Final answer:
The regular rate of pay is determined based on B) base earnings and excludes overtime, bonuses, and stock options. It is used to calculate overtime pay for non-exempt employees.
Step-by-step explanation:
When determining the regular rate of pay, only base earnings are included in the calculation. Overtime, bonuses, and stock options are typically excluded from the regular rate of pay.
The regular rate of pay is used to calculate overtime pay for non-exempt employees. It is the average hourly rate that an employee earns for all hours worked, including any additional compensation.
For example, if an employee's base earnings are $15 per hour and they work 40 hours in a week with no additional compensation, their regular rate of pay would be $15 per hour. If they work any hours beyond 40 in a week, they would be entitled to overtime pay at a rate of 1.5 times their regular rate of pay.