News & Announcements

New FLSA Opinion Letters from WHD

Posted Thursday, June 25, 2020 2:45 pm

The Wage and Hour Division of the U.S. Department of Labor (“WHD”) issued five new opinion letters pertaining to the Fair Labor Standards Act (“FLSA”).

  • FLSA2020-6 finds that salespeople who regularly travel to different locations to sell products using their employer’s truck qualify for the outside sales exemption.
  • FLSA2020-7 indicates that in determining whether an automobile manufacturer’s direct payments to an automobile dealership’s employee, compensating the employee for work done on behalf of the dealership as part of an incentive program, may count toward the dealership’s minimum wage obligation to the employee, the WHD looks at: (1) the agreement between the parties (which may be explicit or implied by the particulars of the incentive program), (2) the understanding and practices of the parties, and (3) any other relevant circumstances.
  • FLSA2020-8 addresses whether salespeople who set up displays and perform demonstrations to sell the employer’s products at various third-party retail locations, qualify for the outside sales employee exemption.  The WHD indicates that salespeople qualify for the exemption only if their primary duty is performing sales work directed toward the consummation of their own sales.  Those salespeople whose sales work results in sales for the third-party retailer do not qualify.
  • FLSA2020-9 addresses whether emergency-management coordinators employed by a county government qualify for administrative exemptions under Section 13(a)(1) of the FLSA.
  • FLSA2020-10 addresses the situation where an employer attempts to use the overtime exemption for a retail or service establishment in Section 7(i) of the FLSA where there is no prior established representative period, but more than half of an employee’s compensation ultimately does not consist of commissions.  The WHD explains that if an employer chooses to do this and, at the conclusion of that initial representative period, Section 7(i)’s requirement that commissions constitute more than half of compensation for a representative period has not been satisfied, the employer must pay overtime premium compensation for any overtime hours worked during that period.

An opinion letter is a written opinion by WHD on how a particular law applies to the specific facts presented by the person or entity requesting the letter.  Employers can visit this webpage to learn how to request an opinion letter or determine whether existing agency guidance already addresses their questions.

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