DOL Issues FLSA, FMLA Opinion Letters

To start the new year, the Department of Labor (DOL) issued six new opinion letters: four answering questions about the Fair Labor Standards Act (FLSA) and two addressing Family and Medical Leave Act (FMLA) issues.

• Status reclassification. When a licensed clinical social worker for a healthcare organization reached out to the DOL about being reclassified from exempt to non-exempt status, the opinion letter found that the discontinuation of supervisory responsibilities would not preclude classification as an exempt learned professional under section 13(a)(1) of the FLSA, although the change from being paid on a salary basis to being paid on an hourly basis would likely defeat the exemption, the agency wrote in . While the letter acknowledged that social workers with master’s degrees will generally meet the duties requirements for the exemption, an employee must additionally meet the compensation requirements. If the social worker’s compensation was switched to hourly pay, then the employee would no longer meet the compensation criteria and no longer qualify for the exemption, even if the duties remained the same. Ultimately, the DOL pointed out, even if all the criteria for an FLSA exemption are met, it is the employer, not the employee, that claims the exemption, and the law does not prohibit classifying as nonexempt an employee who would otherwise be exempt.
• Incentive bonus payments. In , the DOL considered whether incentive bonuses may be excluded from the regular rate of pay for overtime purposes. A waste management company paid its drivers $12 per hour and pursuant to a bonus plan, rewarded employees for punctuality, attendance, consistency in completing daily safety tasks, driving safety, compliance with traffic laws, proper attire and performance efficiency, with a maximum bonus per week of $9.50. The bonus was paid along with the base hourly wages for each pay period but was not included in the regular rate of pay for purposes of calculating overtime premiums. Under the facts and circumstances set forth in the request, the agency found that the employer must include the bonus payments in each employee’s regular rate of pay for every workweek they were earned. The payments did not qualify as discretionary bonuses excluded by the Act from the regular rate or fall within any statutory exclusion.
• Roll call period. A 15-minute roll call period would constitute compensable hours worked under the FLSA and therefore counted in the total number of hours that an employee works each workweek for purposes of calculating any overtime pay due, the DOL determined in . The chair of a local union asked for guidance about entering into a collective bargaining agreement that would mandate a 15-minute “roll call” prior to each scheduled shift. However, the parties to the CBA could draft the applicable provision to satisfy the requirements of 29 U.S.C. § 207(b)(1) or 207(b)(2), partially exempting the employees at issue from the overtime requirements of § 207(a).
• Overtime exemption. In , the DOL clarified the applicability of the  overtime exemption in section 7(i) of the FLSA to certain restaurant employees. Section 7(i) provides an overtime exemption for employees of qualifying “retail or service establishments” who are paid primarily on a commission basis. To meet the exemption, (i) the employee’s regular rate of pay must exceed 1.5 times the applicable minimum hourly rate and (ii) more than 50% of the employee’s “compensation” over a designated representative period must consist of commissions. The DOL concluded that an employee who receives at least 1.5 times the federal minimum wage (not any higher applicable state minimum wage) meets the first part of the test. As to the second part, the DOL stated that while tips are not “commissions” under section 7(i) – as distinguished from a restaurant’s “service charges,” which can be – where an employee takes a tip credit to satisfy its minimum wage obligations under applicable law, that portion of the tips is considered “compensation” for purposes of determining whether an employee is primarily paid by commission. The DOL emphasized that because compensation and commission can vary between employees, or even vary for one employee over the course of a representative period, it is “imperative” that employers regularly review any section 7(i) exemption designations to ensure that both pay requirements are met for each employee for the appropriate time periods.
• School closure. In , the DOL considered how a school closure of less than a full week impacts the amount of leave a school employee uses under the FMLA. When a school closes for part of a week during which an employee uses less than a full week of FMLA leave, the period during which the school is closed is not counted as FMLA leave unless the employee was scheduled to work during the period and used FMLA leave for that time, the letter explained. When a school closes for part of a week during which an employee is using a full week of FMLA leave, however, the entire week is counted as FMLA leave. For example, if an eligible employee needs FMLA leave each Tuesday afternoon for physical therapy, but the school is closed all day on Tuesday due to inclement weather and the employee is not required to report for duty, the employer school should not deduct time for that day from the employee’s FMLA entitlement. Whether the closure was planned or unplanned has no impact on the amount of leave an employee uses, the DOL noted.
• Travel time. Can FMLA leave be used for time spent traveling to or from medical appointments either related to an employee’s serious medical conditions or those of a qualifying family member? In , the DOL answered in the affirmative. “In defining ‘serious health condition’ to incorporate immediate medical treatment of, as well as ongoing care for, said condition, the statute makes clear that FMLA leave is appropriately used for time spent in medical appointments to diagnose, monitor, address, or treat an employee’s serious health condition,” according to the letter. “Part and parcel of obtaining care and continuing treatment from a medical provider may require the employee to travel to the provider’s location.” As a result, when an eligible employee travels to or from a health care provider for a medical appointment regarding the employee’s serious health condition, he or she may take FMLA leave not only for the actual appointment, but also the time traveling to or from the appointment. The DOL noted that the FMLA does not protect misuse of leave, and the protected leave for travel time does not encompass travel to or from, or stops for, other unrelated activities. The letter also noted that a health care provider need not provide an estimate of an employee’s travel time to or from an appointment for the medical certification to be complete and sufficient under the Act. 

Why it matters: The opinion letters provide helpful guidance for employers on their compliance obligations under the FLSA and FMLA, including determining hours worked, calculating overtime wages, applying overtime exemptions, and counting FMLA time off.