New FLSA Regulations Reject Bush Administration’s Proposed Changes to Fluctuating Workweek, Comp Time, More
|Date Posted: April 4, 2011|
The U.S. Department of Labor on April 5 will publish updates to its Fair Labor Standards Act interpretive regulations in the Federal Register, to go into effect 30 days later.
The “clean-up regulations” revise regulations that had become out of date because of amendments to the FLSA dating back as far as 1974.
The final regulations are noteworthy for what was not included as much as for what was.
For example, proposed regulations issued by DOL in 2008 under the Bush administration (73 Fed. Reg. 43654) would have amended regulations on the “fluctuating workweek” method of calculating overtime pay for nonexempt employees who have agreed to received pay in the form of fixed weekly payments rather than in the form of an hourly wage. The proposed regulations would have amended 29 C.F.R. §778.114 to permit payments of non-overtime bonuses and incentives (such as shift differentials) “without invalidating the guaranteed salary criterion required for the half-time overtime pay computation.”
However, DOL left out this proposed change from the final rules, saying it had “concluded that unless such payments are overtime premiums, they are incompatible with the fluctuating workweek method of computing overtime.” In the Preamble to the final rule, the Obama administration DOL noted that “several commenters [on the NPRM] … noted that the proposal would permit employers to reduce employees’ fixed weekly salaries and shift the bulk of the employees’ wages to bonus and premium pay.”
The final rules also do not include a proposed change that would have allowed public-sector employers to grant employees compensatory time requested “within a reasonable period” of the request, instead of on the specific dates requested. Instead, the final rule will leave the regulations unchanged, “consistent with [DOL’s] longstanding position that employees are entitled to use compensatory time on the date requested absent undue disruption to the agency.”
DOL has also decided to revise the proposed regulations’ interpretation of Congress’ 1974 amendment, section 3(m) of the FLSA, to require advance notice to tipped employees of information about the tip credit the employer is permitted to take based on its employees’ tips. The final rule combines existing regulatory provisions to assure such employees are notified of the employer’s use of the tip credit, and how the employer calculates it. DOL notes in the Preamble to the final rule that the new requirements will “permit employees to retain all of their tips (except for a valid tip pool).”