FLSA Clean-Up Regulations. Final Rule, effective May 5, 2011. Updated regulatory examples to reflect the $7.25 minimum wage Revised regulations to address 1996 Amendments Use of employer vehicle for home to work travel Youth Opportunity Wage, $4.25 hour
Final Rule, effective May 5, 2011 • Updated regulatory examples to reflect the $7.25 minimum wage • Revised regulations to address 1996 Amendments • Use of employer vehicle for home to work travel • Youth Opportunity Wage, $4.25 hour • Tip credit changes and clarifications (also includes clarifications of 1974 and 1977 amendments)
More changes • Changed percentage limitation on water that can be used for non-ag purposes and still have ag exemption apply to certain irrigation workers (1997 amendment) • Added non-employee status of volunteers at private non-profit food banks (1998 amendment) • Revised definition of firefighter (1999 amendment)
More updates • Stock options excluded from regular rate (2000 amendment) • 13b10 – adds language that includes boat sales exemption. Does not change regulation to include service writers, service advisors and service salesmen and “salesmen” for reasons stated in the preamble (76 FR 18838)
Considered but not adopted • Changes to meal credit language to allow for employer-provided meals which are not accepted. • Final rule indicates further study is needed to consider religious and dietary restrictions, and • Whether time provided for meal is adequate • 7(o) (5), Reg 553.25(d) use of comp time by public employees – “unduly disruptive” – current language remains
Fluctuating workweek • Preamble indicates that bonuses and other non-overtime premiums are inconsistent with the “fixed salary” concept required for use of the fluctuating workweek. (76 FR 18850) Regulatory language left unchanged.
Details of Changes Made • 4.167 – Tipped wage corrected to current statutory language, i.e. maximum tip credit is current FLSA MW minus $2.13. Tip credit cannot exceed tips received. All tips must be retained by tipped employees (or a valid pool). Employer must notify employee of tip credit provisions. • 516.28(a)(3) – Records – Amount of tip credit to be shown in records, not to exceed difference between current MW and $2.13.
Details of Changes Made (cont.) • 531.7 – Removed. Current statute does not provide for an employee to request DOL review of tip credit claimed. Rather, employer must be able to demonstrate that amount claimed is not more than the tips received. • 531.36 – Examples changed with minor rewording to remove references to out of date minimum wage. • 531.37 – Examples with outdated minimum wage are removed. Examples with out of date technologies are removed.
Tipped Employees • 531.50 through 531.60 is now designated as Subpart D – Tipped Employees. • 531.50 picks up the technical changes • Minimum cash wage $2.13 • Max tip credit = MW - $2.13 • Tipped employee must be in an occupation that earns more $30 per month in tips • Other references to $20 per month in tips are updated to $30 per month
531.52 – Very important • Clarifies that tips are the property of the tipped employee whether or not tip credit is taken • Tips may not be used by the employer for any reason other than taking a credit against minimum wage • Only tips received by an employee as money belonging to the employee may be counted in determining whether the employee is a “tipped employee” and in applying the tip credit provisions.
531.54 Tip pooling • Clarifies that there is no maximum percentage which employees may be required to contribute to a tip pool • However, employer must notify the employees of any required tip pool contribution, and tip credit may only be taken for the tips ultimately received by an employee • Employer may not retain any of the tips for any other purpose
Other tip credit changes • Updates 531.55 to eliminate superfluous language • 531.56(d) & 531.60 updated to reflect new tip limitation removing old 50% language • 531.59(b) clarifies that tip credit only applies to hours spent in tipped occupation. • 531.59(b) also contains the provision that the employer must notify the employee of the tip credit; what must be contained in such notice; that the employer must be able to demonstrate that the amount of tip credit claimed is not excessive; and that the employer is required to pay any minimum wage deficiency.
Reg 553. State and Local • Any “employee in fire protection activities” replaces “firefighter.” • Picks up new definition in FLSA 3(y) • 553.212 removes 20% non-exempt work limitation from employees in fire protection activities
FLSA 3(y) Definition • “Employee in fire protection activities” means an employee, including a firefighter, paramedic, emergency medical technician, rescue worker, ambulance personnel, or hazardous materials worker, who — • (1) is trained in fire suppression, has the legal authority and responsibility to engage in fire suppression, and is employed by a fire department of a municipality, county, fire district, or State; and • (2) is engaged in the prevention, control, and extinguishment of fires or response to emergency situations where life, property, or the environment is at risk.
Must be employed by a fire department • Note that the EMS employees or HAZMAT team workers who are not employees of a fire department will not qualify for the exemption.
778 Overtime revisions • 778.110, .111, .113 and .114 have example which use rates that are now higher than the current minimum wage. • 778.114 also has an example showing that the full salary is due to a fluctuating workweek employee when less than 40 hours are worked.
Stock option exclusion • 778.200 now list the stock option exclusion as one of the regular rate exclusions • 778.200(b) is updated to current statutory language • 778.208 now indicates there are 8 exclusions from regular rate instead of 7.
Reg. 779 updates • 779.371 adds boat dealers to 13(b)10 list of potentially exempt establishments. • 779.372 is updated to add boat dealers, and to show that the OT exemption applies only to salesmen at boat, trailer or aircraft selling establishments.
780 Agriculture • Adds new 13(b)12, which eliminates older language requiring that water be used exclusively for agricultural purposes. • New language – exemption applies to “any employee employed in agriculture or in connection with the operation or maintenance of ditches, canals, reservoirs, or waterways, not owned or operated for profit, or operated on a sharecrop basis, and which are used exclusively for supply and storing of water at least 90 percent of which was ultimately delivered for agricultural purposes during the preceding calendar year.”
780.408 Non-Ag water • Explains the 10% limitation on non-ag water usage. • If 10% or more of the water is supplied to a municipality for general use, the exemption is lost.
785 Hours Worked and 790 Portal to Portal Act provisions • 785.7 corrects a typo in the original – changes “of” to “and: • 785.9, .34 , .50 and 790.3 are updated to reflect the language in the Employee Commuting Flexibility Act, allowing use of an employer’s vehicle for commuting within the normal commuting area, without adding to hours worked, subject to agreement by the employee or the employee’s representative.
786 Miscellaneous Exemptions and Exclusions from Coverage • 786.300 – Youth Opportunity Wage Provisions are added to the Regs. • $4.25 for hour for 1st 90 calendar days with the employer • Employee is under age 20 • Other employees may not be displaced
786.350 Volunteers at private non-profit food banks • Excluded from the definition of employee.