Wage and Hour Case Notes

• Citation: Vol. 33 No. 5
• Publication year: 2019
• Author: By Lois M. Kosch

Wage and Hour Case Notes

By Lois M. Kosch

Lois M. Kosch is a partner at Wilson Turner Kosmo. She specializes in counseling and representing employers in all aspects of employment law and litigation. Ms. Kosch is a former member of the Labor and Employment Law Section's Executive Committee.

DOL Opinion Letters

On July 1, 2019, the U.S. Department of Labor issued three new opinion letters addressing compliance issues under the Fair Labor Standards Act (FLSA). An opinion letter is an official, written opinion by the Department's Wage and Hour Division (WHD) on how a particular law applies in specific circumstances presented by the individual or entity that requested the letter. Opinion Letters are available on the DOL's website (www.dol.gov/whd/opinion/guidance.htm). The new opinion letters address the following topics:

• Calculation of overtime pay for nondiscretionary bonuses paid on a quarterly and annual basis. The opinion letter reiterates that an employer is not required to retrospectively recalculate the regular rate of pay if the employer pays a fixed percentage bonus that simultaneously pays overtime compensation due on the bonus (FLSA2019-7).
• Application of the highly compensated employee exemption to paralegals employed by a trade organization. The DOL concluded that the paralegals in question qualified for the exemption because they performed at least one of the duties of an exempt administrative employee and were paid an annual salary of at least $100,000 per year (FLSA2019-8). (Note: California law does not recognize this exemption.)
• Permissible rounding practices for calculating an employee's hours worked. The opinion letter restates the DOL's policy, which generally allows rounding to the nearest five minutes, one-tenth of an hour, one-quarter of an hour, or one-half hour as long as the rounding still results in the employee being paid for all
• hours worked (FLSA2019-9).

DLSE Opinion Letter: Application of the ABC Test to Claims Arising Under Wage Orders (May 3, 2019)

The Division of Labor Standards Enforcement (DLSE) released an opinion letter addressing the issue of whether the ABC test set forth by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court¹ applies to Labor Code claims where a hiring business asserts that a worker is an independent contractor and not an employee. The DLSE opined that the ABC test applies to claims resting on the failure to fulfill obligations imposed by an applicable IWC Wage Order ( under Dynamex), as well as to certain Labor Code provisions that serve to enforce wage order requirements. The DLSE reasoned that because wage order provisions are not independently actionable, and certain Labor Code provisions enforce the wage orders, the Labor Code provisions that implicate or "derive" from employer obligations under the wage orders are also subject to the ABC test.

The DLSE specifically mentioned the following Labor Code claims: (1) minimum wage (Labor Code sections 1182.12 and 1197); (2) overtime (Labor Code sections 510 and 1194); (3) liquidated damages (Labor Code section...