Early this year, the Department of Labor reissued 17 previously withdrawn opinion letters. The Obama Administration withdrew these letters in March 2009, for further consideration but never followed up. The Trump Administration has taken up the torch and reissued the old 2009 opinions.
While many of the opinion letters are industry specific, a few were generally applicable to all employers. The following focuses on the latter letters.
For example, FLSA 2018-14 discusses salary deductions under the salary basis rules. An employee is paid on a salary basis if he or she “regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.” 29 CFR § 541.602(a). Deductions may be made when the employee is absent from work for one or more full days for personal reasons, other than sickness or disability. Therefore, if the employer deducts for a full day absence, the salaried status is not affected. However, deductions for less than a full day absence are not permitted. For instance, if an employee only misses half a day, the employer cannot deduct for the half day absence. To address such absences, employers can require employees to miss the entire day and lose a day’s pay or work the half day and receive full pay.
FLSA 2018-11 discusses the calculation of bonuses into a regular rate of pay. In the opinion letter, the employer wanted to pay equipment operators a “job bonus” in addition to hourly wages. The job bonus would be paid each day worked and was not conditioned on any other factor. The DOL opined the job bonus had to be included in the regular rate because the regular rate includes “all remuneration for employment paid to, or on behalf of the employee.” 29 U.S.C. § 207(e).
While these two letters clarify the federal law on these issues, employers must remember many states have their own wage and hour laws which may be applicable. Therefore, employers should contact their legal counsel with any questions and to ensure full compliance.
Brody and Associates regularly advises management on complying with state and federal employment laws including wage and hour laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.
