Fair Labor Standards Act

The United States Department of Labor (DOL) recently announced its decision to once again issue Opinion Letters, Ruling Letters, Administrator Interpretations and Field Assistance Bulletins.  They will be published on the DOL website here, along with past opinions (pre-2009).  Interpretations by the DOL Administrator that interpret the Fair Labor Standards Act (FLSA), Davis-Bacon Act (DBA) or Walsh-Healey Public Contracts Act (PCA), are considered “official rulings”, and thus, provide employers with a good faith reliance defense when so relying. This guidance is very helpful when employers are trying to understand how to interpret the FLSA, DBA or PCA with various facts.

Often, numerous employers have the same questions of interpretation, and thus, opinion letters are very helpful when such common questions arise. The last opinion letters were published in January 2009, and withdrawn by the Obama Administration when the letters were literally not put in the mail in time before the administration changed. If you’d like to receive a notice when new rulings and interpretations come out, you can do so here.

 

 

arrow-23284On June 7, 2017, the U.S. Department of Labor announced its withdrawal of two Obama-era opinion letters, stating the removal does not “change the legal responsibilities of employers under the Fair Labor Standards Act (FLSA) or Migrant and Seasonal Worker Protection Act”. However, certainly such withdrawal is meaningful from an enforceability standpoint, as well as the deference such interpretations have been historically given by the courts. That being said, the DOL has not issued replacement guidance, so how the DOL’s interpretation will change is not yet clear. What we do know is that courts will no longer consider these interpretations, let alone provide them deference in deciding how to interpret the law.

The first, Administrator’s Interpretation No. 2015-1 (July 15,2015), is, “The Application of the Fair Labor Standards Act’s ‘Suffer or Permit’ Standard in the Identification of Employees Who Are Misclassified as Independent Contractors.” In short, AI 2015-1 boldly concluded that, “In sum, most workers are employees under the FLSA’s broad definitions. The very broad definition of employment under the FLSA as ‘to suffer or permit to work’ and the Act’s intended expansive coverage for workers must be considered when applying the economic realities factors…”. By withdrawing such opinion, the DOL has signified a shift toward more targeted requirements when determining whether an individual is an employee or independent contractor.

The second, Administrator’s Interpretation No. 2016-1, is “Joint employment under the Fair Labor Standards Act and Migrant and Seasonal Agricultural Worker Protection Act.” When published, this opinion letter established, for the first time, the distinction between “horizontal” and “vertical” employment. It concluded that joint employment has become more common, and that joint employment should be “regularly considered” in FSLA and MSPA cases. Further, referring to AI-2015-1 (the other opinion letter withdrawn), the DOL stated, “As with all aspects of the employment relationship under the FLSA and MSPA, the expansive definition of ’employ’ as including ‘to suffer or permit toward’ must be considered when determining joint employment, so as to further the statutes’ remedial purposes.” Similarly, we don’t yet know what the DOL’s position is now with respect to joint employment under the FLSA, but it is very likely that it will be less onerous on employers.

Wheelchair ParkingOn May 10, 2017, in LaCurtis v. Express Med. Transporters, Inc. (8th Cir., 2017), the Eighth Circuit Court of Appeals held that 7 passenger paralift van drivers are not exempt under the Motor Carrier Act (MCA) exemption to the Fair Labor Standards Act (FLSA), even though the vans (which are less than 10,000 pounds) were originally designed to transport up to 12 or 15 passengers.

The FLSA has an exception for (and thus, does not regulate) certain drivers and helpers who are covered under the Department of Transportation Secretary’s authority. However, the Motor Carrier Act exemption to the FLSA was narrowed in 2008 by the SAFETEA-LU Technical Corrections Act (TCA). The TCA provides that certain employees are eligible for overtime under the FLSA (and not covered by the MCA exemption), if their work affects the safety of operation of motor vehicles weighing 10,000 pounds or less – UNLESS – the vehicle is “designed or used” to transport more than 8 passengers (including the driver).

Accordingly, in this case, the vans at issue are less than 10,000 pounds, but were originally designed to transport up to 12 and 15 employees, respectively. However, in the conversion to paralift vans, seats were removed, and the vans reconfigured for wheelchairs. Thus, the dispute rested on whether the term “designed” meant as originally designed (for up to 12 or 15 persons), or as currently designed (for up to 7 persons plus a driver).  The Eighth Circuit concluded that Congress intended for the term “design” to not be limited to a vehicle’s original design.  The Court held that as the vans were comprehensively redesigned and substantially modified to seat 7 passengers, and weighed less than 10,000 pounds, the employees were eligible for overtime and the MCA exemption to the FLSA did not apply.

I was presenting a “Hot Topics in Employment Law” update at our 12th Annual Labor Law Forum in Bloomington, Minnesota today, and realized that I had gotten woefully behind on staying updated as to the status of the FLSA white-collar overtime regulations overhaul. So, here it is. As of April 19, 2017, the 5th Circuit Court of Appeals has granted the U.S. Department of Labor’s second unopposed motion to extend the deadline to file its reply brief, as the nominee to be the Secretary of Labor had not yet been confirmed. The Court granted the motion, allowing the DOL until Friday, June 30, 2017 to file its reply brief (or withdraw its appeal).

On April 28, 2017, R. Alexander Acosta was sworn in as the 27th United States Secretary of Labor. Accordingly, I suspect there will be no more delays, and, looking into my crystal ball, will not be shocked if the DOL chooses to withdraw its appeal.