Wyatt Employment Law Report


Payments and Perks: the DOL Announces a Proposal to Clarify What Qualifies as Overtime

By Marianna Michael

On Thursday, March 28, 2019, the U.S. Department of Labor (“DOL”) announced proposed changes to the overtime provisions of section 7(e) of the Fair Labor Standards Act.  In its current form, the statute generally requires employers to pay overtime if workers work more than 40 hours a week.  One exemption to the overtime rule includes the salary basis exemption, where employees generally must be paid at least $455 per week on a salary basis, unless they are outside sales employees, teachers and employees practicing law or medicine.

accounting-blur-budget-128867Overtime pay is equal to one and one half times the regular rate of pay.  In designating what is included under the regular rate of pay, the current provision makes a distinction between payments and perks.  With the proposed provision, the DOL seeks to clarify what qualifies as either a payment or perk in an attempt to discourage employers from offering incentives that are excluded from the calculation of overtime pay.

The proposed changes confirm that the following types of employer-provided benefits may be excluded from the regular rate of pay:

  • the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes and employee discounts on retail goods and services;
  • payments for unused paid leave, including paid sick leave;
  • reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
  • reimbursed travel expenses that do not exceed the maximum travel reimbursement permitted under the Federal Travel Regulation System regulations and that satisfy other regulatory requirements;
  • discretionary bonuses;
  • benefit plans, including accident, unemployment and legal services; and
  • tuition programs, such as reimbursement programs or repayment of educational debt.

This proposal is published for public comments and will remain open until May 28, 2019.  Comments may be submitted to the Notice of Proposed Rulemaking at www.regulations.gov. More information is available here.


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House Passes Bill to Delay Overtime Rule

By Michelle High

On Wednesday, September 28, 2016, the U.S. House of Representatives voted 246-177 to delay the implementation of the Department of Labor’s new rule which raises the salary level for exemption from overtime pay from an existing threshold of $455 per week to $913 per week. The new rule is currently scheduled to go into effect on December 1, 2016.  Numerous business groups, including the U.S. Chamber of Commerce, have filed a lawsuit against the U.S. Department of Labor opposing the significant increase.  In addition, a lawsuit challenging the new rule has been filed against the U.S. Department of Labor by twenty-one (21) states.

House Resolution 6094, introduced by Republican representative Tim Walberg, seeks to delay implementation of the U.S. Department of Labor’s Overtime Rule for an additional six (6) months.  According to statements made by Walberg, he and others agree that the country’s overtime rules need to be updated.  However, he believes that lawmakers need to Continue reading


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Overtime Pay in Higher Education – Guidance from the DOL

By Leila G. O’Carra

A diverse group of young adult graduates

On the same day that the U.S. Department of Labor (DOL) announced its Final Rule revising the salary requirements for the “white collar” exemptions from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements,1 it released supplemental guidance for non-profits, state and local governments, and institutions of higher education.

Colleges and universities are unique employers because of the number and variety of workers on campus.  The DOL opines that the final rule may not impact many of the workers employed by academic institutions because special exemptions for educators and academic administrators are not affected by the new rule.

First, the salary level and salary basis tests for the white collar exemptions do not apply to teachers whose primary duty is Continue reading


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Proposed Revisions Pertaining to Federal Overtime Regulations

By Chelsea K. Painter

On Tuesday, June 30, 2015, in an attempt to “modernize and streamline” the regulations on exemptions from the Fair Labor Standards Act’s (“FLSA”) minimum wage and overtime pay requirements, the U.S. Department of Labor issued a Notice of Proposed Rulemaking (“NPRM)” dollar billwhich focuses primarily on increasing federal overtime pay regulatory coverage to nearly 5 million people by raising the minimum salary threshold required to qualify for the FLSA’s “white collar” exemption. Specifically, the Department proposes to:

  1. Set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers ($970 a week; or $50,440 a year) in 2016;
  2. Increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
  3. Establish a mechanism for automatically updating the salary and compensation levels going forward so as to ensure a useful and effective test for exemption.

 

The Department’s regulations have generally required each of the following three tests to be met for the white collar exemptions to apply: 1) the employee must be paid a predetermined, fixed salary that is not subject to Continue reading


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Sixth Circuit Holds that Casino Security Guards Will Not Receive Overtime for Monitoring Radios During Lunch Breaks

By Amanda Warford Edge

On Wednesday, January 7, 2015, the Sixth Circuit issued a published opinion in Ruffin v. MotorCity Casino, affirming the district court’s decision that security guards at MotorCity Casino were not entitled to overtime payments under the Fair Labor Standards Act, 29 U.S.C. 207(a). In doing so, the Sixth Circuit held that the guards’ meal breaks were not compensable under the FLSA, even though MotorCity required them to stay on casino property, monitor their two-way radios, and respond in case of an emergency. Although the proposition that compensable work requires more than simple radio monitoring is not novel, the Sixth Circuit’s rationale—as well as the standards set forth in the opinion—are nonetheless important for employers and employees alike.

The security guards filed suit against MotorCity in 2012, claiming that they were entitled to overtime pay because MotorCity required them to “work” during their paid lunch breaks. OLYMPUS DIGITAL CAMERAAccording to the guards, who were regularly scheduled to work weekly 40-hour shifts, mandatory 15-minute meetings prior to each shift were compensable, entitling them to overtime pay on the additional 1.25 hours under the FLSA. The crux of this claim was that the guards’ 30-minute paid meal breaks actually constituted “work” since MotorCity restricted their actions during the breaks. The guards highlighted that during their meal breaks, they could not leave casino property, have food delivered to the casino, or receive visitors. Further, they were required to Continue reading


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White House Seeking Expansion of Overtime Pay Under the FLSA

By Mitzi D. Wyrick

President Obama has directed the U.S. Department of Labor (“DOL”) to revise regulations under the Fair Labor Standards Act to make more workers eligible for overtime pay.  Specifically, the DOL will be reviewing the executive, professional, and administrative exemptions, sometimes referred to as the “white-collar” exemptions from the requirement to pay overtime for hours worked over 40 in a workweek.  The salary basis threshold, which is currently set at $455 per week, will be one area of focus.  In addition, the White House has directed the DOL to review other exemptions changes to which would result in more overtime pay based on the type of work performed.  For example, under the revised regulations thought to being considered, store managers who also perform non-management duties may be entitled to overtime pay unless they can demonstrate that the majority of their time is spent performing management work.  Read more about it at:  http://t.co/KgEmpdqfZT


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House Passes Comp Time Law

 By Edwin S. Hopson

On May 8, 2013, the U.S. House of Representatives passed the Working Families Flexibility Act of 2013 (H.R. 1406), a law that would amend the Fair Labor Standards Act of 1938 to give employees the opportunity to accrue paid time off or “comp time” for working overtime hours in lieu of receiving overtime pay.

The bill provides as follows:

  • Allows employers to offer employees a choice between cash wages and accruing comp time for overtime hours worked during a workweek.
  • Protects employees by requiring the employer and the employee to complete a written agreement to use comp time, entered into knowingly and voluntarily by the employee. If the employee is represented by a labor organization, the agreement to take comp time must be negotiated as part of the union contract.
  • Retains all existing employee protections in current law, including how overtime pay is calculated.
  • Allows employees to accrue up to 160 hours of comp time each year.  An employer would be required to pay cash wages for any unused time at the end of the year. Workers would be free to cash out their accrued comp time whenever they choose to do so.
  • Requires the nonpartisan Government Accountability Office to report to Congress on the extent private-sector employers and employees are using comp time, and the number of complaints filed with and enforcement actions taken by the U.S. Department of Labor.

 The measure is expected to face stiff opposition in the Senate.