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New DOL Opinion Letters

Published by on August 5, 2008

The Department of Labor’s Wage and Hour Division recently posted two new Administrator signed FLSA Opinion Letters and five new Non-Administrator signed FLSA Opinion Letters.  The letters are described below. In the first Administrator signed Opinion Letter the question presented was whether a pay schedule for a school district is in compliance with the minimum wage […]

The Department of Labor’s Wage and Hour Division recently posted two new Administrator signed FLSA Opinion Letters and five new Non-Administrator signed FLSA Opinion Letters.  The letters are described below.

In the first Administrator signed Opinion Letter the question presented was whether a pay schedule for a school district is in compliance with the minimum wage and overtime provision of the FLSA.  The opinion letter can be found here

Pursuant to a negotiated agreement the school district’s exempt employees are paid bi‑weekly using a 26-pay-period cycle (52 weeks per year divided by 2).  For administrative convenience non-exempt employees are paid based on that cycle as well.  Every four years the district adjusts its pay date by one week to ensure only 26 pay periods each fiscal year.  This adjustment results in one pay period containing three work weeks, instead of the typical two.  Employees complained that they are paid “less” during this particular pay period.  The district maintains that this practice does not violate the FLSA because employees still receive pay in excess of the minimum wage, their contractual hourly wages for all hours worked, and overtime pay.

This practice does not violate the FLSA because when their two week pay was divided by 120 hours (instead of the typical 80 hours for 2 weeks) they were still being paid more than the minimum wage.  The pay schedule also complies with the FLSA overtime provisions because employees receive at least time and one half of their regular rate for hours worked over 40 in a workweek.

The second Administrator signed Opinion Letter addresses the application of section 3(m) of the FLSA.  The letter can be found here.  The questions presented were (1) whether the requirement that employees wear a certain type of footwear makes such footwear a “uniform” under the FLSA, and (2) whether the employer may arrange for a third-party vendor to offer employees the opportunity to voluntarily purchase footwear that meets the employer’s specifications.  The letter concludes that the required footwear does not constitute a “uniform” under the FLSA and the employees’ voluntary assignment of wages to the employer for the purchase from the third party vendor is not an impermissible deduction from wages. 

The Employer also asked whether the Employer may offer to advance the money necessary for employees to voluntarily purchase shoes from the shoe manufacturer and recoup the advance through payroll deductions where those deductions may cause the employee’s paycheck to fall below the minimum wage for each hour worked in the pay period.  The answer turns on whether the deduction from wages for the cost of the shoes comports with section 3(m) of the FLSA and its implementing regulations.  Section 3(m) includes as part of “wages” the “reasonable cost” to the employer for furnishing any employee with board, lodging or “other facilities.”  The opinion stated that “the purchase of the shoes from the third party vendor can be considered to be the furnishing of ‘other facilities’ by the Employer and a deduction for the actual cost of the shoes is allowed under section 3(m), even if it reduces the amount of the employee’s cash wages below the minimum wage, so long as the employer does not profit or include any administrative costs.”

            The applicable facts are as follows:

            “The Employer operates restaurants and requires employees to wear “dark-colored” shoes without prescribing any particular quality, brand, style, model, or type.  Aside from color, the only other requirements are that they not be open-toed and that, for safety reasons, they not have a slippery sole….

            The Employer has arranged a program through which employees may, solely at their option, purchase shoes from a shoe manufacturer… [T]he employer may either pay the vendor directly or the Employer will pay the vendor and deduct the amount of the payment from the employee’s paycheck over a number of weeks.  In some instances, the deductions may cause the remaining amount of the employee’s paycheck to fall below the minimum wage for each hour worked during that pay period.  If the employee requests that the Employer pay for the shoes through a deduction, the employee must do so by submitting a request in writing describing the shoes to be purchased, requesting the Employer pay for the shoes, and authorizing the Employer to withhold future wages in an amount sufficient to reimburse the purchase cost.  Neither the Employer, nor any person acting in its interests, realizes any profit or other benefit from the purchase program, either from employees or the shoe manufacturer.  The reimbursement is merely to cover the cost of the shoes.”

The first Non-Administrator signed Opinion Letter discusses whether service coordinators qualify for the learned professional exemption under section 13(a) (1) of the FLSA.  The opinion letter can be found here.  The letter concludes that the position is not exempt.  Because the academic requirements for service coordinators may be met with an associate’s degree, the position lacks the requirement of “knowledge of an advanced type… customarily acquitted by a prolonged course of specialized intellectual instruction.”

The opinion letter recounts the applicable facts as follows:

“Service coordinators assist program participants (participants) with gaining access to medical, social, educational, and other community services. They interview, assess, and identify participant’s strengths, needs, and desired outcomes before developing individual service plans that identify proper services needed and authorized. Service coordinators provide planning, coordination, linkage/referral, and follow-up/monitoring to facilitate participant’s independence in the community. They also provide 24-hour case management services, and advocate for program participants by intervening if their rights are denied. They document all contact with participants in case notes and reports, and assess the participant’s health and safety every month.

Your service coordinators must have an associate’s degree in a health or human services field, or be a registered nurse, and have one year of relevant experience. However, the ideal candidate has a bachelors degree and several years of experience. Service coordinators must complete the Medicaid Service Coordination Core Training within three months of employment, as well as annual training to enhance their skills.”

The second Non-Administrator signed Opinion Letter discusses whether “jailers” employed by a city qualify for the partial overtime exemption under section 7(k) of the FLSA as “law enforcement” personnel, which specifically include “security personnel in correctional institutions.”  The opinion letter can be found here.  The letter concludes that, although the “jailers” lack the power to make arrests, they do qualify as “security personnel in a correctional institution” and therefore for the partial overtime exemption.

The opinion letter does not discuss what the duties of a “jailer” entail, but does discuss the applicable statutory section as follows:

“Unlike the general “law enforcement” definition contained in section 553.211(a), the specific description of “security personnel in correctional institutions” in section 553.211(f) does not require that the employee have the power to make arrests in order to come within the section 7(k) partial exemption. Rather, “[e]employees of correctional institutions who qualify as security personnel for purposes of the section 7(k) exemption are those who have responsibility for controlling and maintaining custody of inmates and of safeguarding them from other inmates or for supervising such functions . . . .” 29 C.F.R. § 553.211(f). Therefore, the jailers here meet the definition of an “employee in law enforcement” under section 7(k).”

The third Non-Administrator signed Opinion Letter discusses whether the on-call time spent by employees is considered hours worked under sections 6 and 7 of the FLSA.  Employees were required to stay in the coverage area while on-call and respond to a call within eight minutes. During the winter season the calls may occur every day, but during the non-winter seasons the employee may be called once or twice a week and sometimes not at all.  The opinion letter can be found here.  The letter concludes that with respect to the winter season, on-call time is compensable under the FLSA, but for non-winter seasons, the on-call time is not compensable.

The fourth Non-Administrator signed Opinion Letter discusses whether an employer’s break and meal policy violates the FLSA.  The opinion letter can be found here.  Six questions were presented regarding the following written break and meal period policy: 

  • “The company may offer employees a 15-minute break during each shift of six or more hours. There are normally no guaranteed break periods when the employee is working overtime. Break periods begin as soon as the employee has removed himself or herself from the scheduled daily work routine.
  • All employees working six or more hours in a shift must receive a 30-minute, uninterrupted, and unpaid meal period. The meal period requirements cannot be waived by the employee nor substituted for any other time.
  • There may be instances when, because of staffing or workloads, a meal period may not be available to all staff members. If any non-exempt employee does not take a meal period as required by the New York State Department of Labor, that employee should notify his or her manager and note this on the timecard so he or she will be compensated for the time.
  • Unused break periods or meal periods cannot accumulate nor can they be combined.”

Question 1: “If an employee fails to take a meal break and does not notify the manager that he did so in direct violation of the policy, is additional straight time compensation due if less than 40 hours were worked (assuming minimum wage still was received)?

Answer 1: “In a workweek in which no overtime hours have been worked … an employee subject to section 6 of the FLSA is considered to be paid in compliance with the FLSA if the employee’s total wages for the workweek divided by the compensable hours worked equal or exceed the applicable minimum wage. Thus, in the situation described above, if the employee receives at least the minimum wage for all the hours worked (including the time worked because of a missed meal period), no additional compensation is due.”

Question 2: “Is the ‘missed meal’ period considered work time for purposes of determining overtime compensation?”

Answer 2: Yes.

Question 3: “Assume that an employee is regularly scheduled to work 35 hours per week. If he or she begins work early or works after the regular finishing time, is additional straight time compensation due (assuming that, even with these unrecorded, extra hours the worker received the minimum wage for all hours of work and also assume that a published policy prohibits all forms of off-the-clock work)?”

Answer 3: See Answer 1.  If the additional hours worked result in the employee working in excess of 40 hours in a workweek, the employee must be paid overtime.

Question 4: Would the Department of Labor change its response to Q3 if the employee was advised in writing not to work any unrecorded work hours at any time and was subject to disciplinary action?

Answer 4: They do not have enough information to determine the response.  In general, “it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough.”

Question 5: “If an employee receives premium pay that is not otherwise due (e.g., time and one-half for working over 8 hours in a day) is that an off-set against any straight-time pay or overtime pay that may be due in that workweek?”

Answer 5: “Under sections 7(e)(5), (6), and (7) of the FLSA, 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 days are regarded as overtime premiums. In such situations, the extra compensation provided by the premium rates need not be included in the employee’s regular rate of pay for the purpose of computing overtime compensation. Moreover, under section 7(h) of the FLSA that extra compensation described in sections 7(e)(5), (6), or (7) may be credited toward the overtime compensation payments”

Question 6: “Does the Department of Labor have a guideline for time that is de minimis or subject to rounding off? The employer utilizes electronic time clocks that record ‘punched time’ in one-minute increments.”

Answer 6: “As noted in 29 C.F.R. § 785.48(b), for enforcement purposes, the payment of wages based on recording and computing time to the nearest five minutes, or the nearest one tenth or quarter of an hour, will be accepted provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked …

As explained in 29 C.F.R. § 785.47, in recording working time, insubstantial or insignificant periods of time outside the scheduled working hours that cannot practically be precisely recorded may be disregarded. The courts have held that such periods of time are de minimis. This rule applies only where a few seconds or minutes of work are involved and where the failure to count such time is due to considerations justified by industrial realities. An employer may not arbitrarily fail to count as hours worked any part, however small, of the employee’s fixed or regular working time. Where an employer fails to pay an employee for any part of the employee’s fixed or regular working time, however small, it would be considered a violation of the FLSA. See FLSA2004-8NA; see also Field Operation Handbook § 30a02(a).”

The fifth Non-Administrator signed Opinion Letter addresses whether or not salespersons qualify for the outside sales exemption.  The opinion letter can be found here.  The letter concludes that the position is exempt.

The opinion letter recounts the applicable facts as follows:

“Your client employs salespersons to sell novelty items at promotional events and other locations. The salespersons report to your client’s place of business at 7:30 a.m. to retrieve the product from the employer’s inventory as well as promotional brochures, receipt books, and folding tables. The salespersons also attend a motivational sales meeting before traveling to the assigned sales location/event. The salespersons sell the product at one location/event for approximately three to six days. Often, the salespersons sell the product outside the entrance of a retail store; alternatively, your client may have an arrangement to allow the salespersons to sell inside the store. The salespersons collect payments directly from customers. They return to your client’s place of business by approximately 5:30 p.m. and turn over the proceeds from the sales, as well as any unsold product. The salespersons receive a sales commission based on a previously agreed rate.”

Contributed by Alexis J. Alber

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