As previously reported in the Labor & Employment Law Navigator, the Wage and Hour Division (WHD) of the Department of Labor reinstituted its practice of issuing opinion letters in April of last year. Recently issued opinion letters continue to provide helpful guidance for employers on a number of wage and hour issues.

Certain Paralegals May Be Properly Classified As Exempt

In Opinion Letter FLSA 2019-8, the WHD addressed the issue of whether paralegals employed by a trade organization and paid an annual salary of more than $100,000 can be properly classified as exempt from the FLSA’s minimum wage and overtime requirements. The WHD determined that the paralegals were, in fact, exempt under the lesser-known “highly compensated” employee exemption. The exemption requires that:

  1. The employee earns total annual compensation of at least $100,000, which includes at least $455 per week paid on a salary basis
  2. The employee’s primary duty includes performing office or non-manual work
  3. The employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee (the so-called “white collar” exemptions).

29 C.F.R. § 541.601. The WHD explained that, unlike the other white-collar exemptions, the highly compensated worker exemption does not require as detailed of an analysis of an employee’s job duties, as their high level of compensation provides a “strong indicator” of exempt status.

Here, the WHD noted that the paralegals “customarily and regularly” performed at least one of the duties of an administrative exempt employee. Because the employees were highly compensated, however, they did not need to meet the administrative exemption’s more stringent duties test, requiring that an employee “primarily” perform such duties involving the exercise of discretion and independent judgment.

The Opinion Letter provides a helpful reminder for employers to consider the highly compensated worker exemption for all employees earning more than $100,000 annually.  Use of this exemption will allow the application of the relaxed duties test.

Permissible Rounding Practices For Hours Of Work

In Opinion Letter FLSA 2019-9, the WHD addressed a non-profit organization’s question regarding its payroll software’s rounding practices for nonexempt employees under the Service Contract Act, which follows the principles of the FLSA. The WHD explained that it is acceptable for employers to round employees’ hours, so long as calculations “will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” In other words, an employer’s rounding practices cannot have the effect of working to the employer’s advantage financially or to the employees’ disadvantage (e.g., always rounding down).  The WHD noted that it has been its practice to allow rounding “as long as the rounding averages out so that the employees are compensated for all the time they actually worked.” In this instance, the WHD approved the employer’s computer rounding practice because it was neutral on its face, and effectively averaged out so that employees were paid for all the time that they worked.

The Opinion Letter provides important guidance for employers that round their non-exempt employees’ reported time.  Rounding practices should be reviewed to ensure that they are neutral and do not, over a period time, favor the employer. Unfair rounding practices that deprive employees of compensation expose employers to significant liability, whether through a DOL investigation or a collective/class action lawsuit.

Certain Time Spent By Truckers In Truck’s Sleeper Berth Not Compensable

In Opinion Letter FLSA 2019-10, the WHD addressed whether time spent by over-the-road truck drivers in their trucks’ sleeper berths constitutes compensable working time. In the example considered by the WHD, long-haul truck drivers spent considerable time over the course of multi-day trips in their trucks’ sleeper berths. The time spent in the sleeper berths did not, however, involve driving, inspecting, cleaning, fueling, completing paperwork, or other responsibilities of the drivers’ jobs.

In analyzing the issue, the WHD noted that its prior interpretations were “unnecessarily burdensome for employers” and complicated the issue. The WHD explained that it would adopt a “straightforward” approach, in which time that drivers are relieved of all duties and permitted to sleep in a berth is “presumptively” non-working time and not compensable. In finding the truckers’ time to be non-compensable here, the WHD focused upon the fact that they were relieved of all duties, even if the time was spent confined in the truck’s sleeper berth. The WHD noted that there could be a different result in situations where drivers are not completely off-duty and relieved of work responsibilities.

While the Opinion Letter addressed the working time of truck drivers, it provides guidance for determining hours worked for employees generally. In determining whether an employee’s time is compensable, employers must consider whether an employee is truly off-duty, and thus able to effectively use the time for his or her own purposes. If not, or if the employees perform tasks for the benefit of the employer, the time may be compensable. This issue can arise in many contexts, including when employees report to work early, spend their lunch breaks at their desks, or are required by the employer to be “on call.”