On July 28, 2008 the Department of Labor (“DOL”) proposed another round of revisions to its Fair Labor Standards Act regulations. Unlike the August 2004 revisions, which significantly altered the “white collar” exemption regulations, the stated goal of the latest proposed revisions is merely to “clean up” regulations that are out of date due to subsequent legislation and/or court decisions. Among the proposed revisions, the DOL seeks to:
- Document the increase in the minimum wage from $5.85 per hour effective July 24, 2007, to $6.55 per hour effective July 24, 2008 and to $7.25 per hour effective July 24, 2009.
- Clarify the circumstances under which employees must be compensated when using an employer-owned vehicle for home-to-work commuting.
- Exclude stock options meeting certain criteria from the regular rate calculation for overtime purposes.
- Clarify the calculation of the tip credit and the circumstances under which a tip credit may be taken.
- Explain when a meal credit may be taken from an employee’s wages, including that the employee’s acceptance of the meal credit may be required as a condition of employment.
- Specify that the receipt of a bona fide bonus or premium payment does not invalidate the fl uctuating workweek method of calculating overtime pay. See the July 2006 edition of FLSA Focus for an explanation of the fl uctuating workweek method and how it can reduce overtime costs for nonexempt salaried employees whose weekly work hours vary.
- State that once a public employee requests compensatory time off, the agency must permit the employee to use the time off within a reasonable period after the request.
- Expand the overtime exemptions to include: (i) employees working on ditches, canals and reservoirs where 90% (rather than the current regulation’s 100%) of the water is used for agricultural purposes; (ii) employees who engage in “fire protection activities”; and (iii) salespersons primarily engaged in selling boats.
- Eliminate the overtime exemption for partsmen and mechanics servicing trailers or aircraft.
Although these proposed “cleanup” regulations would not significantly modify the current state of the law, some labor unions nevertheless contend in comments submitted to the DOL that the proposed regulations should be revised or withdrawn because they weaken employee rights and benefit only employers. Various pro-business groups and employers are in favor of the proposed revisions. The DOL is currently considering more than 30 comments.