New DOL Wage and Hour Opinion Letters Bring Clarity

Posted by Olivia Grady on Tuesday, April 24th, 2018 at 11:42 am - Permalink

On April 12, 2018, the U.S. Department of Labor (DOL) issued three new wage and hour opinion letters.

The letters address compliance under the Fair Labor Standards Act (FLSA) and other laws.

The first letter answers what counts as work time when employees, specifically hourly technicians, travel for work under the FLSA. Acting Administrator of the Wage and Hour Division (DOL) Bryan Jarrett answers this question by saying that employees don’t need to be compensated for normal commute time unless it’s time travelling between job sites during the work day. Also, travel time away from home during a workday needs to be compensated. Driving a company vehicle alone, however, does not make the time travelled compensable.

If an employee does not have a normal work schedule, the company should consider the previous month’s typical work hours as normal work hours or follow the employee’s average start and end times. The employer and employee may also negotiate a reasonable amount of time for which travel away from the employee’s home is compensated. Further, an employer may choose whether to compensate an employee for the time travelled in a car if an employee does not choose public transportation. Finally, the time travelled between a hotel and work is considered commute time, rather than work time, and does not need to be compensated.

The second letter answers the question of whether an employer has to compensate an employee for fifteen-minute breaks (every hour) that the employee is required to take for health reasons. The Acting Administrator wrote that breaks of up to 20 minutes are generally compensable because they benefit the employer. However, in this case, because the breaks are for the benefit of the employee, breaks outside of the normal prescribed breaks by the employer are not compensable.

The final letter answers whether under Title III of the Consumer Credit Protection Act certain payments from employers to employees are “earnings” for garnishment purposes. Title III limits the amount of disposable earnings that can be garnished. Disposable earnings are the earnings (i.e. wages, bonus, commission, etc.) remaining after all amounts required by law are withheld. To determine if the payments are earnings, the Wage and Hour Division must decide whether the employer paid the amount for the employee’s services. The timing of the payment may affect this determination.

The Wage and Hour Division concludes in the letter that the following payments are earnings: “commissions, discretionary and nondiscretionary bonuses, productivity or performance bonuses, profit sharing, referral or sign-on bonuses, moving or relocation incentive payments, attendance awards, safety awards, cash service awards, retroactive merit increases, payment for working during a holiday, termination pay, and severance pay.” Reimbursements for medical expenses, however, are not earnings, along with the portions of a wrongful termination settlement payment that are for compensatory or punitive damages. Buybacks of company shares also do not qualify as earnings.

These letters will help provide clarity for businesses and employees.

The Center for Worker Freedom supports Secretary Alex Acosta’s decision to resume this opinion letter practice of more than seventy years after it was stopped in 2010.