United States: DOL Issues Employer-Friendly Opinion Letters

Executive Summary: Last week, on August 28, 2018, the U.S. Department of Labor (DOL) issued four Fair Labor Standards Act (FLSA) opinion letters. In welcome late-summer news to employers, each opinion is employer-friendly. Below is a summary of each.

  • Time Spent on Employer-Offered Wellness Activities and Benefits Affairs is Noncompensable. (FLSA2018-20)

An employer sought guidance on whether the FLSA requires compensation for the time an employee spends voluntarily participating in certain wellness activities, biometric screenings, and benefits affairs. The biometric screenings, completely voluntary, test an employee's cholesterol levels, blood pressure, and nicotine uses. The employee's participation in the screenings could decrease his or her health insurance deductibles. The screenings are in no way related to the employee's job.

The employer also permits employees to participate in wellness activities such as attending health classes, participating in Weight Watchers, and using the employer-provided gym. Again, these wellness activities are completely voluntary and do not relate to the employee's job. They are offered because they could also potentially decrease the employee's health insurance premiums. Finally, the employee may choose to attend a benefits fair to learn about financial planning, employer-provided benefits, or college attendance opportunities. Attendance is entirely optional.

The DOL concluded that the employee's voluntary participation in all of these activities predominantly benefits the employee and thus does not constitute compensable worktime under the FLSA. The DOL emphasized that given the activities were completely optional and provided direct financial benefit to only the employee, the time was noncompensable. Moreover, the DOL concluded that the activities are noncompensable "off duty time" under 29 C.F.R. § 785.16 because the employer relieved employees of all job duties when it allowed them to participate.

  • Technology Company Selling Credit Card Platform to Businesses Qualifies for the Retail Establishment Exemption. (FLSA2018-21)

This opinion was highly fact-sensitive. The employer employs sales representatives to sell a technology platform to merchants that enables online and retail merchants to accept credit card payments from a mobile device, online, or in person. The employer sought guidance on whether its employees were exempt under the "retail or service establishment" exemption under the FLSA. 29 U.S.C. § 207(i). The exemption applies if the employee works at a retail or service establishment, the employee's regular rate of pay exceeds one and one-half the applicable minimum wage in the workweek in which s/he works overtime, and more than half of the employee's earnings in a representative period consists of commissions. The question was whether the employer qualified as a "retail or service establishment." To qualify, the company must "engage in the making of sales of goods or services"; "75 percent of its sales of goods or services . . . must be recognized as retail in a particular industry"; and "not over 25 percent of its sales of goods or services . . . may be sales for resale."

The DOL concluded that the exemption applied. It concluded that the employer sells its wares to a variety of purchasers, the platform serves everyday needs, the platform is not resold, and the company does not sell large quantities to any single customer. That the employer sells its goods to commercial entities did not alter the DOL's conclusion. It cited a long line of cases holding that businesses may qualify as retail or service establishments when their customers and end-users are predominantly commercial entities. Given the specific facts underlying the employer's business, the DOL found that the employer was a "retail or service establishment" under 29 U.S.C. § 207(i).

  • Non-Profit Organization May Treat Graders of Licensing Examinations as Volunteers. (FLSA2018-22)

A non-profit organization sought the DOL's opinion on whether it could treat individuals who traveled to the United States once a year for a one- to two-week period to grade a global credentialing examination as volunteers instead of short-term employees if the graders did not receive a fee for their services going forward. The DOL concluded that it could.

Each year, the organization selects over 600 members who are credential-holders to grade an examination. The graders tend to be "the most successful and highly compensated individuals in their professions." The organization pays for the graders' transportation, accommodation and meals. They are motivated to serve mainly to "give back to the profession," among other salutary aims. The organization previously provided a flat fee to the graders but plans to stop paying the fee and classify the graders as volunteers.

The DOL opined that it could do so. As long as the volunteer offers his or her services "freely without coercion or undue pressure" from an employer, s/he could be classified as a volunteer. The organization could still pay for the graders' travel, lodging, and other expenses without negating their volunteer status.

  • Food Vendors in Movie Theatres May Qualify for the Movie Theater Exemption if the Food Service and Film Entities are Unitary. (FLSA2018-23)

The FLSA exempts from its overtime requirements "any employee employed by an establishment which is a motion picture theater." 29 U.S.C. § 213(b)(27). The question this DOL opinion addressed was whether the exemption applied to the food service operations of a particular motion picture theater company.

The movie theater employer provides in-theater dining. Some of the company's locations have a full-service on-site restaurant. This opinion letter hinged on the fact that movies are shown at all times during all locations' hours of operation. In almost all instances, people who eat at the restaurant must purchase a movie ticket. The food service operations are not separately incorporated and do not operate in any way as separate entities. For instance, the same payroll is used for theater staff and food service staff.

The DOL concluded that the employer qualified as a motion picture theater within the meaning of the exemption. Interpreting 29 C.F.R. § 779.05, which governs whether portions of a business are a single unit, the DOL found that the company's food services operations were functionally integrated with its theater operations as a single unit. The DOL went further and opined that even if there was no full functional integration, the company's location would still be a single establishment because of the "interchange of employees between the units. The company's locations showed films well in excess of the 50 percent threshold necessary to qualify as a "motion picture theater" under § 213(b)(27), so the exemption applied.

Employers' Bottom Line: The DOL continues to issue employer-friendly opinions. Employers should be pleased to note the DOL is even "backstopping" its opinions with what courts would consider "dicta," offering opinions it does not need to offer to resolve employer inquiries. That is a good indication that the Department likely will continue to issue employer-friendly opinions in the coming years.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Proskauer Rose LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Proskauer Rose LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions