December 01, 2008
US Department of Labor Issues Opinion Letter on Eleemosynary Activities
Filed under: News
Vision Payroll

The US Department of Labor recently issued Administrator signed Opinion Letter FLSA2008-8. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act (FLSA). This Opinion Letter discusses which revenues of a non-profit shelter for homeless animals count toward “the $500,000 threshold for enterprise coverage under §3(s)(1)(A) of the FLSA”. Revenue for the shelter comes from the following four sources:

  • Cash donations
  • Fees for adoptions and spay/neuter certificates
  • Membership dues
  • Interest and dividends

FLSA provides coverage in two ways—enterprise coverage and individual coverage. Among other activities, enterprise coverage applies to enterprises with “sales made or business done” of $500,000 or more and two or more employees engaged in commerce or the production of goods for commerce. Since the US Department of Labor has generally held that income from eleemosynary activity does not count toward the $500,000 threshold, the shelter income from donations or dues would not be included in the calculation. Since services for adoptions and spay/neuter certificates are for a “business purpose…in competition with other businesses” they do not qualify as eleemosynary activities. Interest and dividends must also be counted toward the $500,000 threshold. Since the revenue of the shelter from these sources was less than $500,000, employees of the enterprise do not qualify for coverage under FLSA enterprise coverage.

Employees may still be covered under FLSA individual coverage for “any workweek in which they are engaged in interstate commerce, the production of goods for commerce, or activities closely related to and directly essential to the production of goods for commerce.” Examples given include the following:

  • Making or receiving interstate telephone calls
  • Shipping materials to another state
  • Transporting persons to another state
  • Transporting property to another state

The Opinion Letter states that the US Department of Labor does not require coverage for employees who only occasionally spend “an insubstantial amount of time performing” such work.

State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.


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