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Keep Rollin’ Rollin’ Rollin’: DOL Reissues 17 Opinion Letters That Had Been Withdrawn Under the Obama Administration

In late June 2017, the United States Department of Labor (DOL) announced it would be reinstating Opinion Letters issued by its Wage and Hour Division, which was a practice that had ceased back in 2010. This announcement is significant from both the procedural and substantive basis. From 2010 to July 2017, Opinion Letters were replaced by Administrator Interpretations, which set forth a more general interpretation of the law and regulations as they pertained to a particular industry or set of employees. Opinion Letters, on the other hand, are official written opinions that set forth how wage and hour laws apply in very specific circumstances as presented to the DOL Wage and Hour Division via specific employer questions asking for a formal opinion to guide the employer as to how to proceed. In other words, employers submit questions based on their specific factual circumstances and policies and the DOL issues a written opinion as to the legality of the employer’s policies.

With Opinion Letters back, businesses have been waiting to see what the DOL would do with them. In the first week of 2018, the DOL answered that question by re-instating 17 Opinion Letters that were issued in January 2009 but withdrawn during the Obama administration. The DOL also reissued over a dozen advisory Opinion Letters that had been published during former President Bush’s administration, but were also later rescinded.

Because Opinion Letters answer specific business questions related to wage and hour issues in various business segments, the 17 reinstated Opinion Letters and the dozen plus reissued advisory Opinion Letters may provide businesses specific and tailored guidance on various wage/hour issues under the Fair Labor Standards Act (FLSA).

The reinstated letters cover a wide variety of topics including, appropriate inclusions in an employee’s regular pay rate, types of employment that qualify for the FLSA’s minimum wage and overtime exemptions, and how ambulance service workers’ “on-call” time should be treated for purposes of “hours worked” under the FLSA. Here is the full list of reinstated Opinion Letters (all dated January 5, 2018) and links:

Number	Letter Subject
FLSA2018-1	Construction supervisors employed by homebuilders and section 13(a)(1)
FLSA2018-2	Plumbing sales/service technicians and section 7(i)
FLSA2018-3	Helicopter pilots and section 13(a)(1)
FLSA2018-4	Commercial construction project superintendents and section 13(a)(1)
FLSA2018-5	Regular rate calculation for fire fighters and alarm operators
FLSA2018-6	Coaches and the teacher exemption under section 13(a)(1)
FLSA2018-7	Salary deductions for full-day absences based on hours missed and section 13(a)(1) salary basis
FLSA2018-8	Client service managers and section 13(a)(1)
FLSA2018-9	Year-end non-discretionary bonus and section 7(e)
FLSA2018-10	Residential construction project supervisor and section 13(a)(1)
FLSA2018-11	Job bonuses and section 7(e)
FLSA2018-12	Consultants, clinical coordinators, coordinators, and business development managers under section 13(a)(1)
FLSA2018-13	Fraud/theft analysts and agents under section 13(a)(1)
FLSA2018-14	Calculation of salary deductions and section 13(a)(1) salary basis
FLSA2018-15	Product demonstration coordinators and section 13(a)(1)
FLSA2018-16	Volunteer fire company contracting for paid EMTs – joint employment and volunteer status
FLSA2018-17	Construction supervisors employed by homebuilders and section 13(a)(1)

As demonstrated by the list above, there are a number of broad topics covered, i.e., Section 13(a)(1) of the FLSA, which exempts employees employed in a bona fide administrative function, and a number of extremely narrow ones, e.g., those dealing with helicopter pilots, coaches, construction supervisors employed by homebuilders.

Here is a summary of some of the noteworthy findings in the reinstated Opinion Letters:

Bonus Compensation

The DOL reviewed the issue of whether certain bonuses (or other payments) should be included in an employee’s regular rate of pay under the FLSA. See FLSA2018-5, FLSA2018-9, and FLSA2018-11.

Exempt Employee Deductions

The DOL reviewed the issue of whether a salary deduction is permissible when an exempt employee is absent for a full day, but does not have enough leave time in the employee’s leave bank to cover the entire absence. The DOL concluded that, “if the absence is one full day in duration, the employer may deduct one full day’s pay or less. Therefore, in answer to your first question, if an employee is absent for one or more full days, but does not have enough time in his or her leave bank to cover the entire absence, the employer may make a deduction from the employee’s pay for any portion of the full-day absences that is not accounted for by the leave bank.” SeeFLSA2018-7.

Administrative Exemption

In reviewing whether client service managers at an insurance company qualified as exempt administrative employees, the DOL focused on the “independent judgment” factor in determining that their primary duty was to use independent judgment over matters of business significance when issuing advice and, generally, without first seeking upper-level management approval.

On-Call Hours

The DOL concluded that on-call hours of ambulance service personnel are not compensable time under the FLSA for purposes of the regular rate and overtime calculations. The issue arose from an ambulance service’s unwritten policy that required on-call employees to arrive for service at the ambulance garage within five minutes of being notified. The DOL determined the five-minute requirement was “not a significant hindrance” to the employees that would require the employer to convert their on-call time to compensable hours worked. Notably, the scope was an ambulance company servicing a small city of approximately 4,000 individuals.

Takeaways:

Nothing New as the DOL Returns to the Prior Opinion Letter Process. The important news is the return to the more focused, less-sweeping means to establishing DOL-interpretation policy. Otherwise the information provided in the reinstated Opinion Letters is not new; it has been available to businesses for years and, as such, most businesses with issues relevant to the topics in the reinstated Opinion Letters are likely already complying. The reinstated Opinion Letters do not take on any topics that had been severely altered during the Obama administration. We addressed this rolling-back issue in our All Things HR in a post titled “The Way We Were: The NLRB’s Time Machine Resets the Clock on Employer Work Rules and Joint Employer Status” demonstrating this is not just a NLRB mantra, it looks to be the DOL’s too.
Ranging Applicability. As the ambulance-employer DOL Opinion Letter demonstrates, some of the reinstated Opinion Letters will have very limited applicability as Opinion Letters are only as good as the overlapping facts in the circumstances presented in them and the business seeking to use them as guidance. Nevertheless, while many Opinion Letters focus on specific legal issues specific to certain employers/businesses/industries, they are still valuable resources and may provide answers or guidance in many areas in wage and hour law.
More Defenses Available to Businesses. Opinion Letters were and continue to be another tool businesses have in their arsenal to help ensure compliance with the FLSA, and another tool in their defense arsenal. Specifically, Section 10 of the Portal-to-Portal provides businesses an affirmative defense to all monetary liability if the business can demonstrate it acted “in good faith and in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation” of the DOL Wage and Hour Division. See 29 U.S.C. § 259 and 29 C.F.R. Part 790.

In addition, Opinion Letters can be used to prove the “good faith” defense against the double liquidated damages penalty available under the FLSA, and the third-year of damages in the case of willful violations, of which the bar is extremely low. See 29 U.S.C. § 260. The availability of newly-issued Opinion Letters means that a business can request and obtain an Opinion Letter addressing a specific practice, policy, and/or factual circumstance for guidance and rely on a favorable Opinion Letter in response to a charge or lawsuit on the same issue.

This is a Good Thing. This is good news for businesses because it demonstrates two things: (1) businesses will be able to have and rely on additional resources to meet their statutory and regulatory wage and hour obligations; and (2) the Trump administration seems intent on turning back the clock to a time pre-Obama administration, but not necessarily instituting new guidance or interpretations (not in the labor and employment context at least). This means that businesses are likely already familiar with what they should be doing and have been doing it.

Written by Sara H. Jodka of Dickinson Wright PLLC.

For more Labor and Employment news go to the National Law Review’s Labor and Employment Page.

Obama Bans Drilling Offshore Atlantic, Arctic – But For How Long?

With a new President on the White House doorstep, President Obama has announced a ban – ostensibly permanent – on offshore oil and gas drilling in federal waters along the Eastern seaboard and offshore Alaska. President Obama appears to be relying upon a seldom-used provision of the 1953 Outer Continental Shelf Lands Act (“OCSLA”) 43 U.S.C. §§ 1331 et seq.), which allows the President to withdraw any “unleased lands of the outer Continental Shelf.” Whether the ban proves permanent is likely to be tested politically and legally, as the Trump Administration takes office alongside a Republican-controlled Congress.

OCSLA and the Authority to Ban

OCSLA mandates that the Secretary of the Interior expeditiously develop the resources on the submerged lands three or more nautical miles offshore the coast of the United States. The purpose of OCSLA is “to assert the exclusive jurisdiction and control of the Federal Government of the United States over the seabed and subsoil of the outer Continental Shelf, and to provide for the development of its vast mineral resources.” See S. Rep. No. 411 (June 15, 1953) (the “1953 Senate Report”). The Secretary implements the mandate through a leasing program that involves auctions in which developers compete to acquire OCS leases. The program is administered and enforced by the Bureau of Ocean Energy Management (“BOEM”), the Bureau of Safety and Environmental Enforcement (“BSEE”), and the Office of Natural Resources Revenue (“ONRR”).

Section 12(a) of OCSLA provides that “the President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the outer Continental Shelf.” 43 U.S.C.A. § 1341(a). In his announcement on December 20, President Obama indicated his intention to remove federal submerged lands in the Atlantic and Arctic from future leasing. Shortly after the November 2016 election, the Obama Administration had already removed any Atlantic and almost all Arctic lease sales from the auction schedule through 2022, but this announcement appeared to go further by triggering the President’s authority under Section 12(a) to withdraw certain OCS lands from the leasing program indefinitely.

Prior Leasing Moratoria

Historically, Congress has been the one to bar certain regions on the OCS from leasing, but Presidential withdrawals under Section 12(a) have also occurred. Congress first enacted a moratorium in 1982 as part of an appropriations bill, removing three-quarters of a million acres offshore California from federal leasing. Because appropriations bills only cover one fiscal year, the moratorium lasted only a year, but Congress passed new moratoria in subsequent years, generally for areas offshore California, but also in the North Atlantic and the Eastern Gulf of Mexico.

In 1990, President George H.W. Bush issued a Presidential statement – not expressly relying upon OCSLA Section 12(a) – to state his support for a moratorium on new leasing offshore most of California, Oregon, Washington, the North Atlantic, and the Eastern Gulf of Mexico. But the President limited the duration of the ban, setting it to expire in 2000 (or 1996 in the case of certain subareas offshore California). In 1998, President Clinton announced similar withdrawals through 2012, expressly on the basis of Section 12(a).

In January 2007, President George W. Bush modified President Clinton’s withdrawal by narrowing it, and in July 2008 he modified his own 2007 withdrawal and two prior withdrawals by President George H.W. Bush and President Clinton. He also threatened to veto any appropriations bill that sought to renew the Congressional ban. Without the votes to override the veto, Congress stopped banning offshore leasing, until Congress passed the Gulf of Mexico Security Act in 2006, which locked up most of the Eastern Gulf of Mexico until 2022.

As this history indicates, both Democratic and Republican Presidents have used Section 12(a) to ban leasing for periods of time that encroached on future Administrations (even before knowing the political persuasion of those later Administrations). Likewise, later Presidents have modified (in particular, narrowed) the withdrawals made by prior Presidents and have done so under the authority of Section 12(a).

The New Ban

President Obama has not yet publicly released the language by which he apparently intends to invoke Section 12(a), but his announcement leaves little doubt that it will cover much of the OCS offshore the Atlantic seaboard and Alaska. Moreover, it is clear that he intends the ban to be indefinite – that is, without a sunset date. Some proponents of the ban argue that the decision is irrevocable because Section 12(a) only works ‘one way,’ authorizing withdrawals but remaining silent about the rescission of withdrawals. Others may argue that Section 12(a) itself contemplates change, as it refers to decisions made “from time to time,” and in any event prior withdrawals have been modified numerous times in the past. Moreover, they may argue, an irrevocable ban would flout OCSLA’s imperative to develop the offshore for the nation’s benefit subject to balancing considerations of the environment, competition, and national defense. Inherent in this balancing mandate is that the balance must be struck anew from time to time, as the weight of the statutory considerations changes in the balance.

As with many of President Obama’s environmental and energy initiatives, we anticipate this latest move will be challenged in federal court and through political efforts in Congress, which penned the withdrawal authority in Section 12(a). As the recent presidential election has shown, the balance of power and policy can shift, from time to time.

ARTICLE BY Kevin A. Ewing & Michael Weller of Bracewell LLP
© 2016 Bracewell LLP

Executive Order Extends Workplace Anti-Discrimination Protections to LGBT Workers of Federal Contractors

Though it took longer than expected, President Barack Obama has signed an Executive Order extending protections against workplace discrimination to members of the lesbian, gay, bisexual, and transgender (“LGBT”) community. Signed July 21, 2014, the Executive Order prohibits discrimination by federal contractors on the basis of sexual orientation or gender identity, adding to the list of protected categories. It does not contain any exemptions for religiously affiliated federal contractors, as some had hoped. Religiously affiliated federal contractors still may favor individuals of a particular religion when making employment decisions.

The President directed the Secretary of Labor to prepare regulations within 90 days (by October 19, 2014) implementing the new requirements as they relate to federal contractors under Executive Order 11246, which requires covered government contractors and subcontractors to undertake affirmative action to ensure that equal employment opportunity is afforded in all aspects of their employment processes. Executive Order 11246 is enforced by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).

The Executive Order will apply to federal contracts entered into on or after the effective date of the forthcoming regulations. OFCCP likely will be charged with enforcement authority.

We recommend that employers who will be impacted by this Executive Order review their equal employment opportunity and harassment policies for compliance with the Executive Order. For example, employers who are government contractors should add both sexual orientation and gender identity as protected categories under these policies and ensure that mechanisms are put in place to ensure that discrimination is not tolerated against LGBT employees.

We will provide additional information and insights into the proposed regulations when they are available.

Article By:

Eric J. Felsberg

Michelle E. Phillips

Of:

Jackson Lewis P.C.

The President’s Methane Reduction Strategy – Here’s What Energy Companies Need to Know

President Obama recently released a Strategy to Reduce Methane Emissions (Strategy) that sets forth a multi-pronged plan for reducing methane emissions both domestically and globally. Domestically, the plan is to focus on four sources of methane—the oil and gas sector, coal mines, agriculture and landfills—and to pursue a mix of regulatory actions with respect to those sources. Energy companies now have the opportunity to help influence exactly what those actions will be.

For the oil and gas sector, the Strategy indicates that the federal government will focus primarily on encouraging voluntary efforts to reduce methane emissions—such as bolstering the existing Natural Gas STAR Program and promoting new technologies. But the Strategy also identifies two areas of potential mandatory requirements. First, later this year, the Bureau of Land Management (BLM) will issue a draft rule on minimizing venting and flaring on public lands. Regulated parties will have the opportunity to submit comments after the proposed rule is released. Second, the Strategy confirms that the Environmental Protection Agency (EPA) will decide this fall whether to propose any mandatory methane control requirements on oil and gas production companies. Consistent with that announcement, on April 15, 2014, EPA released five technical whitepapers discussing methane emissions from the oil and gas production process. The agency is soliciting comments on those whitepapers—they are due by June 16, 2014.

For coal mines, the Strategy indicates that BLM will soon be seeking public input on developing a program to capture and sell methane from coal mines on public lands. The Strategy further indicates that EPA will continue promoting voluntary methane capture efforts.

For landfills, the Strategy calls for public input on whether EPA should update its regulations for existing solid waste landfills, indicates that EPA will be proposing new regulations for future landfills, and indicates that EPA will continue to support the development of voluntary landfill gas-to-energy projects.

For agriculture, the Strategy does not suggest any new regulatory requirements. Instead, it indicates that EPA and the Department of Energy will work to promote voluntary methane control efforts and that those agencies will place special emphasis on promoting biogas—starting with the release of a “Biogas Roadmap” in June 2014.

In addition to these sector-specific approaches, the Strategy emphasizes the need for improved methane measurement and modeling techniques, both domestically and globally. All of the topics covered by the Strategy are ones about which regulated parties may want to submit comments—to EPA, BLM and/or the Office of Management and Budget.

Article by:

Jacob Hollinger

Jessica Bayles

Of:

McDermott Will & Emery

Tag: Obama