Vision Payroll

March 2, 2010

US Department of Labor Issues and Withdraws Opinion Letter on Exempt Status of Client Service Managers

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-26. 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). Because the letter was apparently never mailed after it was signed, the DOL under new Secretary Hilda L. Solis has decided to withdraw the letter for further consideration. Therefore, this letter may not be relied upon as a statement of agency policy. It is possible that a different conclusion may be reached when the Opinion Letter is reissued.

In this Opinion Letter, the DOL had stated that client service managers (CSMs) at an insurance agency were exempt administrative employees. The general qualifications for an exempt administrative employee are an employee:

  1. Compensated on a salary or fee basis at a rate of not less than $455 per week . . . ;
  2. Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
  3. Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

It was assumed for the purposes of this opinion letter that the first qualification was met. Since the work the CSMs performed was similar to work performed by employees “ordinarily considered to meet the duties requirements for the administrative exemption” and since “the CSMs primary duty includes the exercise of discretion and independent judgment with respect to matters of significance”, the CSMs were considered to have met the “requirements of the administrative exemption and are accordingly exempt from the minimum wage and overtime requirements of the FLSA.”

State laws may provide rules that are more beneficial to the employee and must be followed. The DOL may come to a different conclusion when it reissues the Opinion Letter after further consideration. Contact Vision Payroll if you have questions about this Opinion Letter.

March 1, 2010

US Department of Labor Issues and Withdraws Opinion Letter on Salary Deductions from Exempt Registered Nurse

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-25. 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). Because the letter was apparently never mailed after it was signed, the DOL under new Secretary Hilda L. Solis has decided to withdraw the letter for further consideration. Therefore, this letter may not be relied upon as a statement of agency policy. It is possible that a different conclusion may be reached when the Opinion Letter is reissued.

In this Opinion Letter, the DOL had ruled that employers could take deductions from an exempt salaried employee based upon the number of work hours missed when an employee misses an entire day of work. The employee in question was a Registered Nurse (RN) who was paid a salary to be on call and available for surgery. She was paid whether or not she was actually called in to the hospital. At some times, the RN was not available to be called for a full day. As long as the employee was absent for at least one full day, a deduction from her salary was permissible.

State laws may provide rules that are more beneficial to the employee and must be followed. The DOL may come to a different conclusion when it reissues the Opinion Letter after further consideration. Contact Vision Payroll if you have questions about this Opinion Letter.

February 28, 2010

US Department of Labor Issues and Withdraws Opinion Letter on Overtime Pay for Employees with Fluctuating Workweeks

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-24. 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). Because the letter was apparently never mailed after it was signed, the DOL under new Secretary Hilda L. Solis has decided to withdraw the letter for further consideration. Therefore, this letter may not be relied upon as a statement of agency policy. It is possible that a different conclusion may be reached when the Opinion Letter is reissued.

In this Opinion Letter, the DOL had opined that a proposed pay system complied with the fluctuating-workweek method of payment. Under the proposed method, the employer would calculate the regular rate of pay by dividing a non-exempt employee’s fixed salary by 40 hours, regardless of the number of hours actually worked in that week, and using that rate to determine any overtime premium or double-time premium to be paid.

State laws may provide rules that are more beneficial to the employee and must be followed. The DOL may come to a different conclusion when it reissues the Opinion Letter after further consideration. Contact Vision Payroll if you have questions about this Opinion Letter.

February 27, 2010

US Department of Labor Issues and Withdraws Opinion Letter on Tipped Employees

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-23. 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). Because the letter was apparently never mailed after it was signed, the DOL under new Secretary Hilda L. Solis has decided to withdraw the letter for further consideration. Therefore, this letter may not be relied upon as a statement of agency policy. It is possible that a different conclusion may be reached when the Opinion Letter is reissued.

In this Opinion Letter, the DOL had redefined its definition of a tipped employee in situations in which an employee performs some duties related to a tip-producing occupation and some duties unrelated to a tip-producing occupation. Such employees may have dual jobs, such as a maintenance man in a hotel who also serves as a waiter and a single job with dual responsibilities such as “a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses.”

Different courts had issued conflicting rulings as to whether and to what extent unrelated duties could be performed in tip-producing occupations, how those duties were to be determined, and when the tip credit could be taken. The DOL had attempted to clarify in which situations the credit could be claimed. It had listed certain duties that it considered “core or supplemental for the appropriate tip-producing occupation.” It also wanted to clarify that some time spent performing unrelated duties may be exempt under a de minimis rule in the regulations.

State laws may provide rules that are more beneficial to the employee and must be followed. The DOL may come to a different conclusion when it reissues the Opinion Letter after further consideration. Contact Vision Payroll if you have questions about this Opinion Letter.

February 22, 2010

US Department of Labor Issues and Withdraws Opinion Letter on Minimum Tip Credit

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-22. 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). Because the letter was apparently never mailed after it was signed, the DOL under new Secretary Hilda L. Solis has decided to withdraw the letter for further consideration. Therefore, this letter may not be relied upon as a statement of agency policy. It is possible that a different conclusion may be reached when the Opinion Letter is reissued.

In this Opinion Letter, the DOL confirmed its previously stated position “that where a state law requires a minimum wage less than the federal minimum wage and forbids a tip credit, the employer may nevertheless take a tip credit in the amount of the difference between state and federal law.” The Opinion Letter was specifically concerned with a Minnesota law that “purports to prohibit taking a credit for gratuities ‘towards the payment of the minimum wage set…by federal law.’”

State laws may provide rules that are more beneficial to the employee and must be followed. The DOL may come to a different conclusion when it reissues the Opinion Letter after further consideration. Contact Vision Payroll if you have questions about this Opinion Letter.

February 20, 2010

Nondiscretionary Safety Bonus Complies with Overtime Rules

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-21. 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).

In this Opinion Letter, the DOL stated that a company’s nondiscretionary safety bonus complies with the overtime requirements of the FLSA. Employees who meet certain requirements during a specified period receive a set amount for each regular hour worked. Employees who worked overtime during that period will receive one and one-half times the set amount for each overtime hour worked. “The bonus is applied uniformly across all hours worked, and an additional one-half times the bonus rate is paid for all overtime hours” so the plan complies with the FLSA.

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.

August 31, 2009

Use of Employee Leasing Company Could Subject Non-profit Institution to FLSA

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-20. 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).

In this Opinion Letter, the DOL stated that non-profit organizations could be subject to enterprise coverage under the FLSA. In those situations in which the leasing company and the non-profit organization are determined to be a single enterprise, an otherwise exempt non-profit institution could be subject to the FLSA. The leasing company’s status as a covered enterprise under the FLSA could jeopardize the non-profit’s exempt status under the FLSA. Although organizations which have received an Opinion Letter from the DOL might be able to be assured that their status has not been jeopardized, other non-profit organizations should consider if any perceived benefits of using an employee leasing organization are worth the substantial risk of losing their exempt status under the FLSA.

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.

August 16, 2009

US Department of Labor Issues Opinion Letter on Transportation Authority Employees

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-19. 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).

In this Opinion Letter, the DOL concluded that fire protection employees of a Transportation Authority, “a public benefit corporation created by, and organized under, state law”, qualified as employees in fire protection activities. As such, the FLSA provides a partial overtime pay exemption. Fire protection employees have a “maximum hour standard” that must be met before overtime is required. The standard runs from fifty-three hours in a seven-day work period to 212 hours in a twenty-eight day period.

Furthermore, buybacks of vacation time may be excluded from the regular rate of pay when calculating overtime pay, but stipends for quarterly perfect attendance must be included in the regular rate of pay.

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.

August 11, 2009

US Department of Labor Issues Opinion Letter on Mandatory Time-off for Salaried Employees

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-18. 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).

In this Opinion Letter, the DOL addressed two questions regarding an employer’s accrued paid time-off (PTO) plan.

Are exempt employees who are required to take PTO during periods of “low patient census” in danger of losing their exempt status?

If an exempt employee’s accrued PTO is exhausted and the periods of low patient census continues, could [the employer] schedule the exempt employee for less than forty hours and reduce pay accordingly?

In response to the first question, the DOL stated “[a]n employee will not be considered to be paid “on a salary basis,” however, if any deductions from the salary are made for full or partial day absences occasioned by the employer or by the operating requirements of the business.” Therefore, those employees could lose their exempt status if such deductions are made.

As for the second question, the DOL concluded, [u]nlike a salary reduction that reflects reduction in the normal scheduled workweek and is not designed to circumvent the salary basis, deductions from salary due to day-to-day or week-to-week determinations of the operating requirements of the business are precisely the circumstances the salary basis test is intended to preclude. Such a plan is, therefore, inconsistent with the guaranteed salary basis of payment required by the regulations.”

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.

August 10, 2009

US Department of Labor Issues Opinion Letter on On-Call Hours for Water District Employees

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-17. 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).

In this Opinion Letter, the DOL explained how the FLSA applies to certain on-call employees of a Special Services District (District). The guidelines are:

  • Employees are on-call after normal working hours. On-call hours are assigned on a rotating basis for a one-week period. Employees are on-call approximately every eight weeks, and they may switch schedules with other employees.
  • The District provides the on-call employee a mobile telephone and a vehicle with necessary tools, should they need to respond to an emergency.
  • Employees are not restricted to any location while on-call, but are expected to respond within 45 to 60 minutes of receiving an emergency call.

Travel time to the emergency locations generally runs 5-20 minutes, there are 2-5 emergency calls per month, on-call employees generally do not receive more than one call per night, and the average work time at a location is 5-10 minutes.

The DOL reached the following conclusions:

  1. The on-call employees need not be compensated for on-call time since the requirements are not so restrictive as to require compensation.
  2. Time spent working after responding to a call is time that employees must be paid for.
  3. If the employee “travels a substantial distance to an emergency site, the employee must be paid for that time. The Wage and Hour Division (WHD), however, does not take a position as to whether such travel to a regular work site is compensable. Therefore, from a WHD enforcement perspective such time is not treated as compensable.

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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