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DOL Issues Several Wage and Hour Opinion Letters
The Wage and Hour Division ("WHD") of the United States Department of Labor ("DOL") recently issued several opinion letters responding to inquiries about wage and hour issues under the federal Fair Labor Standards Act ("FLSA").
- Do various employees qualify as exempt? In a series of separate opinion letters, the WHD addressed the exempt status of several specific categories of employees.
Senior Legal Analyst: The WHD found that a Senior Legal Analyst for a corporation does not fall under the administrative overtime exemption. The Senior Legal Analyst, who had two years of legal studies and eight years of experience in legal research and analysis, received assignments from attorneys to analyze facts, identify legal issues, and interpret the law for use by the attorneys. The WHD found that these duties and responsibilities do not satisfy the requirement of using "discretion and independent judgment in matters of significance" with regard to the administration of the business. The WHD also found that the Senior Legal Analyst position did not fall under the professional exemption that requires an advanced specialized academic degree for entry into the field. Wage and Hour Division Opinion Letter, FLSA2006-27.
Gasoline Service Station Managers: The WHD found that gasoline service station managers can still be classified as exempt at times they performed additional duties under the varying scenarios specifically set forth in the opinion letter (including traveling to other stations to perform managerial paperwork, performing banking duties for other managers off work, and training new managers). Wage and Hour Division Opinion Letter, FLSA2006-29.
Loss Prevention Managers: The WHD found that Loss Prevention Managers ("LPMs") employed by a large retail business qualified for the administrative exemption under the FLSA. The LPM's primary function was to implement a loss prevention and shortage control program for a particular store, which impacts that store's profitability. The WHD concluded that the LPM's duties related to "the management or general business operations of the employer" and that the LPMs demonstrated "the exercise of discretion and independent judgment with respect to matters of significance." Wage and Hour Division Opinion Letter, FLSA2006-30.
Mortgage Loan Officers: The WHD found that the described Mortgage Loan Officers ("MLOs") were exempt administrative employees under the FLSA. The MLOs worked with the employer's customers in identifying and securing a mortgage loan, and the MLOs' overall role was designed to help customer's achieve their financial goals and related tasks, which involved the requisite discretion and judgment. Wage and Hour Division Opinion Letter, FLSA2006-31.
Hospital Respiratory Therapists: The WHD found that Hospital Respiratory Therapists ("RTs") did not fall under the professional exemption under the FLSA. Even though the RTs were required to maintain active state licenses, involving a two to four year educational program, the occupation did not require advanced knowledge acquired by a prolonged course of specialized intellectual instruction or an advanced degree. Wage and Hour Division Opinion Letter, FLSA2006-26.
Case Managers: The WHD found that Case Managers who provided teaching and related assistance to individuals with developmental disabilities concerning skills needed to live independently did not qualify for the administrative exemption. The Case Managers performed only the day-to-day services of the employer and not administrative functions relating to management. Wage and Hour Division Opinion Letter, FLSA2006-20NA.
- Can deductions from commission payments for cash shortages effect exempt status under the FLSA? Not in this case. The WHD preliminarily explained that to be exempt, the employee must be paid a guaranteed salary of at least $455 per week and can receive additional compensation regardless of whether deductions are made from that additional compensation. The WHD accordingly declared that cash shortage deductions may be made from a salaried exempt employee's commissions without affecting the employee's exempt status under the FLSA, so long as the commission payments are bona fide and are not paid to facilitate otherwise prohibited deductions from the guaranteed salary. Wage and Hour Division Opinion Letter, FLSA2006-24.
- Is the Board of Education's record keeping system proper under the FLSA? Yes. The WHD was asked to provide an opinion on whether the recordkeeping of the Board of Education, which pays its employees on an annual basis for work performed in a period shorter than a year, complies with the requirements of the FLSA. The employees' daily rates were multiplied by days worked and then divided into 24 semi-monthly paychecks. The WHD specifically found that records kept based on this manner of payment complied with the FLSA's requirement to include the "date of payment and the pay period covered by payment." Wage and Hour Division Opinion Letter, FLSA2006-25.
- Is the employer's sick leave policy a "bona fide" plan? Yes. The WHD was asked for its opinion on whether an employer's sick/vacation leave plan for its exempt employees qualified as a "bona fide" plan under the FLSA and implementing regulations. The question involves the FLSA regulations which allow an employer to make a pay deduction for absences of one or more full days due to sickness or disability if the deduction is made in accordance with a "bona fide" paid sick leave policy or practice. Specifically, deductions may be made for full-day absences before an employee has qualified for the plan or after the employee has exhausted the leave allowed under the plan. The WHD explained that a "bona fide" policy is one that is communicated to eligible employees, operates as described in the policy, and allows for a reasonable number of paid sick days. The employer's plan was found to be reasonable because it allowed for one week of vacation which could be used as sick leave and one day of sick/personal leave after one year of employment, with increases thereafter. Wage and Hour Division Opinion Letter, FLSA2006-32.
- Lastly, the WHD declared its support for volunteerism and set forth the FLSA criteria for determining whether an individual can be classified as a volunteer for a public agency. The WHD addressed several proposed scenarios and questions relating to the criteria applicable to those scenarios. Wage and Hour Division Opinion Letter, FLSA2006-28.
Proposed Sexual Harassment Training Regulations Out For Public Comment Again
The Fair Employment and Housing Commission ("FEHC") met on October 2, 2006, and adopted its latest set of proposed sexual harassment training regulations, which can be found at www.fehc.ca.gov/pub/pdf/10-02-06_reg.pdf. The proposed regulations are subject to another public comment period, closing on November 10, 2006. The proposed modifications contain clarifications on the definition of covered employers, covered supervisors, types of effective interactive training, acceptable trainers, tracking of the two-year requirement, training for new business and new supervisors, and required content for training.
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