So probably not super exciting or applicable for many employers, but, as I blog all things wage and hour, here you go! On January 7, 2020, the Department of Labor (DOL) released Opinion Letter FLSA2020-2, opining as to whether educational assistants paid on a per-project basis can meet either the “salary basis” or “fee basis” requirement for exemption from overtime pay under the Fair Labor Standards Act (FLSA). Two scenarios were posed – in the first, an educational consultant was placed on a 20-week project and paid $80,000 in bi-weekly installments ($4,000 per pay period). In the second, the same consultant was concurrently added to a second project to last eight weeks, receiving an additional $6,000 in four biweekly payments ($1,500 per pay period).
The DOL opined that the salary basis requirement were satisfied by both arrangements. The $80,000 payment qualified as a salary, and the additional $6,000 qualified as “extra” compensation under 29 C.F.R. § 541.604(a), which permits an employer to offer additional compensation to an employee without losing the overtime exemption or violating the salary basis requirement. This is true even though the employer acknowledged that the projects were subject to change, which could result in the employee receiving more or less compensation—so long as the total compensation stayed above the threshold, and the changes weren’t so frequent that the salary would become “the functional equivalent of an hourly wage.”