Vision Payroll

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.

August 4, 2009

QuikTrip Will Pay Almost $750,000 in Overtime Back Wages

The US Department of Labor (DOL) has announced that QuikTrip Corp. (QuikTrip) will pay $747,729 in overtime back wages for violations of the Fair Labor Standards Act. The 3,819 current and former employees affected will receive an average of $196 each.

In announcing the settlement Secretary of Labor Hilda L Solis said, “I am pleased that this case has resulted in almost $750,000 in back wages being paid to thousands of workers across nine states. I am committed to ensuring that every worker is paid the full wages he or she is due, and that those who work overtime receive the compensation to which they are legally entitled.”

Non-exempt employees must be paid overtime at one and one-half times their regular rate of pay. QuikTrip erred by failing to include the amount of non-discretionary bonuses when calculating the regular rate of pay to be used in the overtime premium calculation to employees in Arizona, Georgia, Illinois, Iowa, Kansas, Missouri, Nebraska, Oklahoma and Texas.

Vision Payroll strongly recommends consulting a qualified labor law attorney to ensure that overtime pay is properly calculated.

August 3, 2009

Partners HealthCare Systems, Inc. Agrees to Pay $2.7 Million in Back Wages

The US Department of Labor (DOL) has announced a settlement of a lawsuit it filed against Partners HealthCare Systems, Inc. (Partners) and its affiliates alleging violations of the Fair Labor Standards Act.

According to George Rioux, director of the Boston District Office of the DOL’s Wage and Hour Division (WHD), “The problem was that employees were working for more than one Partners-affiliated hospital or health care facility during a single workweek, but their hours worked during those workweeks were not being combined to determine if overtime was due.”

Management of Partners became aware of the problem and contacted the WHD, which followed with an investigation. The total back wages to be paid for the period from January 1, 2007 to March 21, 2009 is $2,756,514.

The consent judgment was agreed to by both parties. In addition to Partners, the defendants were The Brigham and Women’s Hospital Inc., Faulkner Hospital Inc., The General Hospital Corp. (Massachusetts General Hospital), The McLean Hospital Corp., North Shore Medical Center Inc., North Shore Physicians Group Inc., Newton-Wellesley Hospital, The Spaulding Rehabilitation Hospital Corp., Rehabilitation Hospital of the Cape and Islands, Shaughnessy-Kaplan Rehabilitation Hospital Inc., Partners Home Care Inc., Partners Private Care Inc., FRC Inc. and Partners Community Healthcare Inc.

Vision Payroll strongly recommends consulting a qualified labor law attorney to ensure that overtime pay is properly calculated.

July 15, 2009

Tip of the Week: Who Needs a Vacation?

Filed under: News — Tags: , , , , — Vision @ 10:00 pm

Employers are often thrilled to have those employees who are always on time, never take a sick day, and never take a vacation. But are they model employees, necessary employees, or a stress case waiting to happen? Does returning to a desk-full of unfinished work worry them? Are they worried about losing work to a co-worker? Or in this time of layoffs are they worried about appearing to uncommitted to their work?

Learn the answers to these questions and also what you need to know about how local laws may impact your vacation policies in this month’s HRCast, a recording provided by our team of HR Pros and available exclusively on MyHRSupportCenter. You’ll learn if you must offer vacation time and if you should offer vacation time. Learn if you can cap the employee’s balance at some pre-determined level, whether you can limit how much vacation is taken, or when it is taken. Learn what you need to know about forced vacation time and how it’s impacted by the employee’s exempt or non-exempt status.

Visit MyHRSupportCenter regularly not only for our HRCasts, but also to get late-breaking compliance alerts, best practices to implement, and HR tools to use every day. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

May 3, 2009

US Department of Labor Issues Opinion Letter on Retroactive Overtime Calculation

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-3. 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, an employer requested an opinion as to whether its method of calculating retroactive overtime pay was compliant with the FLSA. After a reorganization at the employer, certain formerly exempt employees no longer performed the duties that qualified them as exempt. These employees had been paid a salary even after they had become non-exempt employees. This salary might have been reported on their bi-weekly pay stubs as 100 hours worked at $18.25 per hour for a salary of $1,825.00 regardless of the number of actual hours worked. This was due to an understanding that these employees would generally work at least fifty hours each work week and the limitations of the employer’s payroll department and software.

The employer’s method for calculating overtime for the newly non-exempt employees was as follows:

  1. Determine the actual hours worked by an employee for a given week.
  2. Calculate the equivalent of the employee’s weekly salary by dividing the bi-weekly salary by two.
  3. Divide that weekly salary by the number of hours worked in that week.
  4. Divide that resulting hourly rate equivalent by two in order to determine the hourly overtime premium.
  5. Multiply that overtime premium rate by the overtime hours worked in that week.

In all cases, the resulting hourly rate calculated exceeded the applicable minimum wage.

The Opinion Letter stated that the fact the payroll software displayed an hourly rate on the check did not mean that the employer was required to pay overtime based on that rate; therefore, the employer’s method of calculating overtime was in compliance 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.

February 10, 2009

US Department of Labor Issues Opinion Letter on College Assistant Athletic Instructors

The US Department of Labor recently issued Administrator signed Opinion Letter FLSA2008-11. 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 whether Assistant Athletic Instructors (AAIs) qualify as teachers exempt under the FLSA.

The facts are that AAIs “teach proper skills and skill development to student-athletes”; a bachelor’s degree is required although a master’s degree or equivalent experience is preferred. The AAIs spend more than half their time teaching “physical health, team concepts, and safety.” Although they work under a head coach, they also exercise considerable discretion and independent judgment.

The AAIs spend time on activities that don’t include teaching activities, “such as developing effective recruitment strategies, recruiting and following up on prospective students, researching and targeting high schools and athletic camps as sources for potential student-athletes, and visiting high schools and athletic camps to conduct student interviews.” Since they spend more than half their time on teaching activities, however, the non-teaching time is not determinative. Furthermore, the institutions of higher learning where the AAIs work would presumably qualify as educational establishments. Therefore, the AAIs would qualify as exempt from minimum wage and overtime requirements 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.

February 8, 2009

US Department of Labor Issues Opinion Letter on Uniforms Damaged in Non-Work-Related Activities

The US Department of Labor recently issued Administrator signed Opinion Letter FLSA2008-10. 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 whether employers must pay for replacement uniforms for employees who repeatedly damage uniforms in non-work-related activities.

A tipped employee who worked in a dining facility received $2.13 in cash wages and the employer claimed a tip credit so that the employee received at least the federal minimum wage. The employer requires the employee to wear a uniform that is provided by the employer at no cost to the employee. The employer provides an adequate number of uniforms to employees “relative to the nature of their work assignments and job duties.” The uniform does not require any special laundering.

One employee damaged several uniforms while riding a skateboard on days that he wasn’t working. The employer wanted to know if it must continuously replace such uniforms at no cost to the employee or if the employee could be charged for the uniforms. Employers may not charge directly or indirectly for uniforms required as a condition of employment if the charge would reduce the employee’s wages below the required minimum wage or overtime pay. The employer must also replace uniforms damaged at work using the same guidelines. Employers may charge, however, both for additional uniforms voluntarily purchased by any employee beyond the normal allotment and for uniforms damaged by the employee during personal use without violating 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.

December 2, 2008

US Department of Labor Issues Opinion Letter on Cosmetology School Instructors and the Professional Exemption

The US Department of Labor recently issued Administrator signed Opinion Letter FLSA2008-9. 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 whether instructors in a cosmetology school are teachers who qualify for the professional exemption of the FLSA.

The instructors in the instant case are licensed cosmetologists in addition to being licensed as instructors by their State Board of Cosmetology. The school is licensed by that board and accredited by the National Accrediting Commission of Cosmetology Arts and Sciences. This accreditation qualifies the school as an “educational establishment”. Although the instructors do not have teaching certificates, their primary duty is “teaching and instructing students in cosmetology theory, as well as in the practical part of the curriculum.” This means that the instructors are “teachers of skilled or semi-skilled trades and occupations.” Therefore, the instructors qualify under the professional exemption of 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.

November 18, 2008

US Department of Labor Issues Opinion Letter on Substitute Teachers and the Professional Exemption

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2008-7. 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 states that a substitute teacher may qualify for the Professional exemption of the FLSA if the substitute teacher’s primary duty is teaching. Generally, the Professional exemption requires a “knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.” Under the state law at issue, substitute teachers do not need a college degree or teaching certificate if they have a state-issued substitute teaching permit. The DOL concluded that it was not the degree requirements that qualified teachers as learned professionals; indeed the requirements vary widely by state and even school, with no standard minimum qualifications. Since discretion and judgment is required for teaching, substitute teachers whose primary duty is teaching qualify for the exemption. Conversely, substitute teachers whose primary duty is not related to teaching do not qualify for the exemption. 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.

November 17, 2008

US Department of Labor Issues Opinion Letter on Overtime, On-call Hours

The US Department of Labor recently issued Administrator signed Opinion Letter FLSA2008-6. 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 whether a city that employs workers in a Water Treatment Plant may include on-call compensation received in a two-week pay period with other pay received in a two-week pay period for purposes of computing the overtime rate of pay to be applied to that period. An employee is paid $2.50 per hour for on-call time that is not considered hours worked under the FLSA. The employee may work overtime during only one week of two-week period. The city proposed including the on-call compensation with all other compensation received in the two-week pay period and dividing by the number of hours worked in that pay period to arrive at a regular rate of pay. For example, an employee earns $10 per hour, works forty hours in the first week and forty-five hours in the second week of a two-week pay period and also receives $100 of on-call compensation. The city proposed paying overtime based on a regular rate of $11.18 per hour. (40 hours X $10/hour) + (45 hours X $10/hour) + $100 = $950 total compensation. $950/85 hours = $11.18 per hour regular rate of pay for overtime purposes. The overtime premium under this method would be $27.95 or $11.18/hour X 5 hours X0.5 premium. If a one-week pay period were used, a regular rate of $12.22 would be used for the overtime calculation (45 hours X $10/hour) + $100 = $550 total compensation and $550/45 hours = $12.22 per hour. The overtime premium under this method would be $30.55 or $12.22/hour X 5 hours X0.5 premium. The FLSA uses a standard of a single workweek for calculating the regular rate of pay and does not allow averaging over two weeks even if the employee’s pay period is normally two weeks. Since “the specific hours for which on-call pay was earned are identifiable, the payment for on-call time must be attributed to the workweek in which the on-call hours occurred.” Therefore, the city must use the latter method to calculate the employee’s regular rate of pay and may not use a two-week period. 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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