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Piece-rate employees; insect farming – DOL provides guidance

Both employers were correctly compensating their workers

Posted December 9, 2020

On November 30, the U.S. Department of Labor (DOL) announced two new opinion letters that address compliance issues related to the Fair Labor Standards Act (FLSA). Here are brief recaps of the letters:

  • Piece-rate employees (FLSA2020-17): This letter responded to an employer that asked whether the regular rate of pay of its employees paid on a piece-rate basis may be calculated by dividing their total weekly earnings by the number of both productive and nonproductive hours worked in a workweek without having a specific agreement in place. The employees in question unloaded trucks in a warehouse and were paid based on the number and type of trucks they unloaded, versus getting paid a fixed hourly rate. The DOL said this was compliant with the FLSA.
  • Insect farming (FLSA2020-18): This letter responded to a facility that operated an insect farm which produced “superworms” for animal feed, as well as crickets and roaches for humans to eat. The facility was wondering whether insect farming qualified as “agriculture” under the FLSA and whether certain workers may be exempt from overtime pay. The DOL said “yes.” The FLSA agricultural exemption covers farming of non-traditional livestock (like insects). Based on the facts presented in the letter to the DOL, all the employees performing agricultural work could be exempt from overtime pay.

An opinion letter is an official, written opinion by the DOL’s Wage and Hour Division (WHD) on how a particular law applies in specific circumstances presented by the person or entity that requested the letter.The WHD exercises its discretion in determining whether and how it will respond to each request. Under the current presidential administration, 69 opinion letters have been issued.

This article was written by Michelle Higgins of J. J. Keller & Associates, Inc.

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