The U.S. Department of Labor under the Obama administration suspended issuing opinion letters in response to employer requests for legal clarification. The Trump administration has renewed the opinion letter process in an attempt to keep employers informed of their obligations and protect employee rights.
Opinion letters apply to specific situations but provide some guiding principles to similarly situated employers. As always, consult your attorney before assuming any particular FLSA exemption applies to your situation.
THE LAW The Fair Labor Standards Act establishes the federal minimum wage, defines what tip credit employers may claim when paying tipped employees and requires employers to pay overtime for nonexempt workers who work more than 40 hours in a week. The FLSA regulatory framework allows the DOL great leeway in interpreting regulations.
WHAT'S NEW The DOL issued four opinion letters in early November in response to employer requests.
The most noteworthy letter dealt with administering tip credits to tipped employees. The new letter is a reissue of a rescinded 2009 letter that helped define how employers may apply tip credits when employees only spend part of their shift performing tipped work. The letter also clarifies how to pay when an employee holds two jobs, one tipped, one not.
A nonprofit volunteer firefighting organization asked whether it could use a partial overtime exemption available to public fire departments.
The DOL also opined on the relationship between salary paid to workers and their actual earnings.
Finally, a pool management company requested clarification on whether it was qualified for a "seasonal amusement" exemption to overtime requirements.
HOW TO COMPLY All the letters dealt in some way with how to comply with the FLSA.
Tip credits, non-tipped duties
Opinion Letter FLSA2018-27 changes the current rule regarding employer tip credits. Employers may pay tipped employees $2.13 per hour and take a tip credit for the difference between the applicable minimum wage (federal or state) and $2.13 as long as the employee actually receives the difference in tips. FLSA regulations define a tipped employee as any employee engaged in an occupation in which he or she customarily and regularly receives not less than $30 a month in tips.
Employees who only perform work on tipped jobs for part of their shift or who had "dual jobs" where one was tipped and the other was not have posed logistical problems for employers. The...