Friday, August 22, 2008, 12:47 PM

Housekeeping at USDOL

A July 28 Notice of Proposed Rulemaking from the US Department of Labor announced a plan to make so-called "clean-up" amendments to Fair Labor Standards Act regulations. while the initial notice set September 11 as a response cutoff, that deadline has now been extended to September 26. While the changes and clarifications are too numerous to discuss here, some which may be of particular interest are the following:

> Commuting Time: Travel time in employer-provided vehicles wouldn't be compensable if use of the vehicle is "conducted under an agreement between the employer and the employee or the employer's representative." The agreement can be a union contract, a written agreement with the employee, or an "understanding based on established industry or company practice." (Rather than rely on an unwritten "understanding," it would seem prudent to have documentary proof. -- Ed.)

> Stock Options which meet specified criteria would not be included in the "rugular rate" for purposes of overtime computation.

> Fluctuating Work Week: This quite complex area of the regulations would be clarified to eliminate current counterproductive regulatory results. For salaried nonexempt workers whose weekly hours vary, and who nonetheless receive a fixed salary (without overtime premium pay added), the new rules would no longer jeopardize the fluctuating workweek computation if the employer gave a shift differential, hazardous duty compensation, or the like in addition to the base salary. (This is still a tricky subject, and great care must be taken to get it right. the new language would simply remove one obstacle. -- Ed.)

> Tipped Employees: Two new provisions would deal with this topic: (1) The minimum cash hourly wage required for eligible tipped employees would be $2.13, and the allowable hourly credit would be the difference between the otherwise-required minimum hourly wage (now $6.55, and $7.25 after July 24, 2009). (2) New tip credit rules would deny the employer the use of a tip credit unless affected employees are informed of the applicable legal requirements and the employee is allowed to retain tips he or she receives. Tip pooling still is allowed,and the employer may both take a credit for the reasonable cost of meals provided to the employee and may require acceptance of the meal allowance as a condition of employment.

> Youth Opportunity: Employees who are younger than 20 can be paid a minimum wage of $4.25 per hour for their first 90 consecutive calendar days on the job. However, employers are forbidden to displace or penalize other employees (i.e., by cutting hours, pay or benefits) "for the purpose of" hiring youth workers. (Expect some employer to get targeted for an early test case on this one. -- Ed.) By the way, the Genetic Information Nondiscrimination Act of 2008 ("GINA") included an unrelated section boosting civil monetary penalties for child labor violations by 10% - to a $11,000 maximum - as well as upping the penalty for violations resulting in death or "serious injury" (a defined term) to $100,000. (Pundits predict that similar increases are likely for OSHA penalties as soon as Congress gets around to it. -- Ed.)

The remaining adjustments deal with situations which are industry-specific - "salesmen, partsmen and mechanics" (sorry - the gender designations are theirs) selling and servicing automobiles and boats, but not those dealing with trailers or aircraft; agricultural workers on water storage or irrigation projects; and food bank workers. Two more would affect the public sector: There would be a new definition for "fire protection activities" which would include some EMTs and paramedics, and adjustments to compensatory time standards would be made. (Remember that compensatory time outside the public sector is not permitted by the FLSA with the exception of the special health care rules. Some employers are still operating on the erroneous assumption that overtime compensation can be awarded by reducing the hours worked the following week to reach a 40-or-less average. Not so. -- Ed.)

1 Comments:

Blogger Texas Wage-Hour said...

Not to nitpick, but the "old" tip credit rules also "deny the employer the use of a tip credit unless affected employees are informed of the applicable legal requirements and the employee is allowed to retain tips he or she receives." These requirements are statutory. 29 U.S.C. 203(m). With respect to the proposed regs, they sure seem like a last minute attempt to incorporate some pro-employer decisions/legislative history into the regs. For example, while there is a split in the circuits on the use of comp time, you'd never know it from the proposed regs or the preamble. The DOL cites to pro-employer legislative history on ECFA, but ingores it with respect to the tip credit rules. While perhaps less offensive than the proposed 541 regs (which, thankfully, were significantly revised), it is hard to see how these regs benefit America's working people.

August 25, 2008 at 11:05 AM  

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