Department of Labor, Fair Labor
Standards Act (FLSA) Opinion Letter FLSA2005-52
This is an opinion letter from The DOL specifically
addressing houseparents. It is taken from the DOL website and is
public domain. I thought there might be some houseparents that find it
interesting.
November 14, 2005
FLSA2005-52
Dear
Name*,
This is in response to your letter addressed to Kristine Iverson, Assistant
Secretary for Congressional and Intergovernmental Affairs, on behalf of
Name*,
Executive Director of the
Name*.
In
his letter to you,
Name*
raises his concerns regarding changes to the Department of Labor’s
definition of a “professional employee,” which
Name*
believes have made ineligible for the overtime pay exemption the childcare
staff members who work as house parents and reside in Children’s Homes.
Name*
also notes that, according to a Department of Labor ruling, section
13(b)(24) of the Fair Labor Standards Act (FLSA) does not apply in the case
of Name*
as that organization does not have an on campus school.
Name*
seeks your assistance in helping to obtain a ruling from the Department of
Labor, a revised administrative rule or an amendment to the FLSA, which
would allow for individuals who are not married to qualify for the FLSA
section 13(b)(24) exemption.
The Wage and Hour Division (WHD) of the Department of Labor (Department)
administers and enforces the FLSA (copy enclosed), which is the Federal law
of most general application concerning wages and hours of work. This law
requires that employers pay all covered and nonexempt employees not less
than the minimum wage of $5.15 an hour for all hours worked, and overtime
pay for all hours worked over 40 in a workweek. The FLSA applies to all
employees of covered “enterprises”—enterprise coverage—and to
employees individually engaged in interstate commerce—individual coverage.
A
discussion of enterprise and individual coverage is provided
in the WH Opinion Letter of November 30, 2004 and Fact Sheet #14 (copies
enclosed). As stated in the WH Opinion Letter, enterprise coverage does not
apply to a private, nonprofit enterprise providing care for neglected and
dependent children unless it is operated in conjunction with a hospital,
residential care facility, school (as determined under State law) or a
commercial enterprise for a business purpose. See Joles v. Johnson County
Youth Serv. Bureau, Inc., 885 F. Supp. 1169 (S.D. Ind. 1995) (nonprofit
group home for troubled youth referred by courts or county agencies had no
business purpose and was not a covered enterprise); Segali v. Idaho Youth
Ranch, Inc., 738 F. Supp. 1302 (D. Idaho 1990); and Field Operations
Handbook (FOH) 10c12(b) and 12g18 (FOH copies enclosed).
However, employees of enterprises not covered under the FLSA may still be
individually covered by the FLSA in any workweek in which they are engaged
in interstate commerce, the production of goods for commerce or activities
closely related and directly essential to the production of goods for
commerce. Examples of such interstate commerce activities include
making/receiving interstate telephone calls, shipping materials to another
state and transporting persons or property to another state.
As
a practical matter, the WHD will not assert that an employee who on isolated
occasions spends an insubstantial amount of time performing individually
covered work is individually covered by the FLSA. Individual coverage will
not be asserted for house parents or other employees who occasionally devote
insubstantial amounts of time to:
·
Receiving/making
interstate telephone calls;
·
Receiving/sending
interstate mail or electronic communications;
·
Making
bookkeeping entries related to interstate commerce.
See
FOH 11a01 (copy enclosed).
We
proceed with a discussion of the executive and professional exemptions under
section 13(a)(1) and the house parent exemption under section 13(b)(24) of
the FLSA in the event that childcare staff members are covered under the
FLSA based on either enterprise or individual coverage. After
reviewing the limited information provided, we believe that neither the
executive nor the professional exemption, as implemented under the old or
revised rule, would be applicable to the childcare staff members who perform
the work of house parents. This means that the childcare staff members at
issue are protected by the minimum wage and overtime provisions. As
discussed further below, we also believe that the FLSA’s section 13(b)(24)
exemption from overtime pay for house parents is inapplicable to childcare
staff members who, although they perform duties similar to those of house
parents, are not married.
Section 13(a)(1) of the FLSA provides an exemption from the minimum wage
and overtime provisions for any employee employed in a bona fide executive,
administrative, or professional capacity. The Department last year updated
the regulations at 29 C.F.R. Part 541 (copy enclosed) implementing the
section 13(a)(1) exemptions, which became effective August 23, 2004. An
employee may qualify for exemption as a bona fide executive, administrative
or professional employee if all the pertinent tests relating to duty, salary
level and salary basis are met. For discussion purposes, we assume that the
childcare staff members at issue are compensated on a salary basis at a rate
of at least $455 per week as required.
Executive
Exemption
As
discussed in the revised rule at 29 C.F.R. § 541.100(a), “[t]he term
‘employee employed in a bona fide executive capacity’ in section 13(a)(1) of
the Act” means “any employee”:
1) Compensated on a salary basis at a rate of not less than $455 per week
… , exclusive of board, lodging or other facilities;
2) Whose primary duty
is management of the enterprise in which the employee is employed or of a
customarily recognized department or subdivision thereof;
3) Who customarily and
regularly directs the work of two or more other employees; and
4) Who has the
authority to hire or fire other employees or whose suggestions and
recommendations as to the hiring, firing, advancement, promotion or any
other change of status of other employees are given particular weight.
Id.
The old rule also required as part of the duty test that the bona fide
executive employee must have customarily and regularly directed the work of
two or more other employees. Since, according to information provided, most
of the childcare staff members do not supervise other employees, the
childcare staff members at issue would not meet the executive exemption
under either the old or revised rule.
Learned
Professional Exemption
As
discussed in 29 C.F.R. § 541.301(a), in order “[t]o qualify for the learned
professional exemption, an employee’s primary duty must be the performance
of work requiring advanced knowledge in a field of science or learning
customarily acquired by a prolonged course of specialized intellectual
instruction. This primary duty test includes three elements”:
1) The employee must perform work requiring advanced knowledge;
2) The advanced
knowledge must be in a field of science or learning; and
3) The advanced
knowledge must be customarily acquired by a prolonged course of specialized
intellectual instruction.
Id.
Under 29 C.F.R. § 541.301(b), “[t]he phrase ‘work requiring advanced
knowledge’ means work which is predominantly intellectual in character, and
which includes work requiring the consistent exercise of discretion and
independent judgment, as distinguished from performance of routine mental,
manual, mechanical or physical work. An employee who performs work requiring
advanced knowledge generally uses the advanced knowledge to analyze,
interpret or make deductions from varying facts or circumstances. Advanced
knowledge cannot be attained at the high school level.”
Similar to the revised rule, in order to qualify for the learned
professional exemption, the old rule required that the employee must have
had as his/her primary duty work requiring knowledge of an advanced type in
a field of science or learning customarily acquired by a prolonged course of
specialized intellectual instruction, as distinguished from a general
academic education and from an apprenticeship, and from training in the
performance of routine mental, manual, or physical processes. Since there is
no information provided that shows the work performed by the childcare staff
members requires knowledge of an advanced type in a field of science or
learning, which is customarily acquired by a prolonged course of specialized
intellectual instruction, we believe the childcare staff members at issue do
not qualify for the learned professional exemption under either the old or
revised rule.
House
Parent Exemption
Section 13(b)(24) of the FLSA provides an overtime pay exemption for
any employee who is employed with such employee’s spouse by a nonprofit
educational institution to serve as the parents of children who are orphans
or one of whose natural parents is deceased, and who are enrolled in the
institution and reside in residential facilities of the institution, while
the children are in residence at the institution. The employee and the
employee’s spouse must reside in the facility, receive (without cost) board
and lodging from the institution, and together be compensated, on a cash
basis, at an annual rate of not less than $10,000. The Department believes
that Congress only intended to exempt married couples who serve as house
parents for orphans (or children with only one living parent) who are
enrolled in and reside on the premises of an educational institution.
Thus, we conclude that the section 13(b)(24) exemption would not apply to
unmarried individuals. Any changes to the section 13(b)(24) requirements,
such as allowing for unmarried individuals who perform duties similar to
those of house parents to be eligible for the overtime pay exemption, would
be a matter for legislative determination by the Congress.
With regard to our ruling in the case of the
Name*,
the information provided by the
Name*
indicated that the children who reside in the Children’s Home are not
orphans and do not have only one living natural parent. Hence, we concluded
that, assuming individual coverage existed, the section 13(b)(24)
exemption would not apply to the house parents employed by the
Name*.
In
summary, the enterprise provisions of the FLSA do not cover private
nonprofit institutions providing care for neglected and dependent children,
if such institution is not operated in conjunction with a hospital,
residential care facility, school or a commercial enterprise operated for a
business purpose. If a member organization of the
Name*
is not covered on an enterprise basis, then it would need to
determine if individual coverage applies to its employees. Only if
enterprise or individual coverage exists should the employer
ascertain whether an exemption under the FLSA is applicable. As discussed
above, provided enterprise or individual coverage exists, it
is our opinion that neither the executive nor the professional exemption
would apply to the childcare staff members who work as house parents. In
addition, the section 13(b)(24) exemption from overtime pay would be
inapplicable to childcare staff members who, although they perform duties
similar to those of house parents, are not married.
This opinion is based exclusively on the facts and circumstances described
in your request and is given based on your representation, express or
implied, that you have provided a full and fair description of all the facts
and circumstances that would be pertinent to our consideration of the
question presented. Existence of any other factual or historical background
not contained in your letter might require a conclusion different from the
one expressed herein. You have represented that this opinion is not sought
by a party to pending private litigation concerning the issue addressed
herein. You have also represented that this opinion is not sought in
connection with an investigation or litigation between a client or firm and
the Wage and Hour Division or the Department of Labor. This opinion is
issued as an official ruling of the Wage and Hour Division for purposes of
the Portal-to-Portal Act, 29 U.S.C. § 259. See 29 C.F.R. §§
790.17(d), 790.19; Hultgren v. County of Lancaster, 913 F.2d 498, 507
(8th Cir. 1990).
We
trust that this letter is responsive to your inquiry. Please contact our
office if we can be of further assistance.
Sincerely,
Alfred B. Robinson, Jr.
Deputy Administrator
Enclosures: FLSA
29 C.F.R.
Part 541
WH Opinion letter November 30, 2004
Fact Sheet #14
FOH 10c12(b), 11a01, 12g18
*
Note: The actual name(s) was removed to preserve privacy in accordance with
5 U.S.C. 552 (b)(7).
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