On January 5, 2018, the Department of Labor (DOL) Wage and Hour Division reissued 17 opinion letters to shed light on the DOL’s stance on numerous issues under the Fair Labor Standards Act (FLSA). Under the administration of President George W. Bush, the DOL issued 36 opinion letters, many of which were recalled under President Barack Obama in early 2009. A year later in 2010, the Wage and Hour Division announced it would no longer issue opinion letters in response to employer and business questions about wage and hour issues under the FLSA.
The recently reinstated opinion letters cover a wide range of topics including salary deductions, compensable on-call time, bonuses, employee classifications and exemptions. Although not binding, the letters do offer helpful guidance, especially in the grey areas of the FLSA. Some of the opinion letters include:
- Findings: Deductions from salary may also be made for absences of one or more full days occasioned by sickness or disability (including work-related accidents), if the deductions are made “in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability.” Deductions from an employee’s guaranteed salary for absences may only be taken under section 541.602(a) if the employee misses one or more full days of work. Id. The regulations do not permit salary deductions for partial day absences.
- Findings: Certain job bonuses must be included in the regular rate under section 7(e) of the FLSA. The FLSA provides that the “regular rate” includes “all remuneration for employment paid to, or on behalf of, the employee” (29 U.S.C. § 207(e)) and is the rate used to determine overtime wages.
- Findings: A percentage-of-total-earnings, nondiscretionary bonus needs to apply the percentage only to remuneration includable in the regular rate of pay, which includes overtime. Earnings excludable from the regular rate include expense reimbursements, pay for holidays and vacations, and discretionary bonuses.
- FLSA 2018-7.
- Findings: An employer may calculate a salary deduction for a full-day absence based on the number of hours actually missed. Thus, for example, if an employee was scheduled to work Friday from 2:30 p.m. to midnight, but was unable to work any hours that day for one of the reasons described in section 541.602(b) (absence for personal reasons, absence occasioned by sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice, or unpaid disciplinary suspension imposed in good faith for infractions of workplace conduct rules), the employer could deduct 9.5 hours from the employee’s salary (i.e., the amount actually missed) in accordance with section 541.602(c).
The full list of letters can be found on the DOL website here. Of course, a few of the letters will have a broader and more significant impact on some employers, and some of the letters are very technical or industry-specific. Overall, the opinion letters will guide businesses and employers through certain regularly reoccurring wage and hour issues under the FLSA and will be especially helpful for those businesses that encounter a fact situation already addressed by the Division.