U.S. DOL Opinion Letters: Delaying FMLA Leave, Clarifying FLSA Exceptions, and Applying HSAs to Garnishments

The U.S. Department of Labor (DOL) recently released three opinion letters addressing the Fair Labor Standards Act, Family and Medical Leave Act, and the Consumer Credit Protection Act.  These opinion letters are issued by the Wage and Hour Division and interpret how laws can be applied in specific situations posed by the letter’s requester, and serve as helpful guidance for employers.

Letter FLSA2019-13 addresses the meaning of the phrase “not less than one month” for the purpose of measuring a representative period requirement.  Retail or service establishments may claim an overtime exemption under the FLSA if more than half of an employee’s compensation for a “representative period (not less than one month) … represent[s] commissions on goods or services.”  The letter seeks clarity on what time periods (such as four weekly or two bi-weekly pay periods) may qualify as “not less than one month.”  The opinion letter clarifies that the representative period must be a calendar month.  Therefore, a measurement such as four weekly pay periods does not necessarily meet the exemption requirement (except in February of a common year).  Representative periods that break across a single month (such as utilizing six consecutive weekly or three bi-weekly pay periods) meet the “not less than one month” criteria, even if the time period does not capture all the days in a single month.

Letter FMLA2019-3-A addresses whether an employer may delay designating paid leave as FMLA time off due to a collective bargaining agreement (CBA).  In this scenario, the employer is a government public agency whose employees are subject to a CBA that grants job protection when utilizing employer-provided paid leave.  Previously, employees were able to delay taking unpaid FMLA leave until the CBA-protected paid leave is exhausted; however, according to a prior opinion letter (FMLA2019-1-A), the employer had begun designating all leave as FMLA leave.  The opinion letter confirms that employers must designate leave as FMLA as soon as they have obtained enough information to determine if a leave request qualifies as FMLA, and designation cannot be delayed or declined by either employee or employer.

Letter CCPA2019-1 addresses whether or not an employer’s contributions to employee health savings accounts (HSA) constitute as earnings for the purposes of wage garnishments.  The letter clarifies that the Consumer Credit Protection Act (CCPA) limits the amount of a debtor’s disposable earnings that can be withheld from an employee’s pay.  The letter makes distinctions between employer contributions to HSAs and other types of compensation (e.g., wages, salaries, commissions).  As a result, employer contributions to HSAs are not earnings under the CCPA and are not subject to the garnishment limitations.  Employers should not include employer HSA contributions when calculating an employee’s disposable earnings for the purpose of determining the maximum amount of pay that may be garnished.

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