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Mail Time: Wage and Hour Opinion Letters for Local Government

by Aim Admin | Oct 15, 2020 | Legislators, Media, Members

By Barnes & Thornburg LLP

The U.S. Department of Labor (DOL) Wage and Hour Division administrator often releases opinion letters on various issues that come up in wage and hour complaints. While DOL opinion letters can provide helpful analogies for employers defending against wage and hour complaints, it is important to keep in mind that these letters are not binding authority, unless the letter responds directly to the employer’s inquiry.

The DOL this summer issued aimed an opinion letter aimed at local government. This opinion letter dealt with an end of year bonus offered by a city in Alabama, by way of municipal resolution. The administrator concluded that the bonus is not properly excluded from the regular rate. The bonus was calculated using a formula based upon the employee’s length of tenure, and was essentially a “longevity award.” The administrator determined that the bonus is not properly considered a “gift,” which would be excludable from the regular rate, but rather a non-discretionary bonus. The operative resolution stated that the bonus “shall” be paid, not that it “may” be paid. This textual difference was sufficient to remove the payment from an excludable gift to a non-discretionary bonus that must be included in the regular rate of pay. The DOL also opined that emergency management coordinators may qualify as exempt under the administrative exemption, depending on whether certain duties described could be considered the employee’s “primary duty.”

Although they do not have the same binding effect as DOL Rules, the opinion letters provide employers with guidance to ensure proper calculation of non-exempt employees’ regular rate of pay and overtime. Employers would be wise to consider heeding this guidance, as failure to do so may expose employers to litigation. Additionally, employers should take advantage of resources available to remain abreast of the DOL rules concerning the calculation of the regular rate and other wage and hour issues.

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