DOL Wage and Hour Opinions: Key Employer Takeways

The following article first appeared in the News & Insights section of Carmody Torrance Sandak Hennessey’s website. It is reposted here with permission.

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The U.S. Department of Labor Wage and Hour Division recently issued four opinion letters addressing recurring questions under the Fair Labor Standards Act.

The letters provide valuable insight into how the DOL interprets and intends to enforce the FLSA.

It is important to note, however, that these opinion letters do not override state laws that may provide greater protection for employees.

Exempt Employees Who Work in a Secondary Non-Exempt Role at an Hourly Rate

DOL confirmed that in certain circumstances an exempt employee may perform work in a separate, non-exempt position without automatically losing the exemption.

In the specific situation considered by the DOL, a hospital employed exempt nursing specialists and non-exempt hourly staff nurses.

Nurse specialists would often pick up shifts in the staff nurse role, typically on the weekend, working one or two 12-hour shifts in addition to their approximately 40 hours of work as a nurse specialist.

In certain circumstances an exempt employee may perform work in a separate, non-exempt position.

DOL assumed that the duties of the nurse specialist role constituted exempt work.

Based on this assumption and weighing the amount of exempt versus non-exempt work performed, DOL concluded that the “primary duty” requirement was met because a substantial majority of the employee’s time was spent performing the exempt work of a nurse specialist.

DOL also concluded that the salary basis test was met because nurse specialists were paid a salary for all work performed in that role, regardless of hours worked, and the payment of additional compensation on an hourly rate basis did not violate the salary basis requirement.

Certain Bonuses Do Not Require Overtime Recalculations

DOL issued an opinion letter concluding that a quarterly bonus paid to a non-exempt employee that is calculated by comparing the employee’s total straight-time and overtime earnings to the total straight-time and overtime earnings of all employees eligible for the bonus is a “percentage of total earnings” bonus that provides for the simultaneous payment of any overtime compensation due on the bonus, thus satisfying the FLSA’s overtime pay requirement.

As a result, employers are not required to perform a separate retroactive overtime calculation after paying the bonus.

Many other bonuses remain subject to the FLSA’s regular-rate requirements.

This opinion letter only applies to a specific bonus formula that is considered a “percentage of total earning bonus” under federal FLSA regulations.

Many other bonuses remain subject to the FLSA’s regular-rate requirements, which involves computing the employee’s regular rate for each workweek in which the bonus was earned to determine any additional overtime due.

Meal Periods Remain Unpaid Despite Significant Time Required to Leave Premises

An employer provided employees with an unpaid 30-minute meal period during which time employees had the option to remain on the premises or leave the premises.

The employer was situated on a large corporate campus with controlled access points. Therefore, it took employees five to 10 minutes to walk from their job site to the parking lot, and a similar amount of time to return.

DOL addressed whether employees must be compensated for time spent walking across an employer’s premises during an otherwise bona fide meal period.

The agency concluded that such travel does not necessarily convert the meal period into compensable work time provided employees remain completely relieved from duty and all work responsibilities.

Pre-Shift Activities and Rounding

The DOL reviewed certain pre-shift activities that hospital employees performed including locating work assignments, completing accountability documentation, assigning employees to work locations via communication devices, and receiving handoff reports from colleagues.

DOL concluded that at least some of these activities appeared to be integral and indispensable to the employee’s job duties and, therefore, compensable.

Time spent waiting in line to clock in or out before the first principal activity and after the last principal activity is not compensable.

However, time spent waiting in line to clock in or out before the first principal activity and after the last principal activity is not compensable because it is not integral and indispensable to the employee’s job duties.

DOL cautioned employers about relying on the de minimus exception given technological advances that have made it possible for employers to track employees’ work time with increasing precision, and where employees perform off the clock work with some regularity.

DOL also noted that an employer’s rounding policy permitting early clock ins while prohibiting early clock-outs was not neutral and could result in minimum wage and overtime violations.

Employer Action Items

Employers should regularly review their exempt classifications, bonus plans, meal-break practices, and timekeeping procedures to ensure compliance with the FLSA and state law.

Wage and hour litigation continues to be one of the most active areas of employment law.

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About the author: Nick Zaino is a partner at Carmody and co-leader of the firm’s Corporate & Business Group.