked on Sundays and holidays in excess of 40 in a workweek. Narragansett Food Services, Inc. v. R.I. Dep't. of Labor, 420 A.2d 805 (R.I. 1980). In response, the legislature amended 28-12-4.1 in 1987 to provide, “In any workweek in which an employee of a retail business is employed on a Sunday and/or a holiday at a rate of one and one-half times the regular rate at which he or she is employed as provided in sec. 5-23-2, the hours worked on the Sunday and/or holiday shall be excluded from the calculation of overtime pay as required by this section.” R.I. Gen. Laws. sec. 28-12-4.1(b). This amendment removed the pyramiding requirement for retail employers. Because the legislature did not specifically mention 25-3-3 when carving out the retail exception, the DLT takes the position that pyramiding is still required for non-retail employers.

² The exempted groups are: manufacturers of monoclonal antibodies using mammalian cells; some employees of fueling operators at Rhode Island Airport Corporation airports; employers of Federally Certified Maintenance Technicians at TF Green Airport; motorist service facilities located or near major interstate highways; churches and houses of worship, for work related to worship services; non-profit higher educational institutions and certain other educational institutions; private security guard businesses; and telephonic call centers or internet-based dispatch systems.