DOL Revives Opinion Letters, Providing Employers Potential Defense to FLSA Claims

Author: Michael Cardman, XpertHR Legal Editor

January 9, 2018

The US Department of Labor (DOL) has reissued several Fair Labor Standards Act (FLSA) opinion letters that had been issued in the waning days of the Bush administration before being withdrawn by the Obama administration in 2009.

The new opinion letters mark a return to the DOL's longstanding practice of issuing opinion letters, which can shield an employer from liability for back wages and other damages.

The DOL had announced its plans to revive opinion letters in June 2017, but had not acted on this intention before releasing the 17 Bush-era opinion letters on January 5. "Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes," Labor Secretary Alexander Acosta said.

An opinion letter is an official, written opinion from the DOL's Wage and Hour Division (WHD) describing how a particular law applies to specific circumstances. If an employer requests an opinion letter from the WHD, provides it with all the pertinent facts regarding its particular situation, receives an opinion letter from the WHD and then follows the opinion letter in good faith, it will be shielded from liability for any minimum wage and/or overtime violations involving the practices described in its letter.

Even if they had not requested an opinion letter themselves, other employers that have identical fact patterns also can be shielded from liability if they follow an opinion letter. However, an employer should exercise caution before relying on another employer's opinion letter, because any variation in the fact pattern can nullify its defense.

In 2010, the Obama administration had abandoned the practice of issuing opinion letters in favor of "Administrator Interpretations" that set forth a general interpretation of the law and regulations, applicable across the board to all those affected by the provision in issue. The Obama administration believed this was a "much more efficient and productive use of resources than attempting to provide definitive opinion letters in response to fact-specific requests submitted by individuals and organizations, where a slight difference in the assumed facts may result in a different outcome."

By reviving opinion letters, the Trump administration is shifting away from the Obama administration's one-size-fits-all model in favor of a more targeted approach. Although opinion letters will directly apply to fewer employers than Administrator Interpretations did, they will offer a stronger defense.

Noteworthy findings among the opinion letters reissued on January 5 include:

  • If an exempt employee is absent for one or more full days, but does not have enough time in his or her paid leave bank to cover the entire absence, the employer may make a deduction from the employee's pay for any portion of the full-day absences that is not accounted for by the leave bank (FLSA 2018-14);
  • Certain project supervisors in the residential homebuilding industry qualify for the FLSA's administrative exemption (FLSA 2018-10); and
  • A hospital may make deductions - based on the number of work hours missed - from the salary of an on-call exempt Registered Nurse (RN) for absences of one or more full days when the RN is not available to be called for all hours on certain days (FLSA 2018-7).

Guidance on how to request an opinion letter can be found on the DOL's website.