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DOL Issues Final Rule on Fluctuating Workweek Method of Computing Overtime under Fair Labor Standards Act

On May 20, 2020, the U.S. Department of Labor (DOL) released its final rule revising its so-called “fluctuating workweek” regulation. The final rule confirms that incentive payments—such as bonuses, commissions, and other premium payments—made in addition to the salary are compatible with the use of the fluctuating workweek method of compensation. The DOL also clarifies other aspects of the fluctuating workweek method that have confused courts and employers alike. The final rule provides much-needed clarity to the regulated community and provides additional flexibility to employees and employers in structuring compensation arrangements that align with their objectives.

DOL Green Lights Bonuses for Employees with Fluctuating Work Schedules

The U.S. Department of Labor (DOL) has issued a final rule under the Fair Labor Standards Act (FLSA) expressly authorizing employers to offer bonuses, hazard pay, and other premiums to employees whose hours, and regular rate of pay, vary from week to week.

DOL Issues Final Rule Permitting Use of Non-Salary Compensation under ‘Fluctuating Workweek’ Pay Method

On May 20, 2020, the U.S. Department of Labor (DOL) issued a Final Rule expressly permitting employers to provide additional pay, such as bonuses, commissions, or premiums, to employees when utilizing the “fluctuating workweek” (FWW) pay method under the Fair Labor Standards Act (FLSA), without jeopardizing the use of that pay method.

DOL Revised Section 7(i) Exemption Regulations: Is Your Company a Retail or Service Establishment?

Does an employer’s business qualify as a “retail or service establishment” for the purpose of satisfying the exemption requirements of section 207(i) of the federal Fair Labor Standards Act? The answer to this question might have just changed based on the Department of Labor’s (DOL) recent regulatory action.

DOL Issues Guidance on Calculating Regular Rate of Pay for FFCRA Leave

The United States Department of Labor recently updated its guidance on the Families First Coronavirus Response Act (“FFCRA”). One critical aspect of the updated guidance instructs employers how to calculate paid leave under the FFCRA, including how to calculate the employee’s hours and rate of pay. See questions 81-85 of the guidance here.

Fifth Circuit Reverses Course, Concludes That “Day Rate” Pay Method Fails to Satisfy FLSA’s “Salary Basis” Test for Overtime Exemptions

Upon further reflection, a panel of the U.S. Court of Appeals for the Fifth Circuit has determined that paying an employee a set amount for each day that he works (i.e. on a “day rate” basis) does not satisfy the “salary basis” component required to qualify as overtime-exempt under the Fair Labor Standards Act (FLSA), even if by working a single hour in a given week, the employee will earn at least the weekly minimum salary (currently, $684.00) required to satisfy the exemption. Hewitt v. Helix Energy Solutions Group, Inc., 2020 U.S. App. LEXIS 12554 (5th Cir. Apr. 20, 2020).

DOL Issues New Opinion Letters Revolving Around the FLSA’s “Regular Rate”

Continuing the practice it reinstituted about two years ago, on March 26, 2020 the U.S. Department of Labor’s Wage Hour Division (WHD) issued three new opinion letters, each revolving around the “regular rate” that is used when calculating any overtime pay due to non-exempt employees for work performed in excess of 40 hours in a workweek. A brief summary of those Opinion Letters is as follows:

Limousine Service Employee Was Properly Classified as Exempt, Second Circuit Holds

Upholding a jury verdict in favor of the defendant “black car” (limousine service) company, the U.S. Court of Appeals for the Second Circuit concluded that the plaintiff-employee was properly classified as overtime-exempt under both the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). Suarez v. Big Apple Car, Inc., 2020 U.S. App. LEXIS 8683 (2d Cir. Mar. 17, 2020). The Second Circuit has jurisdiction over the federal courts in New York, Connecticut, and Vermont.

FLSA Collective Action Trimmed Because Court Lacked Specific Jurisdiction

A Minnesota federal district court recently denied FLSA conditional certification over the claims of workers who were not assigned to a Minnesota project at issue or not Minnesota residents due to specific jurisdiction considerations. Vallone et al. v. The CJS Solutions Group, LLC, No. 19-1532 (D. Minn. Feb. 5, 2020).

Thinking It Through: Wage and Hour Implications of Employer Responses to the Coronavirus

The spread of the novel coronavirus and associated outbreak of the COVID-19 disease raise challenging questions for employers. This article will describe some of the U.S. wage and hour implications resulting from employers’ measures addressing the COVID-19 outbreak, including compensation for employees who are quarantined or furloughed, business expense reimbursement, reporting time pay, and predictive scheduling laws. Littler’s additional COVID-19 resources can be found here.
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