Not sitting on its laurels, the U.S. Department of Labor (DOL) has already issued three new opinion letters to begin the year. Two deal with issues under the FLSA and a third addresses issues under the FMLA.
Opinion letter number one provides guidance as to the nature of the calculation of the regular rate of pay when an employee receives a lump sum bonus. The hypothetical given is that an employee is eligible for a $3,000 bonus if they finish a 10-week training program AND sign up for an additional eight weeks of training. In that example the lump sum bonus should be included in the recalculation of the regular rate of pay for purposes of determining the employee’s overtime equally over the 10 week training period only. The opinion letter also noted that the DOL would be updating its field operations handbook to “reflect that allocating bonuses equally to each week of the bonus period is the appropriate method for computing overtime on bonus earnings that cannot be identified with particular workweeks.” So the next time you find yourself scratching your head wondering when was the bonus earned, that answer may well be over a longer period than you might have originally thought.
Opinion letter number two addresses whether money paid to educational consultants qualifies as a fee payment or salary in determining whether they qualify as exempt from overtime and minimum wage for either administrative or professional employees. In this example the consultants met the duties standards for the exemptions so the inquiry centered on whether consultants paid on a project basis still qualified for the fee or salary basis test under the exemptions. The DOL opined that as long as the base project fee was a predetermined amount that would be paid and not vary week to week it met the salary basis test. Part two of the question asked if the employer added another project to the consultant’s workload and thus varied those weekly paychecks would it qualify as “extra” compensation under the regulations that the employer could pay without jeopardizing the exemption, and the DOL’s answer was yes it could still make these extra payments and preserve the exemption. While the DOL also clarified that an employer could change that payment as the project changed without impacting the exempt status, if those changes are happening too frequently it would suggest that the employee is being paid based upon the quantity or quality of the work performed and that scenario would put their exempt status in jeopardy.
Opinion letter number three let us all know that an Ohio combined general health district-which is a political subdivision of the state-does not have to count employees of the County in which the health district is located for purposes of determining FMLA eligibility for the health district’s employees. The DOL gave a series of tests by which one can determine-on a case by case basis-whether the two agencies should be considered the same agency. The DOL said they were not one and the same and the health district probably emitted a sigh of relief when they found out they didn’t have to include all those county employees in their calculations.