Source: https://www.lawandtheworkplace.com/2018/08/usdol-issues-four-new-flsa-opinion-letters/
Timestamp: 2019-04-20 14:11:25+00:00

Document:
Summer’s not over yet! On August 28, 2018, the U.S. Department of Labor issued four new letters in response to requests for opinions under the Fair Labor Standards Act. In this most recent slate of letters, the DOL offers guidance on compensable time, the retail sales exemption, volunteers, and the motion picture theater exemption.
In FLSA2018-20, the DOL concluded that an employer need not pay an employee for time spent voluntarily participating in certain wellness activities, biometric screenings, and benefits fairs, whether during or outside of regular working hours.
Citing Supreme Court and Second Circuit precedent, the DOL explained that compensability of an employee’s time depends on whether the time is spent predominantly for the employer’s benefit or for the employee’s benefit. Because the activities at issue in the opinion letter predominantly benefit the employee, they do not constitute compensable worktime under the FLSA.
Interesting… The DOL also viewed the time spent in such activities as non-compensable “off duty” time under the FLSA regulations (29 C.F.R. § 785.16)—periods during which employees are completely relieved from duty and which are long enough to enable them to use the time effectively for their own purposes. This is notable, because under other rules governing the compensability of certain time, the mere fact that the activity occurs during regular working hours—as opposed to outside of regular working hours—is by itself sufficient to obligate the employer to pay for the time, even if attendance is purely voluntary and the activity is not job-related. See 29 C.F.R. § 785.27 (regarding attendance at lectures, meetings, training programs, and “similar activities”). By contrast, time spent in the wellness activities, biometric screenings, and benefits fairs described in FLSA2018-20 is not compensable regardless of whether the activities occur during regular working hours.
In FLSA2018-21, the DOL concluded that a company that “sells a technology platform to merchants that enables online and retail merchants to accept credit card payments from their customers from a mobile device, online, or in-person” is a “retail or service establishment” for purposes of the “retail sales” exemption in Section 7(i) of the FLSA.
The second and third prongs of the exemption are fairly straightforward (although there is sometimes ambiguity over what “representative period” should apply to the analysis). Analyzing the first prong—whether or not the employee works at a “retail or service establishment”—has become increasingly more complicated as the retail sales industry has evolved from a landscape of “brick and mortar” businesses to a platform driven by technology and e-commerce.
Under federal regulations, to qualify as a “retail or service establishment,” (1) a company must “engage in the making of sales of goods or services”; (2) “75 percent of its sales of goods or services, or of both, must be recognized as retail in the particular industry”; and (3) “not [more than] 25 percent of its sales of goods or services, or of both, may be sales for resale.” See 29 C.F.R. § 779.313.
On these facts, the DOL concluded that the company satisfied the definition of “retail or service establishment” under 29 U.S.C. § 207(i).
In FLSA2018-22, the DOL concluded that members of a nonprofit organization who serve as “examination graders” for a one-to-two week period can be classified as volunteers instead of employees if they do not receive a fee for their services.
Applying these principles to the somewhat unique facts in FLSA 2018-22, the DOL concluded that the NPO could properly classify the graders as volunteers under the FLSA—provided they were not receiving a fee for their services.
Interesting… The DOL also concluded that the NPO could continue to pay for the graders’ travel, lodging, meals, and other expenses incidental to volunteering without undermining their volunteer status.
In FLSA2018-23, the DOL concluded that the “motion picture theater exemption” in Section 13(b)(27) of the FLSA applies to the food service operations of motion picture theaters.
At issue are motion picture theaters that provide in-theater dining, including through on-site, full-service restaurants. Patrons must purchase a movie ticket to eat at the on-site restaurants. The food service operations are not separately incorporated and do not operate in any way as separate entities. They do not have separate entrances, operate under different names, file separate taxes, maintain separate bank accounts, place orders separately, pay invoices separately, or use separate bank accounts. At each location, the primary revenue source is the sale of movie tickets.
Theater staff use a single kitchen to prepare food for both the in-theater and full-service dining. The same servers and food runners serve both the in-theater and full-service dining areas. Food service staff also work as theater ushers and vice versa, and all employees are cross-trained to work in any position at each location. Each location uses the same payroll for both its theater staff and food service staff, and it does not separately keep their time and payroll records. The same general manager supervises all employees, although different locations might have assistant managers or team supervisors.
The FLSA exempts from its overtime requirements “any employee employed by an establishment which is a motion picture theater.” 29 U.S.C. § 213(b)(27). To qualify as a “motion picture theater,” the establishment must be “a commercially operated theater primarily engaged in the exhibition of motion pictures.” 29 C.F.R. § 779.384. The DOL has historically taken the position that theaters will meet the “primarily engaged” requirement when devote at least 50% of their available presentation time to presenting motion pictures. It is the “nature of the employer’s business, not the work performed by a particular employee,” that determines whether establishment-based exemptions apply.
As the DOL explains, business units on the same premises may constitute separate establishments—provided they are (1) physically separated, (2) “functionally operated as separate units having separate records, and separate bookkeeping,” and (3) have “no interchange of employees between the units.” Unless each of these three conditions is satisfied, the business units will be treated as a single establishment for purposes of the FLSA exemptions. Applying these principles, the DOL concluded that the theater and food service operations at issue operate as a single establishment for purposes of the motion picture theater exemption.
Opinion Letters Provide Safe Harbors!
DOL opinion letters don’t just make for interesting reading. Thanks to FLSA amendments in the Portal-to-Portal Act of 1947, opinion letters provide important defenses to employers facing wage and hour claims or investigations.
Subscribe to our wage and hour blog for up-to-date information on the latest issues and developments affecting employers.

References: § 785
 § 785
 § 779
 § 207
 § 213
 § 779