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A Window into the DOL Wage and Hour Division: Opinion Letters Shed Light

On Behalf of | Jan 17, 2018 |

The U.S. Department of Labor Wage and Hour Division (“WHD”) is responsible for providing guidance regarding wage and hour questions that arise under the Fair Labor Standards Act (“FLSA”). Historically, the WHD has used Opinion Letters as a vehicle to provide guidance on matters such as employee classification, which can be a valuable resource for employers in complying with the requirements of the FLSA.

Proper employee classification is critical because errors can lead to claims asserted by employees for unpaid wages, penalties, benefits, and counsel fees. Employers also face exposure when they fail to properly track time that employees worked. However, employers need not pay employees for time that is not compensable under the FLSA.

In January 2009, the WHD issued 17 Opinion Letters addressing issues such as employee classification and the tracking of time spent working. These Opinion Letters were all issued during the final days of the Bush administration. On March 2, 2009, the WHD withdrew these Opinion Letters “for further consideration” and stated that it would “provide a further response in the near future.” No further action was taken on these letters during the Obama administration. Subsequently, on January 5, 2018, the WHD reissued all 17 Opinion Letters. What is clear is that interpretations of laws and regulations change with each administration.

One of the Opinion Letters addressed when, and under what circumstances, “on call” time is compensable. This issue requires a fact intensive analysis of whether the employee is “prevented from effectively using the time to engage in personal pursuits.” The WHD found that an individual is not considered to be working if there is sufficient ability for that individual to enjoy private pursuits while “on call.” Employers should not conclude that this means that all employees do not need to be paid when they are “on call.” In certain circumstances, employers can set expectations so that it is not necessary to compensate employees who are “on call.”

Several Opinion Letters shed light into how the WHD analyzes the application of the executive, professional, and administrative capacity exemptions. Section 13(a)(1) of the FLSA provides a minimum wage and overtime pay exemption for any employee who is employed in a bona fide executive, administrative or professional capacity. The line between who is and who is not exempt is not always clear. This can also change when an employee’s responsibilities change. The Opinion Letters indicate that the focus is on the work actually performed by the employee and not so much on his or her title. The insight that can be gained from the WHD through its Opinion Letters as to how the current administration treats these exemptions can be quite valuable.

An interesting issue addressed by the WHD concerns whether a high school coach is exempt from overtime. In an Opinion Letter, the WHD reasoned that a coach is exempt from overtime if his primary duty is imparting knowledge to students in an educational establishment. The focus is on whether the coach spends the predominant amount of his time coaching teams as opposed to performing administrative functions. If so, he is exempt from overtime. The same conclusion is reached regardless of whether the coach holds a teaching certificate or has a college degree, as the analysis focuses on what the coach does, and not on his or her academic background.

Employer Takeaway. It is clear that the WHD focuses on what work employees are actually doing. Accordingly, employers should resolve questions of employee classification by focusing on an employee’s actual function and not on their title, job descriptions or education. It is also important for employers to keep current with the WHD’s interpretation of the employer-employee relationship under the FLSA. By taking time to review the Opinion Letters, employers can help ensure that their practices are compliant with the FLSA, and it will have the added benefit of assisting employers in ensuring that they do not overpay employees.