The U.S. Department of Labor’s Wage and Hour Division recently released four new Opinion Letters interpreting the Fair Labor Standards Act (FLSA). While opinion letters are not binding law, they provide valuable insight into how the DOL is likely to interpret and enforce federal wage and hour requirements. For employers—particularly those in healthcare, home care, and other industries with complex scheduling—these letters offer practical guidance on several common compliance issues.
These opinion letters reinforce a broader trend: the Department of Labor continues to focus on accurate timekeeping, proper overtime calculations, and careful classification of employees.
Employers should periodically review:
- Exempt employee classifications
- Bonus and incentive compensation plans
- Meal period policies
- Timekeeping and rounding practices
- Off-the-clock work procedures
These are also areas where payroll, timekeeping, HR, and legal compliance need to work together. Forework is designed around that connection, helping employers maintain more consistent processes as wage-and-hour requirements evolve.
A proactive compliance review today may help avoid costly wage-and-hour litigation tomorrow.
Below is a summary of the key takeaways.
1. Exempt Employees Can Perform Non-Exempt Work—If Structured Properly
One of the most significant opinion letters addresses a question many healthcare employers face: Can a salaried exempt employee pick up hourly shifts without losing exempt status? The DOL’s answer is yes, provided several important conditions remain true.
In the opinion letter, a hospital employed a Nursing Professional Development Specialist as an exempt employee. On weekends, she voluntarily worked bedside nursing shifts that were paid on an hourly basis. Although those shifts occasionally represented more than one-third of her weekly hours, the DOL concluded that she remained exempt because:
- Her primary duty continued to be exempt professional work;
- She continued to receive her guaranteed salary each week; and
- The additional hourly compensation was structured as permissible extra compensation under the FLSA.
Employers may compensate exempt employees separately for additional non-exempt assignments without automatically jeopardizing the exemption. However, employers should periodically evaluate whether:
- the employee’s primary duties remain exempt;
- the guaranteed salary is always paid regardless of hours worked; and
- the non-exempt work has become so substantial that the employee’s primary role has effectively changed.
If the employee’s primary duty shifts toward non-exempt work, overtime obligations may apply to all hours worked.
2. Certain Quarterly Bonus Structures Eliminate Overtime Recalculations
Many employers struggle with calculating overtime when nondiscretionary bonuses are paid after the work has already been performed. Normally, a nondiscretionary bonus must be added into the employee’s regular rate of pay, requiring employers to perform a retroactive overtime calculation. The DOL explained that this additional calculation is not required if the bonus is designed as a valid “percentage of total earnings” bonus under 29 C.F.R. § 778.210.
In the opinion letter, employees shared a quarterly bonus pool based upon each employee’s percentage of the total wages earned by all eligible employees. Because overtime earnings were already included in that formula, the bonus automatically increased both straight-time and overtime earnings proportionately. As a result, no additional overtime calculation was necessary.
Thus, employers may be able to significantly simplify overtime administration by carefully structuring bonus plans. To qualify, the formula must:
- be based on total earnings;
- include overtime earnings;
- exclude payments not included in the regular rate (such as discretionary bonuses or expense reimbursements); and
- be applied consistently.
Improperly designed bonus plans may still require retroactive overtime adjustments.
3. Off-Site Meal Break Travel Is Generally Not Compensable
Another opinion letter addresses a common employee complaint involving lengthy security procedures during meal periods. An employee argued that walking to the parking lot and passing through security checkpoints consumed much of the employer’s unpaid 30-minute meal period, leaving little time to actually eat. The DOL disagreed.
Under the FLSA, the relevant question is not how much time an employee actually spends eating. Instead, the issue is whether the employee is:
- completely relieved from duty; and
- provided a bona fide meal period.
Because the employer:
- provided an unpaid 30-minute meal period,
- maintained an on-site eating area, and
- did not require employees to leave the premises,
the employee’s decision to drive elsewhere for lunch did not convert that travel time into compensable work time.
Therefore, employers generally are not required to pay employees for time voluntarily spent traveling off-site during unpaid meal breaks.
However, employers should ensure employees are genuinely relieved of all work responsibilities during unpaid meal periods and avoid interrupting employees with work-related duties.
4. The DOL Continues to Scrutinize Off-the-Clock Work and Rounding Policies
The final opinion letter contains perhaps the strongest compliance warning. The DOL examined hospital employees who routinely performed pre-shift work such as:
- reviewing patient assignments,
- receiving shift handoff reports,
- preparing equipment, and
- getting ready for patient care.
The agency concluded these activities appear to be integral and indispensable to the employees’ principal duties, making the time compensable under the FLSA. By contrast, simply waiting in line to clock in before any work begins—or waiting after the workday ends to clock out—generally remains non-compensable.
The De Minimis Defense Is Becoming Increasingly Difficult
Historically, employers sometimes relied upon the “de minimis” doctrine to disregard very small amounts of work time. The DOL cautioned that advances in modern timekeeping technology have significantly weakened that defense. Where employees regularly perform even small amounts of off-the-clock work, employers should expect heightened scrutiny.
Rounding Policies Must Be Truly Neutral
The opinion letter also criticized an employer’s rounding practice that rounded away employees’ early clock-ins. Although rounding remains permissible under federal law, it must operate neutrally over time. If employees routinely begin performing work shortly after clocking in early, but the employer’s system consistently rounds that time away, the policy could create minimum wage or overtime violations.
Practical Takeaway
Employers should review whether:
- employees perform any work before scheduled start times;
- supervisors encourage or tolerate pre-shift work;
- rounding practices consistently undercount compensable time; and
- current timekeeping systems accurately capture all hours worked.
Healthcare employers, home care agencies, and employers with shift-change responsibilities should pay particular attention to these issues.
Why Opinion Letters Matter
Although DOL opinion letters are not binding on courts, they provide valuable insight into how the Wage and Hour Division interprets the Fair Labor Standards Act.
They can also provide employers with evidence that they acted in good faith, helping defend against allegations that an FLSA violation was “willful”—a distinction that can significantly affect damages and the applicable statute of limitations.
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