NEW GUIDANCE: Department of Labor Publishes 6 New Opinion Letters

The US Department of Labor has certainly been busy as of late.  In addition to creating a new agency and developing two new websites, the DOL has also issued six new opinion letters, which interpret various issues under the federal Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA).

FMLA Opinion Letters

#1.  Can organ-donation surgery qualify as a “serious health condition” under the FMLA?

In the first letter, the DOL addressed the question of whether an organ donor qualifies as an individual with a serious health condition for purposes of the FMLA.

The DOL concluded that organ donation does qualify as a serious health condition because the donor often will often require an overnight stay in the hospital.

#2.  Does this employer’s no-fault attendance policy violate the FMLA?

In the second letter, the DOL addressed the question of whether a no-fault attendance policy that “freezes” during an employee’s FMLA leave (i.e. remains at the number of attendance points that the employee accrued prior to taking FMLA leave) violates the FMLA.

The DOL concluded that this type of policy does not violate the FMLA, provided it is applied in a nondiscriminatory manner (i.e. that employees on equivalent types of leave receive the same treatment.)

FLSA Opinion Letters

#1.  Does the FLSA’s “retail or service establishment” exemption apply to sales representatives at this employer’s business?

In the first letter, the employer is a company that “sells a technology platform to merchants that enables online and retail merchants to accept credit card payments from their customers from a mobile device, online, or in-person” and wants to know if its sales representatives qualify for the “retail or service establishment” exemption.

The “retail or service establishment” exemption applies to any employee for whom the following three requirements are satisfied:

  • the employee works at a retail or service establishment,
  • the employee’s regular rate of pay exceeds one and one-half times the applicable minimum wage in the workweek in which he or she works overtime, and
  • more than half of the employee’s earnings in a representative period consist of commissions.

To qualify as a “retail or service establishment,”

  • A company must “engage in the making of sales of goods or services; (
  • 75 percent of its sales of goods or services, or of both, must be recognized as retail in the particular industry; and
  • not over 25 percent of its sales of goods or services, or of both, may be sales for resale.

The DOL concluded that this company’s sales employees (who sell a technology platform to other businesses) do qualify for the “retail or service establishment” exemption despite the fact that its customers and end-users are predominantly commercial entities purchasing the platform.

#2.  Do employers have to compensate employees for the time an employee spends voluntarily participating in certain wellness activities (e.g. biometric screenings, and benefits fairs)?

In the first letter, the DOL addressed the question of whether time an employee voluntarily spends at “wellness activities” is compensable.

The DOL concluded that this time is not compensable work because the activities are for the benefit of the employees, not the employers, and the time spent participating in such activities is “off duty.”

#3.  Do employees of food service operations of motion picture theaters qualify for the motion picture theater exemption?

In the third letter, the employer is a movie theater that provides in-theater dining where there is a full-service restaurant on-site and restaurant patrons must purchase a movie ticket to eat at the on-site restaurant.  The restaurant operation is “fully integrated” with the theater operations (i.e. the restaurants do not have separate entrances, operate under different names, file separate taxes, maintain separate bank accounts, place orders separately, pay invoices separately, or use separate bank accounts.)  The employer wants to know if its restaurant employees qualify for the motion picture theater exemption.

Under the FLSA, any employee employed by an establishment which is a motion picture theater is exempt from overtime.  While the term “a motion picture theater” is not defined under the FLSA, the DOL concluded that these employees did qualify for the motion picture theater exemption because the same employees perform work for both movie theater and the restaurant (i.e. the same employees that provide food services, also work as ushers and cashiers in the theater).

#4.  Does the FLSA apply to “member examination graders” of a certain non-profit?

In the fourth letter, the employer is a non-profit organization that that administers professional examinations necessary to obtain professional designations.  Every year, the company selects credential-holders who are members of the organization to serve as “member examination graders” (“graders”) for one or two weeks.  These graders “travel either domestically or from abroad to the United States once a year for a one- to two-week period to grade a global credentialing examination.”  The organization wanted to know if these individuals could be recategorized as volunteers.

The DOL concluded that nonprofit organization graders may be reclassified as volunteers because graders offer their services freely and for service-oriented reasons.  The DOL also commented that the nonprofit organization could continue to pay for graders’ travel, lodging, meal and other expenses incidental to volunteering without negating their volunteer status.