Previous Department of Labor opinions regarding issues of pay and classification have been withdrawn by the Biden administration, the latest in a series of steps that suggest the federal government’s approach to such issues will differ significantly from that of the Trump administration.
The Wages and Hour Division of the Department of Labor said this week that it was withdrawing two previous letters of opinion that it had published in 2019. The letters do not have the force of law and are not arrived at through a rulemaking process. But they are factors going forward in regulation and litigation.
The most significant withdrawal for the trucking industry was a letter published in 2019 regarding compensation for time spent in the sleeper berth.
In announcing the withdrawal of the letter, the WHD said the 2019 opinion was “inconsistent with long-standing WHD interpretations regarding the compensability of time spent in a trucker’s sleeper berth.” It also said the opinion letter had been ignored by “several courts” because it was “unpersuasive.” The withdrawal announcement said the earlier 2019 letter never spelled out why it was moving away from previous WHD guidelines.
With the withdrawal of the 2019 letter, the WHD reinstated opinions that had been operative prior to that. Those previous letters, according to the law firm of Scopelitis Garvin Light Hanson & Feary, discussed limits on what the law firm said was “when and how much sleeper berth time can be non-compensable.”
The 2019 opinion letter said the earlier rules had been “unnecessarily burdensome for employers.” The WHD said at the time that the now-withdrawn opinion would be a “straightforward reading of the applicable regulation.” And under that interpretation, when drivers are off duty and “permitted” to be in a sleeper berth, that would be considered “presumptively nonworking time that is not compensable.”
In a blog post at the time the letter was issued, the law firm of Dickinson, Mackaman, Tyler & Hagen described the opinion of WHD as “time sleeping in a sleeping berth is generally and presumptively non-compensable, as long as it is of sufficient length, in adequate facilities, the employee is relieved from all duties and the employee can effectively use that time for his/her own purposes.”
The 2019 WHD letter goes on to say that there may be some periods in which a driver can be in the sleeper berth but is on call or doing paperwork. Such a situation would require those hours to be considered compensable.
James Hanson, partner at the trucking-focused law firm of Scopelitis Garvin Light Hanson & Feary said of the moves: “We’re back to where we were before the letter was issued.” There continues to be a significant amount of litigation ongoing about the question of compensation for sleeper berth time, he added, ticking off numerous cases, some won by carriers, others by drivers.
The issue of sleeper berth compensation often involves issues of total compensation for a linehaul. One question that has come up in some lawsuits arises where the per-mile pay when compared to what a minimum wage compensation would be for the hours worked — a number that can be very much dependent upon defining what amount of time in the sleeper berth should be compensated — becomes an issue.
In an email update to its clients, Scopelitis said of the sleeper berth rule withdrawal that the issue “remains a frequently litigated issue in federal courts all over the country.” It advised its clients to pay “careful attention to the details of hours of work policies” because that will help “strengthen a carrier’s defense to claims related to the compensability of sleeper berth time.”
Another significant action the DOL has taken in recent weeks is to withdraw its proposed rule on classifying workers as either employees or independent contractors. The withdrawal by DOL of that rule, entitled Independent Contractor Status Under the Fair Labor Standards Act, had been widely expected. The rule was originally announced in January for an early March implementation. But given the change in outlook between the Biden and Trump administrations on the question of employee versus contractor status, its delay or withdrawal was expected.
In the Federal Register notice Feb. 7 announcing the delay, the DOL commenced a comment period that closes next week. It also said its new target for the implementation of a rule is May 7.
The second WHD opinion letter that was withdrawn this week involved workers for companies operating in what the agency called a “virtual marketplace” and whether a “service provider” to that company is an employee or a contractor. The opinion letter from 2019 uses a six-function test to determine the question of employee versus contractor, including familiar provisions of control over the worker and the amount of skill needed for the job.
In its statement, WHD said it was withdrawing that opinion letter because it dealt with issues that are expected to be resolved in any relaunch of the Independent Contractor Status rule now under a comment period.
In its note to clients, Scopelitis said the withdrawal of that opinion letter “suggests a more sweeping, employee-centric approach that goes beyond the favorable changes set forth in the new regulation. Although the broad legal impact is limited, because opinion letters are not binding on courts, it is a bellwether for the WHD’s approach to independent contractor issues.”