Department of Labor Issues Opinion Letters on Compensable Time, Garnishment Limitations

Michael P. Cianfichi
Published April 18, 2018

The Wage and Hour Division of the U.S. Department of Labor issued three opinion letters on April 12, 2018, on the topics of compensation for health-related breaks under the Fair Labor Standards Act, compensation for travel time for hourly workers under the FLSA, and what types of lump-sum payments can be garnished under the Consumer Credit Protection Act. Opinion letters give the WHD the opportunity to provide guidance on specific questions received from the business community. DOL Secretary Acosta revived the practice of issuing opinion letters earlier this year, nearly ten years after the DOL under the previous administration stopped issuing guidance letters with a preference instead for issuing more general administrative interpretations.

The opinion letter on health-related breaks responded to the question of whether employers must compensate non-exempt employees for 15 minute breaks that are certified by a health care provider due to the employee’s serious health condition and required under the Family Medical Leave Act. The WHD answered that no, employees are not entitled to compensation for FMLA required breaks for two main reasons. First, the FMLA states that FMLA protected breaks can be unpaid. Second, the Supreme Court has stated that employers must only compensate employees for breaks that benefit the employer, like 20 minute rest breaks that help reenergize the employee. Breaks that are required because of an employee’s serious health condition only benefit the employee, and not the employer, and therefore do not entitle the employee to compensation.

The opinion letter on compensation for travel time answered the question of when hourly repair technicians must be compensated for their travel time between job sites or to training sessions. For travel to training sessions, the WHD wrote that if the travel occurs during the employee’s normal working hours, the time is compensable. Time spent traveling to a training session that occurs outside of normal working hours (such as a Sunday night flight) would not  be compensable (nor would time spent traveling from a hotel to the training session, because that time would be considered part of a normal commute). Time that hourly workers spend traveling between two job sites during working hours, however, is compensable time under the FLSA.

The final opinion letter, on garnishing lump sum payments, answered a question on what types of lump sum payments by an employer (such as bonuses, referrals, severances, and commissions) can be garnished subject to the Consumer Credit Protection Act for child support payments.  The CCPA limits the amount of an employee’s disposable income that can be garnished for obligations such as child support. The CCPA limits only apply to “disposable earnings,” a term on which the question sought clarification. The WHD responded that the determining factor for whether lump-sum payments are disposable earnings subject to the CCPA hinges on whether the employer paid the amount in question for the employee’s services. For example, because a lump-sum bonus or severance payment is compensation for personal services rendered by the employee for the employer, those payments are subject to the CCPA. In contrast, lump-sum payments to employees resulting from the employer’s buyback of company shares do not relate to the employee’s personal services and are therefore not subject to CCPA garnishment limitations.

Given the new Secretary’s preference for utilizing opinion letters to provide guidance to the business community, we should expect more letters to be issued throughout this administration. A full list of the other opinion letters issued earlier this year can be accessed through the WHD website.