Last week the U.S. Department of Labor’s Wage and Hour Division published three Opinion Letters on various wage and hour issues. Opinion Letters provide guidance on wage and hour questions but do not bind a court to its position on that question or issue. The three opinion letters address compliance issues surrounding overtime pay in various aspects.

The first Opinion Letter (FLSA2019-7) addressed the calculation of overtime pay for nondiscretionary bonuses paid on a quarterly or annual basis. The letter approved and found as reasonable the employer’s payment calculation method, although the payment method did not calculate the weekly regular rate with the nondiscretionary bonus.  Instead, the employer calculated the nondiscretionary bonus with overtime of 1.5 times the bonus rate and paid that out separately when the bonus was determined.  The weeks worked with overtime method would be a more common approach.

The second Opinion Letter (FLSA2019-8) addressed whether a paralegal position that is paid over $100,000 per year is exempt under the Fair Labor Standards Act’s Administrative Exemption. The Opinion Letter stated that because the paralegal position in question not only made over $100,000/year but also regularly performed exempt duties or responsibilities as stated under the Administrative exemption rule, the position was found to be exempt for overtime. The Opinion Letter stated that because the paralegal was paid over $100,000/year the “need to examine the employee’s job duties is considerably relaxed.” The Opinion Letter noted that it was sufficient that the paralegal’s work was non-manual, and they customarily and regularly performed one exempt duty under the Administrative exemption tests, which pertained to the company’s legal and regulatory compliance needs.

The third Opinion Letter (FLSA2019-9) addressed an employer’s payroll software method of rounding employees’ daily work hours. The Opinion Letter found that the rounding method that took the hours worked time calculation out to six decimal points was an acceptable method to fairly reach the proper hours worked.  If the first three digits of decimal point were .005 or greater, they rounded up.  If less than .005, they kept it the same.  Wage and hour rules provide a proper approach to rounding hours in Part 785 of the regulations (Sec. 785.48(b)), and this approach fell within regulatory parameters.

Though these Opinion Letters do not address issues common to most employers, they do instruct on the principals the wage and hour administrators look to when interpreting the regulations.

Additional ASE Resources
CCH HRAnswersNow - ASE members can research Hours Worked, Exempt status and Overtime Regulations at ASE’s CCH HR AnswersNow on-line Library available via the ASE Member Dashboard.

FLSA Changes and Working with Exempt/Non-exempt Classification Analysis – This ASE course is offered twice a year and will next be held September 19, 2019.  For more information or to register click here.

Sources: DOL Opinion Letters FLSA2019-7, FLSA2019-8 & FLSA2019-9