Employee Benefit News for School, City and County Employers

Department of Labor Issues FLSA Opinion Letters

Written by Erin Woulfe | Feb 25, 2021 8:31:24 PM

5.5 minute read

The Department of Labor (DOL) has issued nine opinion letters which clarify how the Fair Labor Standards Act (FLSA) applies to various employment situations.

Five letters address how to apply existing FLSA exemption requirements to specific situations. Two discuss adequate calculation and payment of employee tips. And the DOL withdrew three letters because they were issued prematurely, as they were based on rules that have not yet gone into effect.

The table below is an overview of each opinion letter and a short description of the situations where they may apply. Items in red are the items withdrawn by the DOL because they were posted prematurely.

Letter Topic Description and Status
FLSA2021-1

Administrative Employee Exemption

  • Addressing whether account managers at a life science products manufacturer qualify for the administrative employee exemption under the FLSA.
  • To determine whether the exemption applies, the DOL uses a fair, rather than a narrow interpretation approach.
FLSA2021-2 Ministerial Exception
  • Private religious day care and preschools can pay their teachers on a salary basis under the ministerial exception.
  • However, whether teachers “qualify as ministers depends on their duties as employees, not upon the employer’s designation.”
FLSA2021-3 Seasonal Establishments
  • Seasonal establishments are exempt from minimum wage and overtime requirements if they are (1) an establishment, (2) that is “amusement or recreational” in character or an organized camp, or a religious or nonprofit educational conference center and (3) meet the seasonality requirements set out by the FLSA.
  • To qualify as a seasonal establishment, an entity must have a physical location that is used to satisfy the amusement or recreational requirement.
  • Finally, under this exemption, employers cannot count bona fide charitable donations to satisfy the receipts test.
FLSA2021-4 Tip Pooling Regulation
  • On Jan. 26, 2021, the DOL withdrew this opinion letter because it was issued “prematurely … based on rules that have not gone into effect.” Specifically, the final rule on tip regulations is scheduled to become effective March 1, 2021. However, this rule is also subject to the regulatory freeze imposed by President Biden’s administration.
  • Addresses whether a restaurant may institute a tip pool under the FLSA that includes both servers, for whom the employer takes a tip credit, as well as hosts and hostesses, for whom a tip credit is not taken.
FLSA2021-5

Tip Calculation for Automatic Gratuities and Service Charges

  • Addresses the proper calculation of overtime pay under the FLSA when a tipped employee works as a server and bartender, and receives tips and amounts charged as automatic gratuities or service charges.
FLSA2021-6

The Retail or Service Establishment Exception

  • Indicates that staffing firms qualify for the “retail or service establishment” exception if it meets all of the requirements for that exemption.
  • Specifically, the DOL indicates that determining whether a staffing firm meets these requirements requires a case-by-case analysis.
FLSA2021-7

Journalists and the Creative Professionals Exception

 

  • Asserts that local, small-town and community news source journalists may qualify for the creative professional exemption under the FLSA if they satisfy the primary duties test for this exemption.
  • When performing a duty analysis, the DOL states that previously, the agency “ready the FLSA’s exemptions strictly,” but that there is no actual mandate to adhere to a strict interpretation. Instead, the agency indicates that it now gives the creative professional exemption a “fair (rather than a narrow) interpretation.”
FLSA2021-8

Worker Classification— Employee or Independent Contractor

 

  • On Jan. 26, 2021, the DOL withdrew this opinion letter because it was issued “prematurely … based on rules that have not gone into effect.” Specifically, the final rule on tip regulations is scheduled to become effective March 8, 2021. However, this rule is also subject to the regulatory freeze imposed by President Biden’s administration.
  • Addresses whether certain distributors of a manufacturer’s food products are employees or independent contractors under the FLSA.
FLSA2021-9

Worker Classification— Employee or Independent Contractor

  • On Jan. 26, 2021, the DOL withdrew this opinion letter because it was issued “prematurely … based on rules that have not gone into effect.” Specifically, the final rule on tip regulations is scheduled to become effective March 8, 2021. However, this rule is also subject to the regulatory freeze imposed by President Biden’s administration.
  • Addresses whether requiring tractor-trailer truck drivers to implement safety measures required by law constitutes control by the motor carrier for purposes of their status as employees or independent contractors under the FLSA and whether certain owner-operators are classified properly as independent contractors.

 Description and Status

 Employers should review these opinion letters and determine if the new guidance affects their current payroll practices or employee classification.

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