On January 7, 2020, the U.S. Department of Labor (Department) issued a trio of new opinion letters concerning issues related to the Fair Labor Standards Act(FLSA) and Family and Medical Leave Act (FMLA). These letters include:
FLSA 2020-1: This letter clarified one circumstance in which an employer is allowed to allocate a lump sum bonus across several work weeks when calculating overtime. Here, the employer proposed to pay employees a lump sum bonus for completing ten weeks of training and for agreeing to complete an additional eight-week training course. Though employees were required to complete the ten-week training, they were paid the bonus regardless of whether they completed the additional eight-week course. The Department Administrator clarified that, under these circumstances, it was “appropriate” for the employer to allocate the bonus equally to each of the ten weeks of training for the purpose of calculating overtime.
FMLA2020-2: In this letter, the Department Administrator provided additional clarification of pay arrangements that may satisfy the salary basis test for exempt Administrative, Executive, and Professional employees. Here, the employer proposed paying exempt educational consultants a set amount per project, which it would then disperse in equal installments over the project’s duration. The Department Administrator held that such an arrangement would pass the salary basis test, so long as the employer paid at least a minimum salary per of $684 per week over the course of the project regardless of the quality or quantity of the consultants’ work.
FMLA2020-1-A: This letter discussed when a public health district might be considered an independent employer from the county government in which it is located, a consideration very important for the purpose of determining whether the district employed enough workers to trigger its obligation to provide FMLA leave. Here, the Department Administrator determined that several factors suggested the health district was a separate entity from the county government to which it was connected, including 1) The law of the state in which the district was located considered it distinct from the county, 2) The health district could sue and be sued, enter into contracts, and own property independently of the county, 3) The district managed its own budget and did not rely on funds by the county, and 4) The district made its own hiring, firing, and supervisory decisions independent of the county.
Note that Department of Labor Opinion Letters, while illustrative, are primarily intended as guidance documents. Before adjusting your practices, please contact your friendly attorneys at Employers Council.