Wage and Hour Policies

On July 26, 2018, the California Supreme Court issued its long-awaited opinion in Troester v. Starbucks Corporation, ostensibly clarifying the application of the widely adopted de minimis doctrine to California’s wage-hour laws. But while the Court rejected the application of the de minimis rule under the facts presented to it, the Court did not reject the doctrine outright. Instead, it left many questions unanswered.

And even while it rejected the application of the rule under the facts presented, it did not address a much larger question – whether the highly individualized issues regarding small increments of time allegedly worked “off the clock” could justify certification of a class on those claims.

For more than 70 years, federal courts have regularly applied the de minimis doctrine in certain “circumstances to excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.” Those courts have concluded that as much as 15 minutes per day could be considered de minimis and, therefore, noncompensable.

In Troester, the California Supreme Court concluded that most of California’s wage and hour laws have not in fact adopted the de minimis doctrine found in the federal Fair Labor Standards Act (“FLSA”). However, the Court did not go so far as to reject the application in all instances. Indeed, the Court specifically declined to “decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.” (Emphasis added.)

The key words in that sentence appear to be “minute” and “irregular.”

The Court declined to do so “given the wide range of scenarios in which this issue arises,” proffering what appear to be examples where the de minimis rule could apply – e.g., “paperwork involving a minute or less of an employee’s time” or “an employee reading an e-mail notification of a shift change during off-work hours.”

Under the facts presented to it, where the employer allegedly required employees to “work ‘off the clock’ several minutes per shift,” the Court found that the relevant statute and regulations did not permit application of the de minimis rule.

Specifically, it apparently was undisputed that the plaintiff “had various duties related to closing the store after he clocked out, and the parties [had] agree[d] for purposes of [the California Supreme Court] resolving the issue . . . that the time spent on these duties is compensable.” It also apparently was undisputed that these tasks took the plaintiff as few as 4 minutes and as much as 10 minutes each shift that he worked. Given those specific facts, the Court found that the de minimis rule would not be applicable, holding that, under California law generally, an “employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine.” (Emphasis added.)

Consistent with prior language in the opinion, the key words in that conclusion appear to be “minutes” and “regular.”

In other words, while significant, regular time would not be de minimis, insignificant and irregular time could be.

And how that issue could be addressed on a classwide basis seems questionable, at best, given that the very nature of “off the clock” work is that there are no records of it. Individualized inquiries apparently would need to be conducted person-by-person, day-by-day, to determine if an individual in fact worked “minutes” off-the-clock on a “regular” basis.

Not unimportantly, in addition to the Court’s majority opinion, Justices Mariano-Florentino Cuéllar and Leondra Kruger wrote separate concurring opinions, each offering some additional support for employers.

Justice Cuéllar noted that while the Court’s majority opinion “protects workers from being denied compensation for minutes they regularly spend on work-related tasks,” it “does not consign employers or their workers to measure every last morsel of employees’ time.”

Justice Kruger also offered some examples where she opined that the de minimis rule could apply:

  • An employer requires workers to turn on their computers and log in to an application in order to start their shifts. Ordinarily this process takes employees no more than a minute (and often far less, depending on the employee’s typing speed), but on rare and unpredictable occasions a software glitch delays workers’ log-ins for as long as two to three minutes.
  • An employer ordinarily distributes work schedules and schedule changes during working hours at the place of employment. But occasionally employees are notified of schedule changes by e-mail or text message during their off hours and are expected to read and acknowledge the messages.
  • After their shifts have ended, employees in a retail store sometimes remain in the store for several minutes waiting for transportation. On occasion, a customer will ask a waiting employee a question, not realizing the employee is off duty. The employee – with the employer’s knowledge – spends a minute or two helping the customer.

Justice Kruger wrote that “a requirement that the employer accurately account for every second spent on work tasks may well be impractical and unreasonable” in the situations above.

Following Troester, entities doing business in California will want to review their practices and their timekeeping systems.

And while Troester certainly suggests that employers in California will face an increased number of class actions alleging that certain insignificant amounts of time should have been compensated, plaintiffs’ difficulty in actually getting classes certified on such claims appears relatively unchanged.

Our colleagues , Eric I. Emanuelson, Jr. at Epstein Becker Green have a post on the Retail Labor and Employment Law blog that will be of interest to our readers: “Massachusetts “Grand Bargain” Makes Changes to Blue Laws for Retailers.”

Following is an excerpt:

A legislative bargain requires give-and-take from all stakeholders. On June 28, 2018, Massachusetts Governor Baker signed House Bill 4640, “An Act Relative to Minimum Wage, Paid Family Medical Leave, and the Sales Tax Holiday” (the “Act”). This “grand bargain” gradually raises the minimum wage, provides for paid family and medical leave, makes permanent the Commonwealth’s annual tax holiday, and phases out Sunday and holiday premium pay requirements. While Massachusetts employers must now adjust to an increased minimum wage and new paid family medical leave program, retailers with eight or more employees may see those costs mitigated by the gradual elimination of Sunday and holiday premium pay mandates. …

Read the full post here.

*Eric I. Emanuelson, Jr., is a 2018 Summer Associate at Epstein Becker Green.

Last Friday, the Department of Labor (“DOL”) issued Field Assistance Bulletin No. 2018-4 to help guide the DOL Wage and Hour Division field staff as to the correct classification of home care, nurse, or caregiver registries under the Fair Labor Standards Act (“FLSA”). This is the most recent piece of guidance on a topic first addressed by the DOL in a 1975 Opinion Letter. The bulletin is noteworthy in two respects. First, it confirms that the DOL continues to view a registry that simply refers caregivers to clients but controls no terms or conditions of the caregiver’s employment activities as outside the purview of the FLSA. Second, and most helpfully, the bulletin provides specific examples of common registry business practices that may establish the existence of an employment relationship under the FLSA.

The following chart summarizes the DOL’s position on a number of common registry business practices, with the caveat that no one factor is dispositive to determining whether a registry is an employer of a caregiver under the FLSA.

Indicative of Employment Relationship Not Indicative of Employment Relationship
Background

Checks

Interviewing the prospective caregiver or the caregiver’s references to evaluate subjective criteria of interest to the registry Performing basic background checks of caregivers (e.g., collecting the caregiver’s criminal history, credit report, licensing, and other credentials)
Hiring and Firing Controlling hiring and firing decisions by, e.g., interviewing or selecting the caregiver or firing the caregiver for failing to meet the standards of the registry or industry Inability to hire or fire employees
Scheduling/

Assigning Work

Scheduling and assigning work to specific caregivers (i.e., a subset of qualified caregivers) based on the registry’s own discretion and judgment rather than the client’s Providing client access to vetted caregivers who meet client’s stated criteria; requesting all qualified caregivers contact a particular client if they are interested in working for the client
Scope of Caregiver’s Work Controlling the caregiver’s services/behavior, including but not limited to restricting a caregiver’s ability to work with other referral services or work directly with clients outside the registry Seeking information concerning the type of care needed by the client for matching purposes
Caregiver’s Pay Rate Receiving fees from a client on an on-going basis based on the numbers of hours that a caregiver works for the client or some other arrangement Receiving a one-time referral fee
Fees for Caregiver Services Directly setting the caregiver’s pay rate Communicating general market/typical pay rates or relaying offers/counteroffers to the client
Caregiver Wages Paying the caregiver directly Performing payroll services, provided that the client provides funds directly or via an escrow account
Tracking of Caregiver Hours Actively creating and verifying time records Performing payroll services after client/caregiver submits time records
Caregiver Equipment/

Supplies

Investing in equipment or supplies for a caregiver or the caregiver’s training or licenses Investing in office space, payroll software, timekeeping systems, and other products to operate a registry business; providing caregivers the option to purchase discounted equipment or supplies from either the registry or a third party
Receipt of EINs or 1099s N/A Requiring an Employment Identification Number or issuing a caregiver an IRS 1099 form

The issuance of this field assistance bulletin indicates a commitment by the DOL to clarify the employment relationship between caregivers and home care, nurse, or caregiver registries, which is a positive development from the perspective of the registries. However, registries should promptly review their business practices, as the Wage and Hour Division, now armed with this guidance, may be more inclined to fight misclassification in this industry.

In our June 28, 2018 post on District of Columbia voters approving Initiative 77, which would incrementally increase the minimum cash wage for tipped workers to $15.00 per hour by July 1, 2025, and effectively eliminate the tip credit staring July 1, 2026, we noted the possibility of action by the D.C. Council to amend or overturn it. Consistent with the opposition to the initiative previously expressed by a majority of the Council, on July 9, 2018, a seven-member majority of the Council introduced a bill (Tipped Wage Workers Fairness Amendment Act of 2018) to repeal Initiative 77. As the Council is now on a two-month summer recess, no further formal action will occur until the fall. Furthermore, considerable publicly expressed opposition to repealing a voter-approved initiative may lead to a compromise that extends the phase-in period or otherwise modifies the terms of the initiative, rather than a complete repeal. Meanwhile, two federal Congressmen have sponsored a budget rider barring spending funds to implement the initiative, although such efforts often fail. In short, it appears the future effectiveness of the initiative will remain in doubt for some time.

Voters in the District of Columbia on June 19, 2018 approved an initiative (Initiative 77) that would incrementally increase the minimum cash wage for tipped workers to $15.00 per hour by July 1, 2025, and starting July 1, 2026 to the same amount as the then-minimum wage for all other workers, effectively eliminating the tip credit. If the initiative takes effect, the District would join seven states that do not have a separate minimum wage for tipped workers, i.e., Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington.

The D.C. Council previously enacted legislation raising the minimum cash wage for tipped workers to $3.33 on July 1, 2017; $3.89 on July 1, 2018; $4.45 on July 1, 2019; and $5.00 on July 1, 2020, consistent with increases in the general minimum wage to $12.50, $13.25, $14.00, and $15.00 that will take effect on the same dates. Each year thereafter, the minimum wage will increase in proportion to the annual average increase in the CPI-U for the Washington area. D.C. Code §32-10003.

The voter initiative would change the minimum cash wage for tipped workers to $4.50 on July 1, 2018; $6.00 on July 1, 2019; $7.50 on July 1, 2020; $9.00 on July 1, 2021; $10.50 on July 1, 2022; $12.00 on July 1, 2023; $13.50 on July 1, 2024; $15.00 on July 1, 2025; and to whatever the minimum wage then is for other workers on July 1, 2026. These provisions will not apply to employees of the District of Columbia, or employees performing services under contracts with the District of Columbia.

It is not yet clear whether the initiative will become law, at least it its present form. It passed by only 55 percent in an election in which turnout was only 16.7 percent. Before it becomes law, it must clear review by the D.C. Council, which could amend or overturn it. So far, the measure has faced public opposition from Mayor Muriel Bowser and a majority (eight) of the D.C. Council, as well as many restaurant owners, wait staff and bartenders, who fear it will increase direct labor costs, force staffing reductions, and significantly reduce the amount of tips received. Both the Restaurant Association of Metropolitan Washington and the separate “Save our Tips” campaign already have stated that they will take their fight to the Council. If the Council approves the measure, it must then clear a thirty-legislative-day review period by the Congress. At best, the initiative is not likely to take effect until sometime in the fall of 2018.

In the meantime, employers currently taking the tip credit should note the increase in the minimum for tipped employees to $3.89 (and for all other employees to $13.25) taking effect on July 1, 2018. Notably, supporters of the initiative have stated that they will not seek retroactive effect of the initiative’s July 1, 2018 increase to $4.50.

[Read the update—July 16, 2018—“Proposed D.C. Council Legislation Puts Voter-Approved Elimination of Tip Credit Into Question.”]

In most wage and hour cases, each workweek gives rise to a separate claim, at least for statute of limitations purposes. Thus, an employee seeking payment for alleged off-the-clock work or an independent contractor claiming misclassification and entitlement to overtime ordinarily may seek back wages and related recovery only for work performed within a set amount of time—usually two to six years preceding the filing of the complaint, depending on the jurisdiction—preceding the filing of the complaint. But what happens to the statute of limitations when a plaintiff tries to bring a class action under state law, the court denies class certification, and a new plaintiff seeks to bring a subsequent class action presenting the same claims?

On June 11, 2018, the Supreme Court provided the answer in China Agritech, Inc. v. Resh. In short, the Court held that although a class action suspends the running of the limitations period for individual potential class members who subsequently seek to join a suit or to file their own individual case, the class action does not permit the filing of subsequent time-barred class actions.

American Pipe Tolling

The Supreme Court first addressed the interplay of class actions and statutes of limitations more than four decades ago. In American Pipe & Construction Co. v. Utah, the Court concluded that a timely-filed complaint seeking relief on behalf of a class under Rule 23 of the Federal Rules of Civil Procedure suspends the running of the statute of limitations for potential class members, and that, upon the denial of class certification, members of the unsuccessful class may intervene in the original case without erosion of their claims to the statute of limitations. 414 U.S. 538, 544, 552-53 (1974).

Nine years later, the Court concluded that so-called American Pipe tolling applies not only when members of the pleaded class intervene in the original suit, but also when they file their own individual cases. Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 350, 353-54 (1983). An open question following American Pipe and Crown, Cork is whether these tolling principles also apply to subsequent class actions.

The Supreme Court’s Ruling

In China Agritech, a company’s stock price dropped following public disclosure of allegedly fraudulent conduct by the company. Claims accrued on February 3, 2011, and on February 11, 2011, a plaintiff filed a putative class action under the Securities Exchange Act of 1934, which provides for a two-year statute of limitations. The court denied class certification in May of 2012, and the original case settled in September 2012, leading to dismissal.

The following month, the same counsel filed a second putative class action against the company alleging the same claims on behalf of a new named plaintiff. The court again denied class certification, leading to another settlement and dismissal.

On June 30, 2014—more than two years after the February 3, 2011 accrual of the claims—yet another plaintiff, represented by new counsel, commenced a third putative class action, which made its way to the Supreme Court. The district court dismissed the complaint as untimely, holding that the first two class complaints did not toll the time to bring further class claims. The U.S. Court of Appeals for the Ninth Circuit reversed.

The Supreme Court granted certiorari to resolve a three-way split among the federal appellate courts on the tolling issue. The Court framed the question presented as follows: “Upon denial of class certification, may a putative class member, in lieu of promptly joining an existing suit or promptly filing an individual action, commence a class action anew beyond the time allowed by the applicable statute of limitations?” (Slip Op. at 2.) Justice Ginsburg’s answer, in a decision joined by seven other justices, was that “American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.” (Id.)

The Court noted that the reason for American Pipe tolling for individual claims is that “economy of litigation favors delaying those claims until after a class-certification denial. If class certification is granted, the claims will proceed as a class and there would be no need for the assertion of any claim individually.” (Slip Op. at 6.) If a court denies class certification, “only then would it be necessary to pursue claims individually.” (Id.)

But when a case involves class claims, “efficiency favors early assertion of competing class representative claims. If class treatment is appropriate, and all would-be representatives have come forward, the district court can select the best plaintiff with knowledge of the full array of potential class representatives and class counsel.” (Slip Op. at 7.) In cases in which “the class mechanism is not a viable option for the claims, the decision denying certification will be made at the outset of the case, litigated once for all would-be class representatives.” (Id.)

The Court cautioned that the plaintiffs’ “proposed reading would allow the statute of limitations to be extended time and again; as each class is denied certification, a new named plaintiff could file a class complaint that resuscitates the litigation.” (Slip Op. at 10.) The Court observed that although “[t]he Federal Rules [of Civil Procedure] provide a range of options to aid courts” in managing complex litigation, “[w]hat the Rules do not offer is a reason to permit plaintiffs to exhume failed class actions by filing new, untimely class actions.” (Id. at 14-15.)

The Concurrence

Concurring in the judgment only, Justice Sotomayor took issue with the Court’s holding as applied to cases outside the securities context. She addressed several differences between the procedures required by the Private Securities Litigation Reform Act, including publication of notice of the filing of a putative securities class action, designed to encourage active participation early in the case by other potential lead plaintiffs and counsel, not required for other class actions under Rule 23. (Concurrence at 2-4.) Justice Sotomayor agreed with the denial of tolling in the case before the Court, but she would have limited the ruling to cases subject to these additional procedural requirements and would not have issued a decision applicable to all Rule 23 cases. (Id. at 1, 7.)

What the Decision Means for Employers

In light of China Agritech, employers should expect courts to reject the use of American Pipe tolling to allow plaintiffs in wage and hour putative class actions to seek relief for workweeks that are outside the applicable limitations period. Courts will likely continue to allow individual claims for those otherwise time-barred workweeks when supported by American Pipe tolling. In addition, courts may continue to allow subsequent class actions by members of previously denied classes, but without the benefit of tolling. As always, employers faced with a wage and hour putative class action should carefully consider all available defenses, including the statute of limitations as to individual and class claims.

More than 7 months after hearing oral argument on an issue that will affect countless employers across the country – whether employers may implement arbitration agreements with class action waivers — the United States Supreme Court has issued what is bound to be considered a landmark decision in Epic Systems Corp. v. Lewis (a companion case to National Labor Relations Board v. Murphy Oil USA and Ernst & Young LLP v. Morris), approving the use of such agreements.

The decision will certainly have a tremendous impact upon pending wage-hour class and collective actions, many of which had been stayed while the courts and parties awaited the Supreme Court’s decision.  And it is likely to lead many more employers to implement arbitration agreements with class action waivers going forward, if only to avoid the in terrorem effect of those types actions.

In a 5-4 vote along the very lines that many commentators had predicted, with newest Supreme Court Justice Neil Gorsuch penning the majority opinion, the Supreme Court determined that the law is “clear” that class action waivers are enforceable under the Federal Arbitration Act (“FAA”) – and that they are not prohibited by the National Labor Relations Act (“NLRA”), as several Circuit Courts had concluded following the National Labor Relations Board’s (“NLRB”) DL Horton decision.

In reaching this decision, the Court took great pains to address – and reject – the various arguments presented by the former NLRB General Counsel, the related labor union and various amicus briefs submitted by the plaintiffs’ bar.  In so doing, the Court noted that for the first 77 years of the NLRA, the NLRB had never argued that class action waivers violated the Act; instead, the FAA and the NLRA had coexisted peacefully.  In fact, as the Court pointed out, as recently as 2010 the NLRB’s General Counsel had asserted that class action waivers did not violate the NLRA.

The decision is an unqualified victory for employers, particularly those who already have such arbitration agreements in place.  Given the prevalence of wage-hour class and collective actions, and the potential exposure in even the most baseless of suits, other employers would be wise to consider whether they, too, wish to implement such agreements.

Not unimportantly, the decision might give employers new grounds to argue that employees who sign such agreements are prohibited from pursuing representative claims under California’s Private Attorneys General Act (“PAGA”).  Even if those new arguments prove to be unavailing – to date, the California state courts have held that such claims cannot be compelled to arbitration because they belong to the state, not the employee –the Supreme Court’s decision could be used to require that an individual arbitrate his or her individual claims first such that he or she would not have standing to pursue the PAGA claims if the employer prevailed in arbitration.

And employers should be mindful that in some states (California again), an employer must pay virtually all of the costs of the arbitration process, a reality that has led more than a few plaintiffs’ lawyers to file multiple individual arbitrations in order to drive up employers’ costs to try to force them to the settlement table.

On April 30, 2018, the California Supreme Court issued its long-awaited opinion in Dynamex Operations West, Inc. v. Superior Court, clarifying the standard for determining whether workers in California should be classified as employees or as independent contractors for purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”). In so doing, the Court held that there is a presumption that individuals are employees, and that an entity classifying an individual as an independent contractor bears the burden of establishing that such a classification is proper under the “ABC test” used in some other jurisdictions.

Depending on the applicable statute or regulation, California has a number of different definitions for whether an individual is considered an entity’s employee. In Dynamex, the Court concluded that one of these definitions – “suffer or permit to work” – may be relied upon in evaluating whether a worker is an employee for purposes of the obligations imposed by the wage order. But the Court held that the Court of Appeal had gone too far in providing a literal interpretation of “suffer or permit to work” that would encompass virtually anyone who provided services.

The Court held that it is the burden of the hiring entity to establish that a worker is an independent contractor who was not intended to be included within the applicable wage order’s coverage.

To meet this burden, the hiring entity must establish each of the following three factors, commonly known as the “ABC test”:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

The Court concluded that the “suffer or permit to work definition is a term of art that cannot be interpreted literally in a manner that would encompass within the employee category the type of individual workers . . . who have traditionally been viewed as genuine independent contractors who are working only in their own independent business.”

Following Dynamex, entities doing business in California that treat some workers as independent contractors will want to review their relationship under the “ABC test” to determine whether any or all such workers should be reclassified.

In 2012, we were proud to introduce our free wage and hour app.  Over the years, thousands of clients and potential clients have downloaded the app on their mobile phones and tablets.

For 2018, we are pleased to introduce a brand-new version of the app, available without charge for iPhoneiPad, and Android devices. See our press release here.

Importantly, the 2012 and 2014 versions of the app have been retired.  If you had downloaded them, you will need to download the new version.

The new version of the app includes wage-hour summaries for all 50 states, as well as D.C. and Puerto Rico.  And it includes updates for 2018, including new state minimum wages and tipped employee rates.

Now more than ever, we can say that the app truly makes nationwide wage-hour information available in seconds. At a time when wage-hour litigation and agency investigations are at an all-time high, we believe the app offers an invaluable resource for employers, human resources personnel, and in-house counsel.

Key features of the updated app include:

  • Summaries of wage and hour laws and regulations, including 53 jurisdictions (federal, all 50 states, the District of Columbia, and Puerto Rico)
  • Available without charge for iPhoneiPad, and Android devices
  • Quick access to, and a direct feed of, Epstein Becker Green’s award-winning Wage and Hour Defense Blog, which provides up-to-date commentary on wage and hour developments
  • Social media feeds from Twitter, Facebook, LinkedIn, and YouTube
  • Quick links to Epstein Becker Green’s attorneys and practices – and more!

If you haven’t done so already, we hope you will download the free app soon.  To do so, you can use these links for iPhoneiPad, and Android.

On April 12, 2018, the Wage and Hour Division of the U.S. Department of Labor (“DOL”) issued the first Opinion Letters since the Bush administration, as well as a new Fact Sheet.  The Obama administration formally abandoned Opinion Letters in 2010, but Secretary of Labor Alexander Acosta has restored the practice of issuing these guidance documents.  Opinion Letters, as Secretary Acosta states in the DOL’s April 12 press release, are meant to explain “how an agency will apply the law to a particular set of facts,” with the goal of increasing employer compliance with the Fair Labor Standards Act (“FLSA”) and other laws.  Not only do Opinion Letters clarify the law, but pursuant to Section 10 of the Portal-to-Portal Act, they provide a complete affirmative defense to all monetary liability if an employer can plead and prove it acted “in good faith in conformity with and in reliance on” an Opinion Letter.  29 U.S.C. § 259; see also 29 C.F.R. Part 790.  For these reasons, employers should study these and all forthcoming Opinion Letters closely.

Opinion Letter FLSA2018-18 addresses the compensability of travel time under the FLSA, considering the case of hourly-paid employees with irregular work hours who travel in company-provided vehicles to different locations each day and are occasionally required to travel on Sundays to the corporate office for Monday trainings.  The Opinion Letter reaffirms the following guiding principles: First, as a general matter, time is compensable if it constitutes “work” (a term not defined by the FLSA).  Second, “compensable worktime generally does not include time spent commuting to or from work.”  Third, travel away from the employee’s home community is worktime if it cuts across the employee’s regular workday.  Fourth, “time spent in travel away from home outside of regular working hours as a passenger on an airplane, train, boat, bus, or automobile” is not worktime.

With these principles in mind, this letter provides two non-exclusive methods to reasonably determine normal work hours for employees with irregular schedules in order to make an ultimate judgment call on the compensability of travel time.  Under the first method, if a review of an employee’s hours during the most recent month of regular employment reveals typical work hours, the employer can consider those the normal hours going forward.  Under the second method, if an employee’s records do not show typical work hours, the employer can select the average start and end times for the employee’s work days.  Alternatively, where “employees truly have no normal work hours, the employer and employee … may negotiate … a reasonable amount of time or timeframe in which travel outside the employees’ home communities is compensable.”  Crucially, an employer that uses any of these methods to determine compensable travel time is entitled to limit such time to that accrued during normal work hours.

Opinion Letter FLSA2018-19 addresses the compensability of 15-minute rest breaks required every hour by an employee’s serious health condition (i.e., protected leave under the FMLA).  Adopting the test articulated by the Supreme Court in the Armourdecision—whether the break primarily benefits the employer (compensable) or the employee (non-compensable)—the letter advises that short breaks required solely to accommodate the employee’s serious health condition, unlike short, ordinary rest breaks, are not compensable because they predominantly benefit the employee.  The letter cautions, however, that employers must provide employees who take FMLA-protected breaks with as many compensable rest breakers as their coworkers, if any.

Opinion Letter CCPA2018-1NA addresses whether certain lump-sum payments from employers to employees are considered “earnings” for garnishment purposes under Title III of the Consumer Credit Protection Act (the “CCPA”).  The letter articulates the central inquiry as whether the lump-sum payment is compensation “for the employee’s services.” The letter then analyzes 18 types of lump-sum payments, concluding that commissions, bonuses, incentive payments, retroactive merit increases, termination pay, and severance pay, inter alia, are earnings under the CPA, butlump-sum payments for workers’ compensation, insurance settlements for wrongful termination, and buybacks of company shares are not.

Finally, Fact Sheet #17S addresses the FLSA’s minimum wage and overtime requirement exemptions for employees who perform bona fide executive, administrative, professional, and outside sales duties (known as the “white collar exemptions”) in the context of higher education institutions.  Specifically, the letter provides guidance as to the exempt status of faculty members, including coaches, non-teacher learned professionals (e.g., CPAs, psychologists, certified athletic trainers, librarians, and postdoctoral fellows), administrative employees (e.g., admissions counselors and student financial aid officers), executive employees (e.g., department heads, deans, and directors), and student-employees (i.e., graduate teaching assistants, research assistants, and student residential assistants).  Of note, the letter confirms that the DOL is undertaking rulemaking to revise the regulations that govern the white collar exemptions.