Wage & Hour Counsel : Wage & Hour Lawyer & Attorney : Littler Mendelson Law Firm : Employment Law, Labor Relations

On June 16, 2010, Nancy J. Leppink, Deputy Administrator of the U.S. Department of Labor, Wage and Hour Division, issued the second in her inaugural series of Administrator's Interpretations. Unfortunately, this newest interpretation (pdf), like the first, seems to reflect a continued effort by the Wage and Hour Division to reject certain key interpretations of the Fair Labor Standards Act (FLSA) issued during the Bush Administration.

In the latest interpretation, the Administrator examines whether protective equipment worn by union employees can be considered "clothes" for purposes of section 203(o) of the FLSA and whether clothes changing covered by section 3(o) constitutes a principal work activity. Section 203(o) provides that time spent “changing clothes or washing at the beginning or end of each workday” is excluded from compensable time under the FLSA if the time is excluded from compensable time pursuant to “the express terms or by custom or practice” under a collective bargaining agreement. 29 U.S.C. § 203(o).

This is not the first time the Administrator has examined this issue. In fact, since 1997 the Administrator has issued a series of conflicting opinion letters. In 1997, 1998 and 2001 opinion letters the DOL concluded protective equipment was not "clothes." In contrast, in 2002 and again in 2007, the Administrator found that "clothes" included protective equipment. The newest letter reaffirms the narrow interpretation of "clothes" found in the 1997, 1998 and 2001 opinion letters and rejects the interpretation contained in the 2002 and 2007 letters that protective equipment constitutes clothes for purposes of Section 203(o).

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In a development that may have significant implications for mortgage lenders and other financial services employers, the Department of Labor has issued a new Administrator's Interpretation finding that mortgage loan officers do not qualify as exempt administrative employees under the FLSA, reversing its prior position and withdrawing previous opinion letters concluding to the contrary. To continue reading about this development, see Littler's ASAP Department of Labor Reverses Course: Mortgage Loan Officers Do Not Meet the Administrative Exemption's Requirements by Robert W. Pritchard, R. Brian Dixon and Andrew J. Voss.

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In its first Administrator Interpretation Letter, the Wage and Hour Division of the U.S. Department of Labor (DOL) announced today that mortgage loan officers do not qualify as bona fide administrative employees under section 13(a)(1) of the Fair Labor Standards Act (FLSA). In reversing its prior stance on the issue, the DOL withdrew two opinion letters issued on September 8, 2006 and February 16, 2001, in which it previously had found that loan officers were exempt administrative employees.

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In three opinion letters issued during the final weeks of the Bush administration, the Wage and Hour Division of the U.S. Department of Labor (DOL) provided further guidance as to what does and does not constitute compensable training time under 29 C.F.R. § 785.27.

Pursuant to section 785.27, participation in training programs need not be counted as working time if four criteria are met: (a) attendance is outside of the employee’s regular working hours; (b) attendance is in fact voluntary; (c) the course, lecture, or meeting is not directly related to the employee’s job; and (d) the employee does not perform any productive work during such attendance. 29 C.F.R. §785.27.

In FLSA 2009-13 and FLSA 2009-15, the DOL confirmed that required study for required training classes – even when the studying occurs outside of the normal work day – is nonetheless compensable time. In 2009-13, employees were required to take four 10-hour web-based prerequisite classes for a job-related training course that would be completed during normal work time. While participation in the job-related training course was entirely voluntary, completion of the course would result in the employees being able to better and more efficiently perform the functions of their jobs. Accordingly, because their web-based requisite classes were a mandatory part of the job-related training course, the DOL concluded that time spent completing those web-based prerequisite classes was directly related to the employee’s job and, therefore, failed the third criterion of section 785.27.

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The Department of Labor (DOL) announced on Friday, March 6, 2009, that they were simultaneously publishing and withdrawing 18 wage and hour opinion letters issued during the waning days of the last administration.

Former Acting Wage and Hour Administrator Alexander J. Passantino signed the letters between January 14 and 16, but according to the DOL they do not appear to have been mailed before President Obama’s inauguration. “In any event,” the DOL stated, “we have decided to withdraw [these opinions] for further consideration by the Wage and Hour Division.”

The Department can always reconsider and withdraw a previously-issued opinion letter, but this kind of mass withdrawal appears to be unprecedented. The DOL has not withdrawn 18 other opinion letters issued around the same time, but that apparently were mailed. The Administrator issued a total of 36 opinion letters during the Bush Administration’s final two weeks in office, half of which have now been withdrawn. By contrast, only 19 opinions were issued during all of 2008.

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In three new opinion letters, FLSA2009-2, FLSA 2009-14 and FLSA 2009-18, the DOL answers questions about the potential effect of temporary plant shut downs and reduced workweeks on the exempt status of executive, administrative and professional employees under section 13(a)(1) of the Fair Labor Standard Act (FLSA). All three letters address application of the salaried basis test set forth in 29 CFR § 541.602(a).

FLSA2009-2 affirms that an employer may require exempt employees to use accrued vacation time during a plant shutdown of less than a workweek without destroying exempt status. The FLSA does not require employers to provide paid vacation time. If employers choose to do so, they are free to require employees to use the time for any absence— including a plant shutdown of any duration—without harming exempt status. Aside from a few exceptional situations not relevant to this letter, in order to be paid on a “salaried basis” and maintain an exemption, the employee must “receive a payment in an amount equal to [his] guaranteed salary” for any workweek during which he performs any work. It does not matter if the amount is part regular salary and part vacation pay.

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In the last days of the Bush administration, the Department of Labor (DOL) issued an opinion letter, recognizing that insurance agents might qualify for the FLSA’s outside sales exemption and/or the administrative exemption. In its letter, which came in response to a request from a trade association representing life insurance companies, the DOL cautioned that such a determination would depend on the specific facts of the particular case. FLSA2009-28.

With respect to the outside sales exemption, the DOL noted that insurance agents who are responsible for making sales and obtaining orders for life insurance and other financial products could qualify for the exemption. In general, to qualify for the outside sales exemption, the agent must “normally and recurrently” – meaning every workweek – meet with clients face-to-face and engage in sales or solicitations away from their employer’s place of business. The performance of some activities at the employer’s workplace, such as sending e-mails, making telephone calls and preparing for meetings, will not jeopardize the exemption, provided this work is merely incidental to and in conjunction with the qualifying outside sales activity.

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The Wage & Hour Division of the U.S. Department of Labor recently issued an opinion letter that could produce substantial savings for employers who have misclassified employees as exempt from the overtime provisions of the FLSA and who need to retroactively compensate those employees for unpaid overtime.

An employer may pay its employees a fixed salary. But, when a non-exempt employee works more than forty hours in any workweek, the Fair Labor Standards Act (FLSA) requires his or her employer to pay overtime at one and one-half times the regular rate of pay. 29 U.S.C. section 207(a)(1).

If an employer and a non-exempt salaried employee have a “clear mutual understanding” that the employee’s salary is compensation for all hours worked each week (whether many hours or few), then the FLSA permits the employer to use the “fluctuating workweek” method to calculate overtime. Applying this method, the employee’s salary is deemed to constitute straight-time pay for each hour of work (including overtime hours), and the employer must pay the employee only the additional “half time” premium for each overtime hour. 29 C.F.R. § 778.114.

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In an opinion letter dated December 19, 2008 (FLSA2008-18), the DOL found that itamae-sushi chefs and teppanyaki chefs were tipped employees under the FLSA, eligible to participate in employer-mandated tip pools.

Section 3(t) of the FLSA defines tipped employees as “any employee engaged in an occupation in which he/she customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. § 203(t). Section 3(m) allows tip-pooling among employees who customarily and regularly receives tips. 29 U.S.C. § 203(m); see also 29 C.F.R. § 531.54.

Itamae-sushi chefs and teppanyaki chefs have direct contact with customers, at the bar counter area (itamae-sushi chefs) and at customer tables (teppanyaki chefs). In support of its opinion, the DOL cited its “longstanding position that counter persons who serve customers may participate in tip pools. Citing FLSA Field Operations Handbook § 30d04(a); Wage and Hour Opinion Letter 1/25/83 (waiter chef who brings food order from kitchen to table and cooks it on hibachi grill in front of customers may share in tip pooling).
 

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The Wage and Hour Division of the Department of Labor (DOL) recently released to the public three December 2008 opinion letters that addressed inquiries regarding FLSA exemption issues.

The first letter (FLSA2008-11) concluded that Assistant Athletic Instructors at an institution of higher education are exempt from the minimum wage and overtime requirements of the Act as bona fide professionals, since their primary responsibility (occupying more than 50% of their time) is teaching student-athletes.

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In a December 18, 2008 opinion letter, the United States Department of Labor (DOL) determined that an employee’s on-call time did not count as hours worked under the Fair Labor Standards Act (FLSA). The opinion letter offers a helpful reminder of how on-call time works under the FLSA. 

Whether on-call time counts as paid time depends on the facts of the situation, but comes down to how much freedom an employee has while on call. If an employer imposes very few restrictions on an employee while on call, the time does not count as hours worked. But, if an employer imposes many restrictions, the time may count as paid time. Some relevant factors include geographic restrictions, how much time an employee has to report when called, how many calls an employee actually receives, the ability to trade on-call duties and whether on-call duties are part of an agreement with the employer.

The employee who wrote to the DOL said he had to be reachable at all times, could not drink alcohol while on call and had one hour to report after receiving a call. He did not receive call-backs often, but his employer limited how much overtime he worked when on call and disciplined employees who did not follow the on-call restrictions. Based on those facts, the DOL determined the restrictions were not enough to turn the on-call time into paid hours worked.

This blog entry was authored by Lara Strauss

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The Wage and Hour Division of the Department of Labor (DOL) recently released four new opinion letters concerning volunteering and the Fair Labor Standards Act.   

Different Public Agency

The Department opined that county-employed emergency medical technicians are able to volunteer to provide emergency medical services for a local volunteer emergency crew (the “Crew”) without violating the FLSA. Advice was sought about whether the county and the Crew would be considered the same public agency under the FLSA. Relying on factors considered by the Fourth Circuit in Benshoff v. City of Virginia Beach, 180 F.3d 136 (4th Cir. 1999), the DOL found the county and the Crew did not constitute the same public agency. Facts relevant to this determination included the following: (1) Crew members voted to elect officers; (2) the Crew had a board of trustees made of public citizens and maintained its own set of by-laws and policies; (3) the county did not control the Crew’s personnel decisions; and (4) the county only paid for 20 percent of the Crew’s operating expenses.  FLSA2008-13 (December 18, 1008)

Same Services

In a separate opinion letter, the DOL advised that a firefighter who is employed by a private, volunteer fire department may not provide firefighting services for his or her employer in exchange for compensation on some shifts and on an unpaid basis during other shifts.  FLSA2008-14 (December 18, 2008)

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