FLSA Compensation Directives from DOL
DOL issued four opinion letters dealing with the following compensation issues:
Bonus payments awarded specific payments on the basis of meeting specific goals of safety, job duties and performance are considered to be a “predetermined plan to incentivize certain work performance.” Therefore, payments under that plan must be included as part of the employee’s regular rate pay to be used in calculating overtime pay. (Discretionary bonus payments are excluded.)
15-minute pre-shift roll call periods that were part of a collective bargaining agreement are to be considered in calculating overtime payments, despite the bargaining agreement’s stating otherwise.
In a two-part inquiry regarding the FLSA exemption for retail and service establishment employees who are paid at least partly on a commission basis, the questions were whether the federal minimum wage or a higher state minimum wage would govern, and whether tips could be used to meet the FLSA requirement that over half of total pay must consist of commissions to be eligible for exemption. DOL responded (1) that the federal minimum wage is specified in the FLSA, and (2) that tips are not considered commissions, but that, in some cases [not specified], a portion of an employee’s tips could be counted as compensation for determining whether an employee is primarily paid by commission.
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