DOL issues guidance on breaks, travel time, and earnings subject to garnishments

published in McAfee & Taft EmployerLINC Alert | April 17, 2018

By Kristin Simpsen

For more than 70 years, the U.S. Department of Labor’s Wage and Hour Division provided employers and attorneys with a valuable resource for determining how to comply with the federal laws and regulations the agency enforces. These opinion letters, which serve as an official statement on DOL policy, not only discuss how a specific law applies to a certain set of facts presented by the requestor, but they can also be relied upon as a good faith defense to wage claims arising under the Fair Labor Standards Act. Moreover, they can be relied upon as official guidance for other employers subject to the FLSA and Family and Medical Leave Act.

This practice of issuing opinion letters ceased in 2010, but last summer, U.S. Secretary of Labor Alexander Acosta announced that the DOL would resume this long-standing practice. On January 5, 2018, the DOL issued more than a dozen opinion letters. Last week, additional letters were issued.

Breaks as an employee accommodation

The first opinion letter discussed whether breaks given to accommodate an employee’s serious, FMLA-certified health condition needed to be paid. In general, employers are required to pay for breaks that are 20 minutes or less. The logic behind this is that short breaks are typically for the benefit of the employer. However, when the employee requires a break for their own serious health condition (as certified by a doctor and qualifying for intermittent FMLA leave), the break is for the employee’s benefit and does not need to be paid. Thus, where an employee needed one 15-minute break per hour of work, those breaks would not need to be paid. Employers should be aware that employees receiving unpaid FMLA-protected breaks still must receive as many paid rest breaks as coworkers who do not need any accommodation.

Non-commuting travel time

The second opinion letter discussed the compensability of travel time for non-exempt employees. The opinion letter reinforced the DOL’s rules concerning when travel is and is not compensable under the FSLA. As has always been the case, employees’ time spent commuting from their home (or hotel in the event of an employee who is traveling for work) is not compensable as time worked. However, when employees travel for work (outside regular commuting to or from the office or directly from home to a customer’s place of business), they are entitled to be compensated for all time spent in travel during normal hours of work. The April 12 letter answers the vexing question about what is considered normal work hours for employees with irregular schedules. The letter provides two options for employers in determining normal working hours: (1) employers may review the employee’s most recent monthly time records to determine if a pattern exists sufficient to establish regular working hours; or (2) employers may negotiate with the employee and come to an agreement about what comprises the regular work day.

Earnings subject to garnishment

The third opinion letter discussed whether certain lump payments were considered earnings under the Consumer Credit Protection Act (CCPA). Title III of the CCPA limits the amount of an individual’s disposable earnings that may be garnished. The DOL provided analysis on 18 different types of lump sum payments and discussed whether they qualified as earnings. Earnings under the CCPA can include payments received in a lump sum when the payment is made for services provided by the employee. The DOL found that commissions, discretionary and nondiscretionary bonuses, productivity or performance bonuses, profit sharing, referral or sign-on bonuses, moving or relocation incentive payments, attendance awards, safety awards, cash service awards, retroactive merit increases, payment for working during a holiday, termination pay, and severance pay would qualify as earnings under the CCPA. The DOL also found that certain portions of workers’ compensation payments and insurance settlements could qualify as earnings but other portions, such as reimbursement for medical expenses, would not qualify as earnings. Finally, the DOL determined that the buyback of company shares does not qualify as earnings.

White collar exemptions in higher education

Finally, Fact Sheet 17(s): Higher Education Institutions and Overtime Pay Under the Fair Labor Standards Act identifies several positions that qualify for white collar exemptions in higher education institutions. Specifically, the following positions are identified as typically exempt under the FLSA: (a) part-time teachers; (b) teachers who teach online or remotely; (c) teachers who spend a “considerable amount of time” in extracurricular activities (such as supervising student clubs); and (d) athletic coaches (so long as the majority of the coach’s time is not spent recruiting). The following positions were determined to be exempt under the “learned professional exemption:” (a) public accountants; (b) psychologists; (c) certified athletic trainers; (d) librarians; and (e) post-doctoral fellows. The fact sheet identified several positions exempt under the administrative exemption: (a) admissions counselors; (b) student financial aid officers; (c) department heads; (d) intervention specialists; and (e) academic counselors. Additionally, higher education institutions can apply the executive exemption to deans, department heads, directors, and other similar employees. Finally, the fact sheet discussed student employees and found that while graduate teaching assistants qualified for the teacher exemption, research assistants and student residential assistants are typically not considered employees under the FLSA.

Final thoughts

None of these fact sheets or opinion letters altered any existing law. However, it is significant that the DOL has made the decision to move forward with issuing new guidance even though Cheryl Stanton, President Trump’s nominee to head the Wage & Hour Division of the DOL, has not been confirmed by the Senate. The continued issuance of additional opinion letters can provide employers with guidance in how to comply with the FLSA.