How Recent DOL Opinion Letters Impact Wage and Hour Practices

The U.S. Department of Labor’s Wage & Hour Division (WHD) has issued four new opinion letters under the Fair Labor Standards Act. These letters give employers clear guidance on how WHD will handle common compliance questions during investigations and audits. While opinion letters do not create new laws, they often indicate how the agency will enforce existing rules and can help reduce risk if you adjust your policies and practices to match their guidance. Employers should carefully review and quickly implement the recommendations in these letters.

Here’s a brief summary of the letters but first a caveat: Opinion letters are based on specific facts. Employers can use them for guidance, but should consult with employment law counsel to discuss how they apply to their own workplace.

FLSA2026‑1 — Employers Choose Which Employees Are Exempt

This letter discusses whether an employee working as a licensed clinical social worker qualifies for the learned professional exemption under section 13(a)(1) of the FLSA. It also considers whether an employer can choose to classify such an employee as non-exempt, even if the exemption criteria are met. In this case, the employer paid the employee hourly, which does not meet the salary basis requirement for the exemption, even if the primary duties test is satisfied.

The key point in the letter is that even if an employee meets all the criteria for an FLSA exemption, it is up to the employer to claim the exemption. The law does not require employers to classify qualified employees as exempt. Instead, employers can choose to classify these employees as non-exempt, as long as they pay at least the federal minimum wage for all hours worked and overtime for any hours over 40 in a workweek. Employers may decide not to classify any qualified employees as exempt, or they may exempt only certain groups, such as managers, employees at specific grades or pay levels, or those working in particular office locations.

FLSA2026‑2 — How Bonuses Affect the “Regular Rate of Pay”

FLSA2026‑2 examines whether section 7(e) of the FLSA allows an employer to leave out certain bonus payments when calculating an employee’s regular rate of pay. The USDOL determined that these bonus payments must be included in the regular rate because the “safety, job duties, and performance bonuses” in question were incentive payments, not discretionary bonuses. The employer lost the discretion to decide whether to pay the bonuses because, once employees met specific criteria, they became entitled to receive the bonus.

FLSA2026‑3 — Roll Call and Counting Hours Worked

In FLSA2026‑3, the WHD considers whether a union and employer can make a collective bargaining agreement that requires a 15-minute “roll call” before each shift, but does not count that time when calculating overtime under the FLSA. The DOL decided that this “roll call” time must be counted as “hours worked” and must be included when determining if employees work more than 40 hours in a week. However, the DOL also says that the collective bargaining agreement could include a provision that may partially exempt employees from overtime requirements.

FLSA2026‑4 — Overtime Exemption for Commissioned Employees: Which Minimum Wage Applies and Whether Tips Count as Compensation

FLSA2026‑4 explains whether, for the overtime exemption for certain commissioned employees under section 7(i) of the FLSA, an employer in a state where the state minimum wage is higher than the federal minimum wage should use the federal or the higher state minimum wage to meet the minimum pay requirement in section 7(i)(1). It also addresses whether tips count as compensation when determining if more than half of an employee’s earnings come from commissions, as required by section 7(i)(2).

The DOL states that if an employee at a qualifying retail or service business is paid more than one and a half times the federal minimum wage, they meet the minimum pay requirement in section 7(i)(1). While tips are not considered commissions under section 7(i), in certain situations, some of an employee’s tips can count as compensation when deciding if the employee is mainly paid by commission under section 7(i)(2).

Final Thoughts

As I mentioned earlier, opinion letters do not change laws or regulations, but they often clarify unclear areas and indicate how the Wage and Hour Division (WHD) will interpret difficult situations. Use these letters to improve your compliance, address documentation gaps, and train your frontline managers. Taking these steps now lowers your risk of lawsuits and helps you if the WHD investigates or if someone challenges your practices in court.