The Department of Labor (DOL) recently published 6 new opinion letters offering guidance on employee classification, bonuses, overtime exemptions, and family medical leave.
In Part 2, MNK Law covers mandatory roll call and commission-earning employee questions that the DOL answers.
Mandatory Roll Call
Issue: A 911 county dispatch unit works under a collective bargaining agreement (CBA) and typically works less than 2,080 hours of a full-time work per year. The county and union are considering a CBA proposal that would establish a mandatory 15-minute roll call prior to each scheduled shift to bring employees closer to 2,080 hours per year. Under the proposal, the roll call would be considered “hours worked” but wouldn’t be included in overtime calculations.
Question: May a collective bargaining agreement require a 15‑minute pre‑shift roll call and classify the time as “hours worked” yet exclude that period when determining overtime premiums under the FLSA?
Takeaway: The DOL confirmed the mandatory “roll call” time should be counted as hours worked and therefore counted when determining overtime. However, there are two possible overtime exclusions that may be considered:
- According to FLSA 7(b)(1), if the employee is under a CBA that’s certified as “bona fide” by the National Labor Relations Board (NLRB), the employer must pay overtime for all hours worked over 12 in a day or over 56 in a week, and the employee will work no more than 1,040 hours in any consecutive 26-week period.
- Under to FLSA 7(b)(2), a partial overtime exemption may apply if the CBA includes specific provisions, such as clearly defined pay rates for all hours worked or guaranteed, a guaranteed number of hours over a 52-week period (typically between 1,840 and 2,080), a maximum limit of 2,240 total hours, and overtime pay for hours exceeding both the weekly 40‑hour threshold and the guaranteed hours, as well as hours above 2,080 in the 52‑week period
Commission-Earning Employees
Issue: An employer runs a restaurant in a state where the state minimum wage is higher than the federal rate. The state also has its own tip credit law. The servers and server assistances are classified as exempt from overtime under FLSA §7(i), which applies to employees who are paid commissions, and those who receive service charges for banquet work. The employees also receive tips from customers.
Question: Must an employer in a state with a higher minimum wage than the federal minimum wage use the federal rate or the higher state rate to satisfy the minimum pay requirement in FLSA §7(i)(1), and are tips considered compensation when determining under §7(i)(2) whether more than half of an employee’s earnings come from commissions?
Takeaway: The DOL confirmed the minimum pay standard in FLSA §7(i)(1) is satisfied by a qualifying retail or service establishment employee who is paid 1.5x the federal minimum wage, not a higher state minimum wage. As for tips, they may or may not be counted as compensation under §7(i)(2) since tips are considered “a sum presented by a customer as a gift or gratuity in recognition of some service performed for the customer.” A portion of the employee’s tips may be considered “compensation” when the employer relies on tips to meet federal, state, or local wage obligations.
Conclusion:
These new DOL opinion letters reinforce two important points for employers: how “hours worked” should be defined and applied when calculating overtime in a CBA, and what minimum pay requirements apply when federal and state standards differ for commissioned employees who also receive tips. Employers whose circumstances resemble those addressed in these letters should seek guidance from legal counsel.
If you need more information on this topic, please contact us at info@mnklawyers.com.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.
