FLSA Video Training Has Arrived at DOL/WHD

The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) is launching a new series of brief, plain-language videos to help employers understand their legal obligations when it comes to calculating overtime etc.  According the the WHD website these videos “strip away the legalese and provide employers with basic information…”  The topics provided so far are:

  • Coverage: Does the Fair Labor Standards Act (FLSA) apply to my business?
  • Minimum Wage: What minimum wage requirements apply to my business?
  • Deductions: Can I charge my employees for uniforms or other business expenses?
  • Hours Worked: Do I have to Pay for that time?
  • Overtime: When do I owe overtime compensation and how do I pay it correctly?

The videos are very well done and cover the rules quite nicely.  For example the overtime video does go into all the calculations needed for regular rate of pay.  They last an average of seven or eight minutes each. If you are looking for a good basic training on these topics listed check out the videos from WHD.

WHD Launches PAID Program

Paid Logo

The Wage and Hour Division (WHD) of the U.S. Department of Labor has launched a new nationwide pilot program, the Payroll Audit Independent Determination (PAID) program. According to the WHD, PAID facilitates resolution of potential overtime and minimum wage violations under the Fair Labor Standards Act (FLSA). The program’s primary objectives are to resolve such claims expeditiously and without litigation, to improve employers’ compliance with overtime and minimum wage obligations, and to ensure that more employees receive the back wages they are owed—faster.

Under the PAID program, employers are encouraged to conduct audits and, if they discover overtime or minimum wage violations, to self-report those violations. Employers may then work in good faith with WHD to correct their mistakes and to quickly provide 100% of the back wages due to their affected employees.

WHD is implementing this self-audit pilot program nationwide for approximately six months. At the end of the pilot period, WHD will evaluate the effectiveness of the pilot program, potential modifications to the program, and whether to make the program permanent.

However there are potential pitfalls to the new program.  The Blog Wage & Hour Insights, which I feature quite often in my blogs, has an excellent post by Staci Ketay Rotman, Bill Pokorny and Erin Fowler on this very subject that I encourage you to read to get a better understanding of this new program.

DOL Issues New Opinion Letters Including Lump Sums

The Federal Department of Labor (DOL) has been issuing a flurry of opinion letters recently.   But even more  amazing, is that one of the opinion letters actually deals with a subject long been a thorn in payroll’s side and one that some of us have waited years for a ruling.  The basic problem is whether or not lump sum payments such as bonuses are the same as normal wages under the law when it comes to withholding for garnishments.  You see many of the states do not think that lump sum payments fall under the Consumer Credit Protection Act or CCPA.  This is the Act, written in 1970, that sets the limits for what can be deducted from an employee’s pay for such garnishments as child support and creditor garnishments.  The DOL is actually in charge of enforcing the Act, but has always been unclear on their position on whether or not lump sum payments are covered under the Act.  This is especially true for child support, as employers may actually be required to report the pending lump sum payment and wait for instructions on withholding, usually for back child support owed to the state.  For example, according the the Office of Child Support Enforcement’s matrix on states and lump sums, Alabama requires 100% of all lump sums.  California states that it is subject to 50% unless the lump sum payment does “not involve earnings”. while Indiana follows the CCPA, So we have tried to look to the DOL to give a definition ruling on this and low and behold, they finally have.

In opinion letter CCPA2018-1NA the DOL has answered numerous questions on what constitutes earnings by discussing 18 different specific examples of common types of lump sum payments that an employer may issue to an employee.  These include commissions, discretionary and non discretionary bonuses, profit sharing, production bonuses, sign-on bonuses, relocation incentive payments and safety awards.

ALEC Wins Another State Over!

The American Legislative Exchange Council, or as it is commonly known ALEC, according to their website, is “America’s largest nonpartisan, voluntary membership organization of state legislatures dedicated to the principles of limited government”.  It’s current legislative agenda is to try to stop increases in the minimum wage and the mandatory sick leave movement as it sees it as having a negative effect on workers.  But in order to keep the minimum wage low or as ALEC describes it; “Maximizing the freedom of businesses and employees to negotiate their own wages” they not only have to convince state legislatures not to raise the minimum wage or provide mandated sick leave, but have to convince all local governments as well.  This is a tough job as there are thousands of local entities such as cities and counties that could decide to raise the minimum wage or enforce mandatory sick leave.  So ALEC takes the approach to tackle this from the head down by convincing state legislatures that they need to pass laws that prohibit any local entity from passing any type of minimum wage or benefit increase that does not equal the state level.  At this task they are making headway.  The latest state to buy into ALEC and bar local governments from passing a minimum wage or benefits ordinance is Wisconsin.

New legislation, A748,  prohibits counties, cities, and towns from enacting ordinances that: (1) establish or mandate local hour and overtime requirements, including scheduling employee work hours or shifts; and (2) require employers to provide employment benefits, including a retirement, pension, profit sharing, insurance, or leave benefit. The legislation does allow prospective employers to solicit salary information from previous employers and preempts counties, cities, and towns from prohibiting such solicitation.  The bill is effective as of March 30, 2018.

New Opinion Letter from DOL–NO Pay for FMLA Breaks

The Department of Labor is once again issuing opinion letters.  A flurry of letters were released on April 12th.  One letter addressed the issue of compensating for breaks that are covered under the Family and Medical Leave Act.  The Wage and Hour Insights blog authored by Staci Ketay Rotman and Bill Pokorny with FranczekRadelet covered this topic quite well so I decided to share it with my blog followers.  I hope you find it useful and insightful.

 

 

 

Jane Fonda is Not Wrong on Tip Regulations

As some of you may have seen on Facebook, a new video with Jane Fonda has been making the rounds. It concerns the latest Department of Labor proposed rules concerning employer treatment of tips.  Leaving the politics of Jane Fonda aside this is an important issue that needs to be understood.  A great source to understand this issue is the latest post from Wage & Hour Insights written by Bill Pokomy on December 8th.  I highly recommend you review his analysis of the proposed rule.

Using Fluctuating Workweek? Might Want to Think Again

If you are currently using the fluctuating workweek that is permitted under the Fair Labor Standard Acts (FLSA) you may want to review that decision.  The Fifth Circuit Court of Appeals has drawn some limits on that method.  Bill Pokorny has done a fantastic blog on discussing this recent court case. Check it out for the latest if you are currently using this type of workweek or just want to increase your current knowledge in this area.

Last Round for Now: Obama Era New OT Rules Knocked Out

On August 31st, the Judge in charge of the court case for the new OT rules initiated by President Obama issued its final ruling.  Basically he sided with the plaintiffs. For an excellent recap of the ruling I am referring you to Bill Pokorny’s blog.

I Need Your Input: Regular Rate of Pay…Your Payroll System

I recently had a discussion with an associate (also an payroll consultant) about the regular rate of pay and payroll systems in general.  Unfortunately the question we both had, we could not fully answer. So I am turning to my blog followers to help me out.  When I started in payroll we did payroll by hand, including the regular rate of pay calculations.  Of course, systems have improved since 1977.  But my question is…which current systems (whether in-house or service bureau) do regular rate of pay calculations?  For example, I give a bonus to an employee for finishing a project on time (nondiscretionary bonus) and he earned it in the same week it was paid.  For this scenario would your payroll system do the regular rate of pay calculation? Or would you have to do it by hand and add it in?  Second example, an employee receives a monthly commission on sales (hourly employee).  He is paid his commission on July 15th for the month of June.  Would your system be able to recalculate the additional overtime due? Or would you have to do it by hand (Excel spreadsheet)?

If your system does not do the regular rate of pay calculation, did you know this when you bought the system or signed up for the service bureau?

I appreciate any input you might have on the subject.  Please include the name of the system if you can do so. Also please note if you had to have a special  program written to handle the calculations.

Latest Round on Battle for Exempt Employees

The latest on the salary increase was released today.  The U.S. Department of Labor has today announced that it will publish a Request for Information (RFI), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees. The RFI offers the public the opportunity to provide information that will aid the Department in formulating a proposal to revise these regulations.  The RFI solicits feedback on questions related to the salary level test, the duties test, inclusion of non-discretionary bonuses and incentive payments to satisfy a portion of the salary level, the salary test for highly compensated employees, and automatic updating of the salary level tests. The 60-day comment period for all issues raised in the RFI ends on September 25, 2017.  The public may submit comments according to the instructions listed in the RFI as published in the Federal Register.

But the court case is still raging on.  The DOL has decided to fight the ruling, not to defend the limits set by the Obama administration, but to defend the concept that the DOL has the right to change the salary limit.  Lots of legal blogging on the topic so I wanted to include some of those blogs for you today:

Smith Gambrell & Russell LLP

Ogletree Deakins

Wage & Hour Insights