The DOL Opinion Letter
On January 5, 2018, the U.S. Department of Labor (DOL) re-issued an opinion letter addressing issues regarding the application of the Fair Labor Standards Act (FLSA) to compensating non-district employees who coach interscholastic sports teams, in particular questions related to how coaches should be classified for purposes of the FLSA’s minimum wage and overtime requirements. The letter was originally issued on January 15, 2009, less than a week before President George W. Bush transitioned out of office, and it was withdrawn on March 2, 2009, just six weeks after the inauguration of President Barack Obama.
The January 5, 2018 version of the opinion letter focuses on the question of whether coaches should be considered teachers. The FLSA specifically exempts teachers from its minimum wage and overtime requirements when they perform extra duties at their schools in support of activities such as sports, theatre, music, clubs and other extracurricular pursuits designed to enrich the educational experience for students. In the opinion letter, the DOL analyzes FLSA regulations that exempt “any employee with a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge and who is employed and engaged in this activity as a teacher in an educational establishment by which the employee is employed.”
The DOL acknowledges in the opinion letter that coaches who are full-time teachers in a school satisfy the “primary duty” requirement and are exempt from the minimum wage and overtime requirements. The DOL also concludes in the letter that non-district employees who coach – community members who, for instance, work at another job and serve as a stipended coach simply because they desire to be involved in a school’s athletic program – also qualify as teachers under the FLSA and are exempt from the minimum wage and overtime requirements because their “primary duty” while working with student-athletes is instructional in nature.
The impact of these FLSA issues is that over the course of the last 15 years, according to agency-reported statistics, approximately one-third of all complaints filed with the DOL’s Wage and Hour Division (WHD) have involved non-exempt school employees seeking to recover unpaid minimum wage and overtime from their districts for the time they have invested working after-hours as sponsors for or in support of various school activities, with the administrative agency complaints often leading to federal lawsuits.
When an aggrieved worker is successful with an FLSA complaint or suit, the remedy is generally three years of back-pay for the amount of minimum wage and overtime owed in arrears to the employee, with the ensuing sum doubled as a liquidated-damages “slap on the wrist” to the employer for its wrongdoing, typically resulting in a total of $10,000+ per complainant or plaintiff, and in some cases an award of tens of thousands of dollars to the successful litigant. Although a school district may be able to absorb the damages from an occasional, isolated FLSA case, the trend is that an award of damages to one non-exempt district employee often triggers a flood of “copycat” litigation by other employees – often numbering in the hundreds in larger districts – and sometimes resulting in millions of dollars of liability for those school systems.
Details of the 2018 Opinion Letter
The opinion letter, signed by the Acting Administrator of the DOL’s WHD, opens with a paragraph including the statement “[t] his is in response to your letter regarding the application of the Fair Labor Standards Act (FLSA) to community members who coach athletic teams for a public school ... it is our opinion that the coaches you describe qualify as teachers under the Act and are exempt from the FLSA’s minimum wage and overtime pay provisions.” Note that the identity of the party who submitted the request for the opinion letter (“your letter”) is not revealed in order to preserve privacy in accordance with federal law (it may have been a governing body such as a state association or a representative of a school district seeking clarification regarding FLSA issues).
The opinion letter continues with the statement “[t]he FLSA and its implementing regulations exempt ‘any employee with a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge and who is employed and engaged in this activity as a teacher in an educational establishment by which the employee is employed.’ Coaches qualify for the exemption if their primary duty is teaching and imparting knowledge to students in an educational establishment. ‘[Individuals] who spend a considerable amount of their time in extracurricular activities such as coaching athletic teams are engaged in teaching. Such activities are a recognized part of a school’s responsibility in contributing to the educational development of the student.’”
The opinion letter also specifies that “there is no requirement, however, that the employee possess a teaching certificate to qualify for the exemption” and “there is no minimum education or academic degree required under the regulations for the teacher exemption.” Therefore, non-district employees who coach are covered by the letter and qualify for the FLSA exemption regardless of whether they hold a teaching certificate or an academic degree.
The opinion letter concludes with the statement that “[a]ssuming that the coaches are not also employed by the school or school district in a different, nonexempt capacity, we believe they qualify for exemption as teachers under the FLSA. Unlike other exempt professional employees, teachers are not subject to the salary requirements [of the FLSA] … therefore the school may pay its coaches who are exempt teachers as it deems appropriate.”
The relevance of this caveat is that the opinion letter does not apply to any individuals already employed by schools in positions with nonexempt job duties who also happen to coach, including persons such as bookkeepers, bus drivers, cafeteria workers, custodians, maintenance workers, media assistants, receptionists, school resource officers and secretaries. Such individuals would not be considered per the opinion letter to have a “primary duty” of working with student-athletes in an instructional capacity. It is also important to note that the opinion letter addresses only questions regarding coaches and does not deal with FLSA issues related to all of those persons who assist in sports event management roles such as ticket sellers, ticket takers, concession workers, scorekeepers, statisticians, contest supervisors and the like.
The full-text of the January 5, 2018 DOL opinion letter is available online here.
The Precise Requirements of the FLSA
The FLSA mandates that a non-exempt employee must be paid at least minimum wage for each hour of work for his or her employer up to 40 per week and must be paid overtime (at least time-anda- half) for each hour of work in excess of 40 per week. In order to be considered exempt from the minimum wage and overtime mandates of the FLSA, an employee must satisfy three criteria:
Based on administrative law rulings from the DOL’s WHD and on common law precedents established by federal court cases, the common categories of individuals with exempt job duties in schools are superintendents, assistant superintendents, program directors, district athletics directors, principals, assistant principals, building athletics directors, teachers, guidance counselors, nurses with an RN and certified athletic trainers.
The common categories of school employees with non-exempt job duties are teacher’s aides, safety and security officers, custodians, receptionists, cafeteria workers, secretaries, bus drivers, maintenance workers, bookkeepers, media assistants, nurses without an RN and non-certified athletic trainers.
It is important to recognize that for an employee to be considered exempt, all three of the above-stated requirements must be met – the worker must be salaried, satisfy the salary threshold and have exempt job duties. However, notably, the salary level requirement does not apply to teachers, hence the importance of the January 5, 2018 opinion letter.
The FLSA also establishes four broad categories of exceptions where even non-exempt personnel are not subject to the law’s minimum wage and overtime requirements – volunteers, trainees, independent contractors, and occasional and sporadic activities – precise definitions of which are set forth in the statute and supporting federal regulations at www.dol.gov/whd/flsa. It is important to note that each of these categories of exceptions requires satisfaction of multiple, highly-specific criteria that are beyond the scope of this article, but with which district personnel responsible for FLSA compliance need to be familiar.
State Labor Law Issues
It is imperative that in addressing athletic program compensation issues, school and athletics administrators should consult their school district attorney to ensure that policy strategies are in compliance not just with the federal FLSA, but also with state labor law regulations. Some states have enacted legislation imposing even tighter regulations on employers than the rules set forth in federal labor law.
Lee Green is an attorney and Professor Emeritus at Baker University in Baldwin City. Kansas, where for 30 years he taught courses in sports law, business law and constitutional law. He is a member of the High School Today Publications Committee. He may be contacted at Lee.Green@BakerU.Edu.