HR Tip: DOL issues three opinion letters and fact sheet

After a long hiatus, the Department of Labor (DOL) has begun issuing opinion letters to assist employers and employees in interpreting laws.The first opinion letter, FLSA2018-18 addresses how employees without “normal working hours” should be compensated for travel time involving an overnight stay.

The letter provides two methods for determining an employee’s normal work hours and whether travel time is compensable. The employer may review the employee’s time records during the most recent month of regular employment and use the average start/end times during that time period. Employers also may negotiate with the employee or employee’s representative and agree to what constitutes the employee’s normal work hours.

The second letter addressed a situation in which an employee needs to take a 15-minute break every hour in an 8-hour workday due to a serious health condition (supported by medical certification). Most meal and rest break rules are governed by state law; federal law does not require meal or rest breaks for adult employees. However, for employers that offer short breaks (up to 20 minutes), the Fair Labor Standards Act does require employers to pay employees for that time and count that time as hours worked when calculating overtime pay.

In FLSA2018-19, the DOL clarifies that eight rest breaks given by an employer to accommodate an employee’s serious health condition predominantly benefit the employee and are not compensable as a result. However, these employees must be compensated for the same number of breaks taken by co-workers.

The third letter, CCPA2018-NA, considers whether certain lump-sum payments are considered “earnings” for purposes of the garnishment limitation in Title III of the Consumer Credit Protection Act (CCPA). The letter specifically analyzes 18 types of lump-sum payments and specifies that lump-sum payments for workers’ compensation, insurance settlements for wrongful termination, and buybacks of company shares do not constitute “earnings” under the CCPA.

Higher education fact sheet

While cautioning that job titles alone are not enough to determine if someone fits within a white-collar exemption, the fact sheet on higher education and overtime pay under the FLSA states that a faculty member who teaches online or remotely may qualify for the exemption for teachers. This includes part-time faculty. Athletic coaches at colleges and universities also may qualify for the exemption, but not if their primary duties are recruiting.

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HR Tip: Failure to pay for pre-shift work can be costly

A recent settlement in a class-action lawsuit, Tompkins v. Farmers Insurance Exchange, is a reminder to all employers about the obligation to pay for pre-shift work under the Fair Labor Standards Act (FLSA) and state laws. A federal court approved a $775,000 settlement for Farmers Insurance’s alleged failure to compensate auto claims representatives, appraisers, and adjusters in several states for pre-shift work.

The alleged unpaid activities included starting up computers and accessing Farmers’ software applications, obtaining daily assignments, determining the locations the workers would need to visit, mapping routes, contacting customers and auto repair facilities, downloading required forms and gathering paperwork, as well as traveling to the workers’ first appointments of the day. The settlement, which was approved by the U.S. District Court for the Eastern District of Pennsylvania, granted both the FLSA collective action and state law class claims and covers nearly 400 current and former employees.

Employers are reminded that activities before the official time a shift begins are compensable if they include tasks the worker is employed to perform or are an “integral and indispensable part of” the job and include mandatory pre-shift meetings. Employers should review policies and practices regarding compensation for pre- and post-shift work, as well as educate managers about the wage laws that require payment for all hours worked.

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Top 10 Workplace Trends in 2017

Performance Management tops the list

The Society for Industrial and Organizational Psychology (SIOP) asked its members – who study workplace issues of critical relevance to business, like talent management, coaching, training, organizational development, and work-life balance – about their predictions for 2017. Topping the list of top ten is the changing nature of performance management.

While much has been written about companies ending annual performance reviews and ratings, it’s unclear what will take its place. The group predicts, “Organizations can expect to rely less on once-a-year performance appraisals and more on frequent feedback and coaching to put the focus on improving performance. Strategies, such as continuous performance management, will lead to a greater emphasis on real-time feedback, daily manager-employee relationships and an increased need for managers to acquire the skills to coach and deliver timely feedback to employees.”

For the Top 10 Workplace Trends for 2017

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Truckers’ medical conditions can increase crash risk

Commercial truck drivers who have at least three health issues can quadruple their crash risk compared to healthier drivers, according to a study from the University of Utah School of Medicine. Researchers examined medical records for nearly 50,000 commercial truck drivers, 34 percent of whom had signs of one or more health issues associated with poor driving performance, such as heart disease, low back pain and diabetes.

The crash rate involving injury among all drivers was 29 per 100 million miles traveled. The rate rose to 93 per 100 million miles traveled for drivers with at least three ailments. Researchers took into account other factors that can impact driving abilities, such as age and amount of commercial driving experience.

The study was published online Jan. 10 in the Journal of Occupational and Environmental Medicine.

Employee takeaway: It is well documented that truck drivers often have difficulty staying healthy because they tend to sit for long periods of time and sleep and eat poorly. With the industry facing a critical shortage of drivers, employers need to do all they can to keep their drivers healthy. There are a host of tools available to help drivers, including smart phone apps with guidance about nutrition and exercise on the road, customized in-house wellness programs, bio-screenings, coaching, sleep apnea testing and treatment, encouraging brown bagging and walking or bicycling during breaks, and so on. Some companies are ramping up their new-hire pain diagnostics, so they have a baseline for whether a new driver has pre-existing muscle pain. In an industry of high turnover and high claims, this puts the driver on notice and effectively deters claims.

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HR Tip: Emerging employment issues top EEOC priorities

The EEOC recently announced its updated Strategic Enforcement Plan for fiscal years 2017-2021. The new plan continues the priorities outlined in the plan for 2013-2016 but adds two areas to the previous “emerging issues” priority. Those additions encompass:

  • “Issues related to complex employment relationships of the 21st century workplace,” specifically focusing on temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy; and
  • “Backlash discrimination against those who are Muslim or Sikh, or persons of Arab, Middle Eastern or South Asian descent, as well as persons perceived to be members of these groups.”

While a Trump presidency will undoubted impact how the EEOC pursues its enforcement agenda and the resources it has available, historically, the agency has pushed its enforcement priorities.

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Things you should know

DOL overtime rule on hold

In late September 2016, 21 states led by Texas and Nevada, along with the U.S. Chamber of Commerce and other business groups, challenged the new overtime exemption rule and sought a nationwide injunction preventing the rule from taking effect. The states argued that the DOL unconstitutionally overstepped its authority and took issue with the policy behind the rule change, arguing that salary level alone does not reflect the type of work an employee performs, and that the DOL’s regulation disregarded the text of the FLSA by imposing a salary threshold without regard to whether an employee actually performs bona fide executive, administrative or professional duties.


Workplace injuries decline in private sector

The number and rate of nonfatal workplace injuries and illnesses in the private sector declined last year, according to a Bureau of Labor Statistics (BLS) report. Private industry employers reported about 2.9 million nonfatal workplace injuries and illnesses in 2015, representing a decline of about 48,000 from 2014, despite an increase in total hours worked. The rate of cases recorded was 3.0 cases per 100 full-time workers, down from 3.2 in 2014. Nearly 2.8 million, or 95.2%, of the cases were injuries, with 75% of these injuries occurring in service-providing industries and the other 25% occurring in goods-producing industries.

Workplace illnesses accounted for the other 4.8% of the cases reported by private industry employers in 2015, with service-providing industries accounting for 64.7% of illnesses and goods-producing industries accounting for 35.4%, according to the report. Wholesale trade was the only sector with an increase in the rate of injuries and illnesses in 2015, rising from 2.9 cases in 2014 to 3.1 cases in 2015.

Important to note: More than half of the nonfatal injury and illness cases involved days away from work, job transfer, or restriction, according to the report.


Workers’ comp medical severity dips for the first time in two decades

Workers’ compensation medical severity fell about 1% from 2014 to 2015, marking the first time that medical severity has fallen since 1994, according to a report released by the National Council on Compensation Insurance Inc. (NCCI). A 3% decline in physician service utilization was “a major driver” in lower workers comp medical severity, which some attribute to more insured workers under the ACA. The mix of injuries covered under workers’ comp has remained stable between 2012 and 2015, with musculoskeletal and connective tissue injuries comprising the majority of workers’ comp medical payments each year.

The study concluded that prescription drug costs continue to represent a “significant portion” of medical costs, and “one of the most active subjects” of workers’ compensation-related legislative activity. For every $100 paid for medical services to workers injured in 2014, $17 was for prescription drugs. For claims older than 10 years, the prescription amount rises to 45% to 50%. The study did not include three of the four highest-population states – California, Texas and New York.


Health care law not limiting workers’ comp doctor access

According to a report released by the NCCI, a study of the first full year of the impact on workers’ compensation of the health care law found that the law has not limited workers’ comp claimants’ access to doctors. The report, “Impacts of the Affordable Care Act on Workers Compensation,” used medical data from workers’ compensation claims from 2012 to 2014 to compare primary care utilization per claim. The timeline included the first year of expanded medical insurance under the national healthcare reform law.


Workers in stressful, low-control jobs have higher risk of early death: study

Workers in high-stress jobs who have little control over workflow and other key decisions are at a higher risk of dying early, according to a study from Indiana University’s Kelley School of Business. Researchers examined a seven-year, longitudinal sample of 2,363 Wisconsin residents in their 60s who worked high-demand jobs. They found that workers in “low-control” jobs had a 15 percent higher risk of death. In contrast, workers in “high-control” positions had a 34 percent lower risk of death.


CDC resource to help reduce smoking

To help combat the use of tobacco in the workplace, the CDC foundation is offering resources in the latest edition of Business Pulse. Included are an infographic and a Q&A with Corinne Graffunder, director of CDC’s Office on Smoking and Health.


Communication tower association releases video on anchor corrosion

A new safety video from the National Association of Tower Erectors highlights the conditions and factors that contribute to anchor corrosion on guyed towers.


Workplace weight management lowers costs, improves quality of life

Employees who participate in a workplace weight management program-even those without significant weight loss-have reduced health care costs and improved quality of life (QOL), reports a study, Effect of workplace weight management on health care expenditures and quality of life, in the November Journal of Occupational and Environmental Medicine, official publication of the American College of Occupational and Environmental Medicine (ACOEM).


State news
Florida – Workers’ comp attorney fees jump after high court ruling

A recent Florida Supreme Court decision has caused workers compensation attorney fees to increase 22% in the state, according to the NCCI. The average Florida workers’ comp claimant attorney fee per award was $4,978 between May and September 2016, compared with $4,095 for May through September 2015.


Pennsylvania battles opioid addiction crisis with slate of new laws

Legislation, including five separate bills that will go into effect within the coming months, is aimed at the opioid crisis. Among the new laws is the Safe Emergency Prescribing Act – House Bill 1699 – which prohibits hospital emergency rooms and urgent care centers from prescribing opioids for longer than seven days and bans refills for opioid prescriptions.

Senate Bill 1202, which amends Pennsylvania’s Achieving Better Care by Monitoring All Prescriptions Program Act, requires continuing education for medication prescribers and dispensers related to pain management, addiction and dispensing, and requires prescribers use of the prescription drug monitoring database every time they prescribe an opioid or benzodiazepine.

Three other bills will now require more training on pain management in medical schools, restrict the ability to prescribe opioids to minors and permit certain facilities to serve as drop-off locations for unused prescription drugs. provides a summary of the five bills.

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DOL guidance on misclassification stresses most workers are employees

The classification of independent contractors vs. employees has been a hot topic for years and most recently has been fueled by the on-demand economy represented by such services as Uber and Homejoy. In today’s workplace, there are many situations where the distinction between employee and contractor is blurred and it’s difficult for employers to draw the line.

However, the Department of Labor (DOL) clearly believes an increasing number of workplaces are misclassifying employees as independent contractors and has issued new guidance, a fifteen-page memorandum that explains how to determine whether a worker is an employee or an independent contractor, including examples of real-life workplace situations. It is not a change in policy, but stresses that “most workers are employees under the [Fair Labor Standards Act]’s broad definitions” and thus entitled to the legal benefits associated with employee status.

Many employers rely too heavily on the “control test” when determining whether or not a worker is truly an “employee”. The current guidance significantly downplays the “control test” and focuses instead on the “economic realities test, “which looks at whether the worker is economically dependent on the employer or in business for him or herself.

Some recent high-profile cases include FedEx Corp, Uber, and Homejoy. The 7th U.S. Circuit Court of Appeals in Chicago recently ruled that FedEx Corp. drivers in Kansas are employees, not independent contractors and FedEx also settled in California for $228 million. Uber is appealing a recent San Francisco decision and Homejoy, a home-cleaning service, opted to close after they were hit with a lawsuit for misclassifying workers.

It’s not just major companies that are affected. Recently, the 3rd U.S. Circuit Court of Appeals in Philadelphia in Mikael M. Safarian v. American DG Energy Inc. et al. said a lower court should have considered “economic realities” in determining whether an engineer who worked for an energy company was an independent contractor rather than an employee. The majority noted, it is the economics of the relationship…not the structure of the relationship, that is determinative.

Six factors

The DOL reminds employers that in conducting an economic realities test, an employer should look at six factors:

  • The extent to which the work performed is an integral part of the employer’s business
  • The worker’s opportunity for profit or loss depending on his or her managerial skill
  • The extent of the relative investments of the employer and the worker
  • Whether the work performed requires special skills and initiative
  • The permanency of the relationship
  • The degree of control exercised or retained by the employer


No single factor is determinative and the “outcome must be determined by a qualitative rather than a quantitative analysis.” In a Society for Human Resource Management article (SHRM), DOL Narrows Independent Contractor Classification, Matthew Disbrow, an attorney with Honigman in Detroit was quoted: “The subjective nature of the DOL’s interpretation, and its narrow focus on ‘economic dependence,’ creates substantial challenges for companies who wish to maintain their independent-contractor relationships.”

Some of his suggestions include:

  • Use independent contractors sparingly
  • Entering into independent contractor agreements or hiring a business entity (rather than a person) does not necessarily protect you from liability under the Fair Labor Standards Act
  • Review the type and scope of work carefully before engaging the services of any nonemployee
  • When entering into agreements with other service providers, obtain appropriate indemnification provisions to protect the company from the wage and hour claims of the service provider’s workers
  • Maintain basic records on the independent contractor determination process, and the facts used to make that determination such as business licenses, business cards, contractor tax records, project work plans showing limited engagements and correspondence from the contractor
  • Avoid giving contractors rights or access that cut against contractor determination, such as internal e-mail accounts, server access, and invitations to employee functions


Employer takeaway

While there was nothing significantly new in the administrative interpretation, it is a harbinger of things to come and serves as a warning of the agency’s commitment to pursuing misclassification cases. Employers should take a much closer look at their contractor classifications, knowing that it’s going to be a priority on the federal level.

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Author | Speaker | Certified Risk Manager | Certified Work Comp Advisor