DOL Issues Opinion Letter Clarifying When Employees Paid on Hourly, Daily, or Shift Basis Can Satisfy “Salary Basis” Requirement

On November 8, 2018, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued a new opinion letter addressing the circumstances under which an employee who is paid on an hourly, daily, or shift basis (subject to a weekly guarantee) may qualify as an exempt executive, administrative, or professional employee under section 13(a)(1) of the Fair Labor Standards Act of 1938 (FLSA). While not establishing a bright-line rule, the opinion letter confirms that: (a) a ratio of 1.5-to-1 between an employee’s usual weekly earnings and the weekly guarantee is acceptable; (b) a ratio that exceeds 1.5-to-1 is vulnerable to challenge; and (c) a ratio of 1.8-to-1 or more is probably not acceptable.