Dealing With a Dizzying Array of Wage, Hour Developments


Tips

In a fitting opening to baseball season, the Labor Department has been fully on the mound and pitching a lot of information into the public arena in the past two weeks. So much so that while tracking one development, several others may have whizzed by. Here is a recap to help keep track of some highlights.

An amendment to the Fair Labor Standards Act regarding the tip credit was tucked into page 2,025 of the budget legislation, better known as the Consolidated Appropriations Act, 2018 (Pub. L. No. 115-141), which was signed into law March 23 by President Donald Trump.

A Field Assistance Bulletin (FAB 2018-3), issued April 6 by the Labor Department’s Wage and Hour Division, shed some light on the amendment and some terms it used.

In the legislation under Title 12—Tipped Employees, employers may not keep employees’ tips for any purpose. Additionally, managers and supervisors must not keep any part of employees’ tips, even if the employer receives a tip credit. Employers that violate the provision are liable for an amount equal to the sum of any tip credit taken and all tips unlawfully kept, plus an equal amount in damages.

The  bulletin defined what is meant by managers and supervisors, positions that were not defined in the amendment.  

Managers and supervisors must not participate in tip pools, the amendment said. The white-collar exemption duties test is to be used to determine whether a worker qualifies as a manager or supervisor,  the Labor Department said. The duties test requires the worker to have the authority to hire and fire, to have management as a primary duty, and to supervise at least two employees.

So, the bulletin’s manager and supervisor definitions are in play at least until the Wage and Hour Division issues rulemaking and according to the bulletin, the division “expects to proceed with rulemaking to fully address the impact of the 2018 amendments.”

Separately, three new opinion letters, issued April 12 by the division, addressed the compensability of travel work time (FLSA2018-18), health-related rest breaks (FLSA2018-19), and whether lump-sum payments are earnings for garnishment purposes (CCPA2018-1NA).

In short:

  • The use of a company-provided vehicle, alone, does not make an ordinary commute compensable if the vehicle is used within the normal commuting area for the employer's business and subject to an employer-employee agreement, according to Opinion Letter FLSA2018-18;
  • 15-minute rest breaks that were required because of a serious health condition and protected under the Family and Medical Leave Act are not compensable because they primarily benefited the worker, according to Opinion Letter FLSA2018-19; and
  • Lump sums made in exchange for personal services are earnings subject to Consumer Credit Protection Act garnishment limits, according to CCPA2018-1NA. 

A fact sheet, issued April 12 by the Wage and Hour division, clarifies what jobs within higher education institutions qualify for white-collar exemptions from minimum-wage and overtime requirements.

Fact Sheet No. 17S: Higher Education Institutions and Overtime Pay Under the Fair Labor Standards Act (FLSA) addresses positions included teachers, coaches, student employees, and professional, administrative, and executive employees. It also addresses compensable time within public universities.

Also on April 12, at a congressional hearing to address the fiscal 2019 Labor Department budget, Labor Secretary Alexander Acosta offered testimony and limited guidance regarding the status of overtime rulemaking and thoughts on proposed tip-pool rulemaking that was issued in December.

Regarding when final overtime rules may be expected, Acosta offered that the Labor Department is working diligently on the rule and that his hope is that “we are faster than previous administrations,” but wouldn’t commit to a specific timeline.

Regarding also offered that he feels that the tradeoff between a tip pool that shares between the front of the house and the back of the house in return for making sure as a matter of law that employers cannot keep tips, is a win-win.

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