Are the new DOL opinion letters like noses?

October 1st, 2018 by Jill Kirila and Shennan Harris at Squire Patton Boggs


This blog was written by Jill Kirila and Shennan Harris at Squire Patton Boggs who are co-authors of our "Wages and Hours - An Employer's Guide". You can find the original blog post and their Employment Law Worldview on their website.

 

Eyes and Ears on the FLSA – U.S. Department of Labor Issues New Opinion Letters and Schedules Public Listening Sessions (US)

By Jill Kirila and Shennan Harris

On August 28, 2018, the Wage and Hour Division of the United States Department of Labor (“WHD”) issued four new opinion letters interpreting various aspects of the federal Fair Labor Standards Act (“FLSA”).  In addition, the WHD has announced plans to analyze and consider changes to the FLSA’s white collar overtime exemption regulations applicable to executive, administrative, professional, and outside sales employees.  To support this effort, the WHD has scheduled five public listening sessions in various locations across the country (a list of which you can find here), which it invites the public to attend and provide comment.   The key questions to be addressed at these sessions surround the pros and cons of adjusting the salary basis – the salary level employees must meet in order to be deemed exempt under the white collar overtime exemptions.   We will be sending representatives and encourage you to contact us with any questions or feedback you would like us to raise at these sessions.

Regarding the opinion letters, as you may recall from our prior blog posts (for example, here and here), the WHD resumed issuing opinion letters in mid-2017.  Opinion letters are official written interpretations of the FLSA, as those laws apply in specific factual situations.  Although the opinion letter topics are generally brought to the WHD by a specific person or entity, as you will see from below, many of the situations they present have broader applicability to a range of employers.  Keeping abreast of the WHD’s opinions can help employers avoid the pitfalls embedded in the nuances of the laws it enforces.  Below is a summary of these new opinion letters, and a link their text:

  • Voluntary employer-sponsored wellness events not compensable time under the FLSA. Employees who voluntarily participate in employer-sponsored wellness activities, such as biometric screening, health and gym classes, or benefits fairs that are designed to lower an individual employee’s health insurance policy premiums and provide other benefits to employees that does not relate to the performance of their job, and from which the employer obtains no financial benefit, predominately benefit the employee, therefore they are not compensable work time under the FLSA.
  • Non-profit professional credentialing organization graders are “volunteers” under the FLSA. A non-profit organization who administers professional exams necessary for professional credentialing selects a group of its credentialed members to serve as exam graders for a period of 1 or 2 weeks, whereby they travel to testing locations to perform these services.  The organization pays the direct expenses related to the graders’ travel.  Graders report they perform the services willingly in the effort to give back to their professional community and to the credentialing organization.  Under the FLSA, individuals who provide services to non-profit organizations may be properly classified as volunteers if they offer their services willingly without any expectation of compensation, free from any coercion or undue pressure.  Under the circumstances presented by the credentialing organization employer, exam graders meet this standard and can be unpaid volunteers.
  • Internet payment software platform sales employees may be exempt from FLSA overtime. Employees may not be entitled to overtime if they 1) work in retail or service establishment, 2) earn a regular rate of pay that is more than 1 Ѕ times the applicable minimum hourly wage in a given workweek in which they work overtime, and 3) derive more than half of their earnings from sales commissions.  This is known as the “retail and service establishment” exemption to the FLSA’s overtime provisions.  The WHD found that an employer whose business is selling internet payment software platforms to retailers and others who sell products online, was considered a “retail sales entity” because it sold its platform directly to the user, in small quantities, for the user’s own use in business, rather than re-sale (such as wholesale sales).  This was not changed by the fact that the employer’s sales are made predominately online.  Accordingly, the organization’s employees who meet the earnings requirements above may be exempt from overtime.
  • Movie theater overtime exemption applies to in-theater-restaurants. The FLSA exempts from overtime all employees of establishments that are primarily engaged in the exhibition of motion pictures (the WHD defines “primarily engaged” to mean at least 50% of the available operation time is spent showing movies).  The exemption applies to all employees of a qualified establishment, regardless of the work they perform.  This recent opinion letter clarifies that movie theaters with in-theater dining, and even some with onsite, full-service restaurants, may qualify for the movie theater exemption if the food service is “functionally integrated” with the theater operations.  Based on the facts presented in the letter, movie theaters with in-theater dining will qualify for this exemption if the food service and theater operations share common:  1) physical premises without a distinct barrier or separation; 2) business, financial, and other record keeping, such as entity name, taxes, and payroll; and 3) employees, and their primary source of revenue is showing movies.
 



Get access to hrsimple for free!

No Credit Card Required

No Obligation

Hundreds of Topics

Downloadable Forms

Employee Handbooks

Immediate Access


Related posts

Employees are volunteers if . . .

DOL Issues Guidance on Compensability of Company-Sponsored Volunteer Work Does the adage “no good deed goes unpunished” apply to employers that fail to pay wages to hourly employees during volunteer events? Not necessarily, according to a recent U.S. Department of Labor (DOL) Opinion Letter. ...

Paying Tipped Employees

U.S. DOL Offers Employers Relief From The ‘80/20’ Tip Credit Rule In good news for employers, particularly those in the restaurant and hospitality industries, the U.S. Department of Labor (DOL) recently reissued a 2009 opinion letter that effectively abandons the “80/20” tip credit rule.  U...

Why You Should Care About Employment Law

Common Pitfalls for Emerging Companies Founders of emerging companies are often first-time employers and find themselves having to wade through the dense patchwork of state and federal labor and employment laws. This can be a confusing undertaking that often requires legal counsel. However, th...

Workplace Christmas Quiz (this is legit and will secondarily eat up some time before you get to go home)

This blog was written by Robin Shea at Constangy, which authors our Model Policies and Forms for Georgia Employers and our New Jersey Human Resources Manual. You can find the original on their Employment & Labor Insider blog (which is one of our favorites and is excellent).   Workplace ...

2019 minimum wage chart

Squire Patton Boggs, the author of our Wages and Hours – An Employer's Guide, put together a minimum wage chart for pretty much everywhere and anywhere. The chart, along with lots of other good stuff, can be found in the book, which in turn can be found in this drop-down menu, which in turn can b...

Holiday stew – ingredients for a happy and non-litigious holiday

Holiday stew – we all have our own recipe, but the base is almost always the same: booze, mistletoe and a generous pinch of unapproved time off. And be sure you don't have enough time to prepare or clean up. Join Gary Wheeler and Lori Mans for an hour as they provide the ingredients and know-h...

Overtime, daylight savings time and circadian rhythyms

This blog was written by Maria Greco Danaher and Hera S. Arsen, Ph.D., at Ogletree Deakins, author of our Model Policies and Forms for Tennessee Employers. Ogletree also authors our Massachusetts Human Resources Manual, Colorado Human Resources Manual, and Employee Benefits – An Employer's Guide....

401(k) plan + payroll provider = 401k good things

This blog is courtesy of Jennifer Ready at HK Finanical Services and the Iowa Association of Business and Industry (ABI) and can be found on the ABI website.   Top Reasons to Integrate Your 401(k) Plan with Your Payroll Provider Jennifer Ready Combining your 401(k) plan administration...

Help hiring holiday help here

This blog was written by John Monroe and Kristina Griffin at FordHarrison, which authors our "Hiring, Firing and Discipline for Employers" and "An Employer's Guide to FMLA and ADA". You can find the original blog post and their Legal Alerts on their website.   Welcome to the Holiday Season!...

I've changed my name – to Optimus Prime

So say an employee, let's call him, for purposes of this exercise, Scott Edward Nall, walks into your office to let you know he has changed his name to Optimus Prime.  Do you: snicker and ask him if his Laser Axe Hand is really made of energy wonder why he isn't riding a dinosaur fall t...

Should you give your employees a little Slack – or do they have enough already?

Are Your Employees “Slackers”? How Employers Should Handle Slack—The Increasingly Popular Instant Messaging Application Launched in 2014, Slack is the fastest growing business application in history. For those unfamiliar with this piece of technology, Slack is a cloud-based “team collaborati...

Bet employers must make: call and raise your minimum wage

July 1 saw a number of states and localities raise the minimum wage, so our author Ogletree Deakins put together a chart for those of you who don't want to pass and go bust.  FYI – poker will be eligible for review for becoming an official Olympic sport.

The six step DOL audit polka

If an employer is being audited by the US Department of Labor (DOL), there are several steps the employer can take to proactively prepare for and ultimately defend its practices:  1. Review immediately and react to the audit request. Carefully review the DOL’s audit request and promptly advise...

Non-exempt employees – what counts as wages?

This blog is an excerpt from our book Wages and Hours – An Employer's Guide by Jill S. Kirila, Meghan E. Hill and Shennan Harris at Squire Patton Boggs. For more information, go to the Products tab above and click on "Federal" to subscribe.   Under the Fair Labor Standards Act (FLSA), “wage...

Punch clock

Dear @Littler: If we replace our punch-card timeclocks with a biometric system, are we obligated to provide a punch-proxy for employees? https://www.lexology.com/library/detail

Year-end or holiday incentives

Year-end or holiday incentives – you need to know the rules: … First rule: make the winner penguin-happy.  

It’s only a matter of overtime

Have your employees been going the extra mile lately? What if they’re clocking in the equivalent of a marathon in hours? If you’re looking over your timesheets and notice that your star employee racked up a whopping 55 hours last week, it’s time to get familiar with the legal requirements of over...