The Department of Labor's Wage and Hour Division (WHD) issued 36 Fair Labor Standards Act (FLSA) opinion letters between January 14 and 16, 2009. Because 18 of those letters, however, were not actually mailed until after January 20, 2009 – the day President Barack Obama was sworn in – the WHD has withdrawn those letters for further consideration.
The majority of the 18 withdrawn letters (11) concern §13(a) of the FLSA, which governs exceptions to the mandatory overtime requirement. No reasons for withdrawal were provided, and the original opinion letters are not available for reading. It is reasonable to believe, however, that the letters are being reviewed to determine whether more employee-friendly results may be provided.
The 18 remaining, un-withdrawn letters address a variety of wage and hour topics, including maintaining employees' exempt status and whether additional pay is necessary in certain circumstances. This Alert will address a few of the letters of broad employer interest.
In FLSA2009-2, an employer sought assurance that its practice requiring exempt employees to use vacation time during a planned facility shutdown of less than one week did not violate the salary basis test and, therefore, did not jeopardize the employees' exempt status. The WHD held that such a practice did not violate the salary basis test, provided that the employees received pay in an amount equal to their guaranteed salary. In FLSA2009-14 and FLSA2009-18, the WHD held that employers' proposed salary deductions jeopardized employees' exempt statuses because the deductions were due to the employer's unplanned lack of work. Under 29 C.F.R. §541.602(a), an employee is deemed not to be paid on a salary basis where deductions are made from predetermined compensation because the employer's operating requirements do not necessitate that the employee work. Thus, the employers' plans to involuntarily idle exempt employees for periods of time less than a week in length would destroy the employees' exempt status.
The fact that there were three submissions requesting guidance on how to use involuntary, paid and unpaid time off programs with regard to exempt employees – without jeopardizing their exempt status – demonstrates that many employers are undergoing economic difficulties. It also shows that employers are creatively exploring time-off programs to avoid permanent lay offs.
Two opinion letters of note covering the same topic, but reaching different conclusions, are FLSA2009-1 and FLSA2009-13. Both opinion letters concern time spent outside of normal working hours on training programs. Generally, any time spent working is work time and, therefore, compensable. Regarding training programs, the general rule is that a training program is not counted as working time provided that: (a) attendance is outside of regular working hours; (b) attendance is genuinely voluntary; (c) the program is not directly related to the employee's job; and (d) the employee does not perform any productive work while in attendance. 29 C.F.R. § 785.27. In FLSA2009-1, the issue concerned whether attendance at state-mandated child care classes satisfied the criteria. The WHD held that the mandated class satisfied 29 C.F.R. §785.27's criteria, even though the course was required for employees to maintain their child care licenses, as the training was beneficial to workers both inside and outside the child care industry, and because institutions of learning offered similar classes. In FLSA2009-13, the issue concerned whether attendance at an outside vendor's classes satisfied the criteria. In this instance, the WHD held that 29 C.F.R. §785.27 (c) was not satisfied because the class was directly related to the employees' jobs, because such training allowed them to perform their present jobs better, and institutions of learning did not offer similar courses. From these two opinion letters, employers learn that the more general and non-job specific the training, the more likely the criteria will be satisfied (and, therefore, the time that employees spend at such training is not subject to payment of wages); the more the training is focused on employees' present work, the less likely the criteria will be satisfied.