Defense Against Wage & Hour Claims: The Return of the DOL Opinion Letter
An affirmative defense to a wage and hour claim under the Fair Labor Standards Act is like a warm blanket on a cold day. Good news – it is January and you, employers, are in luck - warm blanket style.
On June 27, 2017, the U.S. Department of Labor announced that it would reinstate the issuance of Opinion Letters by its Wage and Hour Division. Back in 2010, the DOL replaced Opinion Letters with “Administrator Interpretations.” A short explanation of the difference: an Opinion Letter is the DOL’s official written opinion of the law applied to specific workplace circumstances, while an Administrator Interpretation is more of a general guidance on how the law relates to a particular industry.
Opinion Letters are excellent for employers. Why? The specific facts analyzed in an Opinion Letter can be invaluable to helping an employer determine how to pay its employees in a manner that is compliant with the law. Additionally, Opinion Letters, with their analysis of specific circumstances, offer a valuable defense in litigation. If an employer can prove that it acted in good faith and in conformity with an Opinion Letter, the business may avoid liability as a whole, or, at the very least, reduce the likelihood of liquidated (double) damages and reduce the statute of limitations (the time in which an employee has to file suit under the FLSA) from three to two years.
In addition to renewing the issuance of Opinion Letters, on January 5, 2018, the DOL reissued 17 letters withdrawn by the previous administration. As a result, employers have some concrete advice on topics including:
- Whether the following categories of employees are exempt from overtime compensation: client service managers for an insurance company, civilian helicopter pilots, construction project supervisors, and consultants, clinical coordinators, and business development managers of a healthcare placement company
- Whether an employer may deduct an exempt employee’s pay where the employee is absent for one or more full days and has no remaining paid time off
- Whether an employer can deduct the wages of an exempt on-call worker where the employee is unavailable to be on-call for certain days
- Whether bonuses and other payments should be included in calculating an employee’s regular rate of pay (which determines the employee’s overtime rate)
- Whether a plumbing repair and service business qualifies as a retail or service establishment exempt from overtime under the FLSA
DOL guidance is a good – no, a great – thing. A compliant workforce is one that enters litigation confidently. If your industry is affected by a reissued opinion letter, or you want to know if the DOL has an opinion on your workforce, please contact me.