US Department of Labor issues 6 opinion letters addressing employee classification, bonuses, overtime exemptions, family medical leave

An opinion letter is an official written response from the U.S. Department of Labor’s Wage and Hour Division (WHD) explaining how laws like the FLSA or FMLA apply to a specific, real‑world fact pattern.

Authority:

• It is guidance, not a statute or regulation, but:
  • If it is signed by the WHD Administrator and interprets the FLSA (or certain federal contract laws), employers who act in good‑faith reliance on it can raise a legal defense under the federal Portal‑to‑Portal Act if they are later sued over the same issues.
  • WHD also treats Administrator‑signed FMLA opinion letters as official statements of agency policy, though the Portal‑to‑Portal defense technically applies only to FLSA/DBA/PCA.

So: opinion letters are not binding on courts the way a statute or regulation is, but they are highly persuasive and can provide a significant “safe harbor” for employers who follow them in good faith on the same facts.

The Wage and Hour Division (WHD) is the enforcement arm of the U.S. Department of Labor for core federal wage‑and‑hour and certain leave laws.

What it is:

• A DOL agency whose mission is “to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation’s workforce.”

What it enforces (among others):

• Fair Labor Standards Act (FLSA): federal minimum wage, overtime pay, recordkeeping, and child labor rules.
• Family and Medical Leave Act (FMLA): job‑protected unpaid family and medical leave.
• Migrant and Seasonal Agricultural Worker Protection Act, Employee Polygraph Protection Act, wage‑garnishment limits under the Consumer Credit Protection Act, and federal prevailing‑wage requirements on certain government contracts (Davis‑Bacon and Service Contract Acts).

It investigates complaints, recovers back wages, issues opinion letters and other guidance, and can bring enforcement actions against employers.

The “learned professional exemption” is one of the white‑collar exemptions in section 13(a)(1) of the FLSA. If an employee meets it, the employer does not have to pay overtime or (in most cases) minimum wage under the FLSA.

To qualify as a learned professional (summarized):

1. Salary level: The employee is paid on a salary or fee basis at least at the standard salary level in 29 C.F.R. §541.600 (currently $684 per week under the rule DOL is enforcing).
2. Primary duty: The main duty is work requiring “advanced knowledge” that is predominantly intellectual and involves consistent exercise of discretion and judgment.
3. Field of science or learning: The advanced knowledge is in a recognized field such as law, medicine, engineering, accounting, teaching, physical/biological sciences, or similar professional fields.
4. Advanced, specialized education: That knowledge is “customarily acquired by a prolonged course of specialized intellectual instruction” (typically a specialized degree, though equivalent advanced knowledge from experience plus study can sometimes qualify).

If all of these are not met, the exemption does not apply and the worker must get overtime. Job title alone never decides this.

The new opinion letter FLSA2026‑1 applies these criteria to a particular job and also addresses when an employer may choose to reclassify a qualifying learned professional as non‑exempt (generally, the FLSA allows employers to be more generous and pay overtime even if an exemption could apply).

Under the FLSA, an employee’s “regular rate of pay” is the average hourly rate for a workweek that includes almost all compensation for employment. Overtime (at least 1.5×) must be calculated from this rate.

Regular rate basics:

• Regular rate = (all pay for the week that must be included) ÷ (all hours worked that week).
• It generally includes hourly wages, salary converted to hourly, shift differentials, most commissions, and most nondiscretionary bonuses.

Bonuses:

• Nondiscretionary bonuses (those employees know about and can expect if they meet set criteria, such as production, attendance, safety, or promised performance bonuses) must be included in the regular rate and therefore increase overtime pay.
• Discretionary bonuses may be excluded if, and only if: the employer decides whether to pay and how much at or near the end of the bonus period and there was no prior promise or agreement that would lead employees to expect it regularly (for example, a truly unexpected, one‑off “spot” bonus).
• Certain gifts or sign‑on bonuses that are not tied to hours, production, or efficiency can also be excluded.

FLSA2026‑2 applies these rules to specific bonus designs and explains which can be left out of the regular rate and how to recalculate overtime when a bonus must be included.

Section 7(i) of the FLSA provides a narrow overtime exemption for certain employees of retail or service establishments who are paid mainly by commission. It exempts them from overtime (but not from minimum wage) if all three of these are met:

1. They work for a retail or service establishment (at least 75% of sales are recognized as retail, not for resale).
2. In each overtime week, their regular rate of pay is more than 1.5 times the applicable minimum wage.
3. Over a “representative period” of at least one month (up to a year), more than half of their earnings come from commissions.

Effect of tips and higher state minimum wages:

• Existing DOL guidance says the 1.5× test compares the employee’s regular rate to the applicable minimum wage for the job’s location (if state or local minimum wage is higher than the federal rate, that higher rate is the “applicable” one), so in higher‑wage states it is harder to qualify because the threshold regular rate is higher.
• Under current fact‑sheet guidance, tips are not treated as commissions for the 7(i) test; only payments the employer identifies and pays as commissions count. Mandatory service charges that the employer distributes to staff can count as commissions, but voluntary customer tips cannot.

The new opinion letter FLSA2026‑4 addresses exactly these issues and, consistent with prior guidance, clarifies:

• Employers in states with higher minimum wages must use the higher state (or local) minimum wage—not the lower federal minimum—to decide whether the 1.5×‑minimum‑wage condition is satisfied; and
• Tips are not “commissions” for the rule that more than half of compensation must come from commissions, though certain employer‑imposed service charges may qualify.

Under the FMLA, school closures are treated based on whether the employee would have been working on those days.

Existing rules for school employees:

• For school employees, time when school is not in session and the employee would not normally work (for example, summer vacation between terms) does not count as FMLA leave, even if it falls between FMLA‑covered absences.
• Similar principles apply to shorter closures: if a public or private elementary or secondary school closes for part of a week (for example, for weather or a brief emergency) and employees are not required to work on those days, those closed days generally do not reduce the employee’s 12‑week FMLA entitlement.
• Only days on which the employee was scheduled to work — and does not work because of an FMLA‑qualifying reason — count against the employee’s FMLA leave.

The new opinion letter FMLA2026‑1 applies these existing rules to short, less‑than‑a‑week closures and clarifies how to calculate the fraction of a week of FMLA leave school employees use when some days in that week are closure days on which they had no work obligation.

Yes. FMLA leave can include reasonable travel time that is an essential part of getting to or from covered medical care, but the employer may require medical certification that ties the appointments (and related timing) to a serious health condition.

General rules:

• FMLA covers leave needed for an employee’s own serious health condition or to care for a family member with a serious health condition, including time to attend medical appointments and treatments.
• When travel is integral to that care (for example, driving several hours to a specialist or to chemotherapy), the travel time is typically counted as FMLA leave.

Documentation:

• Employers may require a standard FMLA medical certification from the health‑care provider that confirms:
  • The existence of a serious health condition;
  • The need for continuing treatment or appointments; and
  • The likely frequency and duration of those appointments.
• If the original certification is silent about travel but the travel is reasonably necessary to reach the certified treatment, DOL’s new opinion letter FMLA2026‑2 explains that employers should generally treat the associated travel time as FMLA‑qualifying. However, an employer may ask for clarification or recertification if it doubts whether the amount or pattern of travel is consistent with the medical need.

So: you do not need a separate “travel‑time” note, but you do need FMLA medical certification that establishes the underlying serious health condition and treatment schedule; employers can seek clarification if the claimed travel time seems excessive or unrelated to that care.

The Payroll Audit Independent Determination (PAID) program is a voluntary self‑audit program run by the Wage and Hour Division that lets employers identify and resolve certain FLSA and related FMLA pay violations with DOL’s help, instead of through litigation.

How it works in outline:

1. Employer self‑review: The employer reviews its pay and leave practices and identifies specific, potential minimum‑wage, overtime, or certain FMLA‑related pay violations (for example, miscalculated overtime or unpaid FMLA time that should have been paid).
2. Submission to WHD: The employer applies to PAID, providing detailed information about the affected employees, time periods, calculations of back wages due, and a proposed plan to correct practices going forward.
3. WHD review: WHD evaluates the submission, may adjust calculations, and, if it accepts the case, issues an official determination of back wages owed.
4. Payment and releases: The employer pays 100% of back wages promptly. Employees who accept payment sign a WHD form releasing FLSA (and covered FMLA‑wage) claims for the period and issues included in the PAID settlement; they keep the money even if they later sue over different issues.

Key points:

• Participation is voluntary for both employers and employees.
• The program does not cover all types of claims (for example, it does not resolve state‑law wage claims or non‑wage FMLA issues like job restoration disputes).
• Employers do not pay civil money penalties for issues resolved through PAID, but future or unrelated violations can still be enforced separately.

The January 2026 release notes that PAID is one of WHD’s main compliance‑assistance tools alongside opinion letters and hotlines.