DOL Releases New FLSA Opinion Letters and Fact Sheet

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The Department of Labor (DOL) has released three new opinion letters on the Fair Labor Standards Act (FLSA), addressing (1) travel time, (2) rest breaks under the Family and Medical Leave Act, and (3) lump sum payments as “earnings” subject to garnishment. Opinion letters respond to a specific wage-hour inquiry from an employer or other entity to the DOL, and represents the DOL’s official position on that particular issue. Other employers may rely on these opinion letters. The DOL also released a fact sheet that summarizes the applicable exemptions to typical jobs in higher education.

Travel Time:  Under the FLSA, normal commuting time to and from work is not considered compensable working time. As for overnight travel away from home, employees must be compensated for such time for those hours that correspond to their normal work hours, but need not be compensated for travel time as a passenger outside normal work hours. If the employee is required to drive, all travel time is compensable.

In Opinion Letter FLSA 2018-18, the DOL first addresses the issue of compensability of overnight travel for employees who do not have normal work hours. The DOL notes that this type of situation will be closely scrutinized, since a careful review of records “usually reveals work patterns sufficient to establish regular work hours.” In those rare situations where there are no normal work hours, the DOL offers different methods for determining compensable travel time. One is to review the employee’s time records for the most recent month and see if there is a pattern of typical work hours, which the employer may then utilize going forward. The employer can also choose the average start and end times. Another method is for the employer and employee/employee’s representative to negotiate and agree to the compensable travel time. The DOL notes that there may be other methods as well.

The DOL also states that if an employee chooses to drive rather than be a passenger, the employer may choose to compensate for the driving hours or for the time that would have counted as hours worked if the employee were a passenger. (Note that if the employer requires the employee to drive, all driving hours are considered hours worked).

Further, the DOL states that the time spent traveling between an employee’s hotel and the work site to which they are temporarily assigned is ordinary non-compensable home-to-work travel.

The second situation involves an employee who is required to come to the office to get job itineraries before traveling to a customer location, and the third situation involves employees who drive from home to multiple customer locations during the day. The time spent traveling from home to the office or first work site is non-compensable commuting time, but travel between job sites, including the office, is compensable travel time. The DOL notes that the use of a company vehicle does not affect this analysis.

Rest Breaks for a Serious Health Condition:  Under the FLSA, rest breaks of up to 20 minutes in length are generally considered to be compensable time, because they are deemed predominantly to benefit the employer. In Opinion Letter FLSA2018-19, however, the DOL recognizes that some short breaks predominantly benefit the employee, and are therefore not compensable. Specifically, the DOL stated that short breaks because of a serious health condition under the Family and Medical Leave Act fall into this category. Moreover, the FMLA provides that leave may be unpaid, without exception for breaks under 20 minutes. The DOL also notes that breaks that are provided as a reasonable accommodation under the ADA similarly predominantly benefit the employee and are noncompensable. The DOL goes on to state, however, that the employee with a serious health condition must be given the same number of paid breaks as other employees, even if those breaks are being used to address their health needs.

Garnishment of Lump Sum Payments:  In Opinion Letter CCPA2018-INA, the DOL addresses whether certain lump-sum payments from employers to employees are earnings for garnishment purposes under Title III of the Consumer Credit Protection Act (CCPA). The DOL notes that this issue turns on whether the payments are being made for the employee’s services, in which case they would be considered such earnings. The DOL then sets forth a list of lump-sum payments that will be considered earnings for purposes of the CCPA:

  • Commissions
  • Discretionary and nondiscretionary bonuses
  • Productivity or performance bonuses
  • Profit sharing
  • Referral and sign-on bonuses
  • Moving or relocation incentive payments
  • Attendance, safety, and cash service awards
  • Retroactive merit increases
  • Payment for working during a holiday
  • Workers’ compensation payments for wage replacement
  • Termination pay (e.g., payment of last wages, as well as any outstanding accrued benefits)
  • Severance pay that is tied to the employee’s length of service
  • Back and front pay payments from insurance settlements (e.g. workers’ compensation or wrongful termination insurance settlements). The non-pay portions from such settlements would not be considered earnings.

On the other hand, the buyback of company shares would not be considered earnings, as they are a “flexible way of returning money to shareholders relative to dividends.”

Overtime and Minimum Wage Exemptions for Higher Education Employees: The DOL also issued a new Fact Sheet # 17S: Higher Education Institutions and Overtime Pay Under the Fair Labor Standards Act (FLSA). The FLSA provides for exemptions to the minimum wage and overtime requirements for certain executive, professional and administrative employees (i.e. the “white collar” exemptions). In order to qualify for these exemptions, the employee must be paid on a salaried basis. The Fact Sheet reviews the applicability of the white collar exemptions to typical jobs in higher education institutions:

  • Professors, instructors, and adjunct professors whose primary duty is teaching, even if they spend considerable time in extracurricular activities, are covered by the teacher exemption. This may include those who teach remotely or online.
  • Coaches who instruct student-athletes in how to perform their sport are also covered by the teacher exemption, but not those whose primary duties are recruiting or student interviews.
  • Certified public accountants, psychologists, certified athletic trainers, and librarians typically meet the professional exemption. The DOL also notes that postdoctoral fellows conducting research meet this exemption, and may also qualify for the teacher exemption if teaching is their primary duty.
  • Admissions counselors or student financial aid officers meet the general administrative employees exemption.
  • There is also a more specialized academic administrative personnel exemption, and this includes department heads, intervention specialists, and academic counselors.
  • Deans, department heads, directors meet the executive exemption.

In addition, the DOL notes that certain student-employees are not subject to the minimum wage and overtime requirements of the FLSA.

  • Graduate teaching assistants whose primary duty is teaching meet the teacher exemption.
  • Research assistants performing research under faculty supervision while obtaining a degree are not employees, even if they receive a stipend.
  • Residential assistants who are enrolled students and who receive reduced room or board charges or tuition credits are not employees.