DOL Issues 6 New Opinion Letters on FLSA and FMLA Compliance

The U.S. Department of Labor's Wage and Hour Division (DOL) issued six opinion letters on January 5, 2026, related to the Fair Labor Standard Act (FLSA) and the Family and Medical Leave Act (FMLA). These opinion letters provide useful insight into the DOL's current position on compliance issues frequently encountered by employers.

Learned Professional Exemption and Employer Discretion (FLSA2026-1)

The DOL addressed whether a licensed clinical social worker (LCSW) who lost supervisory duties could still qualify for the learned professional exemption and whether employers must classify qualifying employees as exempt. In this case, an LCSW employed by a healthcare organization since 2018 was reclassified from exempt to nonexempt after an internal restructuring eliminated the employee's supervisory responsibilities and converted her to an hourly rate. The employee continued to perform her LCSW clinical duties, including assessments, treatment planning and crisis intervention – all requiring the consistent exercise of professional discretion and judgment and requiring a specialized advanced degree.

The DOL concluded that the loss of supervisory responsibilities alone would not disqualify the LCSW from the learned professional exemption, as her primary duties still involved work requiring advanced knowledge in a field of learning. The DOL noted that social workers with master's degrees, working in their field, typically meet the duties requirements for the professional exemption. But the change from salary to hourly pay likely defeats the exemption because, with a few exceptions, learned professionals must be paid on a salary basis.

Importantly, the DOL emphasized that even when employees meet all criteria for an exemption, employers retain complete discretion to classify them as nonexempt, provided they comply with minimum wage and overtime requirements. The FLSA prohibits misclassifying nonexempt employees as exempt but does not require employers to claim exemptions for qualifying employees. Employers may wish to classify an otherwise exempt employee as nonexempt to have more control over the employee's pay, particularly if the employee works irregular hours. If the employee is exempt, the employer must pay the employee the same weekly salary even if the employee works few hours because of a lack of work.

Bonus Payments and Regular Rate Calculations (FLSA2026-2)

The DOL examined whether an employer must include performance-based bonuses in employees' regular rate of pay when calculating overtime premiums. The opinion letter offers a useful discussion of distinguishing between discretionary bonuses, which may be excluded from the overtime premium calculation, and nondiscretionary bonuses, which must be included in the overtime premium calculation.

Under the facts analyzed by the DOL in this opinion letter, a waste management company paid its drivers $12 per hour, plus bonuses of up to $9.50 per hour based on punctuality, attendance, safety compliance and performance efficiency. The bonus plan used predetermined formulas, and employees received the bonus plan details before performing work. The employer excluded the bonuses when calculating overtime premiums, using only the $12 base rate.

The DOL determined that these bonuses must be included in the regular rate because they are nondiscretionary. The DOL explained that discretionary bonuses can be excluded only when 1) both the fact and amount of payment are determined at the employer's sole discretion, 2) the determination occurs at or near the end of the work period and 3) the payment is not made pursuant to any prior contract, agreement or promise. Because the bonus amounts were calculated using predetermined criteria that automatically trigger payments upon being met (and employees knew about the bonus plan in advance of working), the bonus was not discretionary. The DOL also noted that when calculating overtime with nondiscretionary bonuses, employers must include the bonus in the regular rate for all hours worked for the period covered by the bonus.

The intent of requiring the overtime premium to take into account nondiscretionary bonuses is to avoid situations where the employer tries to skirt or reduce its overtime costs by artificially lowering the hourly rate but making it up to employees with bonuses.

Compensable Time Under Collective Bargaining Agreements (FLSA2026-3)

In this opinion letter, the DOL analyzed whether a union and employer could establish a mandatory 15-minute pre-shift roll call that would be compensated but excluded from overtime calculations. County 911 dispatchers working under a collective bargaining agreement (CBA) followed a "four days on, two days off" schedule with eight-hour shifts, totaling approximately 1,941 hours annually. The union and county considered adding the roll call to bring employees closer to a standard 2,080-hour work year without triggering overtime obligations.

The DOL concluded that the 15-minute roll call would constitute compensable hours worked that must be counted toward the 40-hour overtime threshold because the employees are on duty when they are present for the roll call. The DOL rejected excluding this time from overtime calculations merely because its purpose was to increase annual hours. However, the DOL explained that the CBA could potentially qualify for partial overtime exemptions under Sections 7(b)(1) or 7(b)(2) of the FLSA. These rarely used exemptions apply to employees working under CBAs with specific provisions, including maximum hour limits and payment of overtime for work exceeding 12 hours daily or 56 hours weekly. Under the proposed schedule, adding roll call would increase weekly hours from about 37.33 to 38.5, staying below the thresholds that would trigger overtime under these exemptions. If properly structured, these exemptions could relieve the employer from paying overtime for between 40 hours and 56 hours in a workweek. Employers with a unionized workforce where employees frequently work more than 40 hours a week may wish to consider whether to explore the use of these partial overtime exemptions when negotiating the next CBA.

Restaurant Employees and Commission-Based Exemptions (FLSA2026-4)

This opinion letter addressed two important questions about the application of Section 7(i) of the FLSA, which provides an alternative means of satisfying overtime pay requirements for commission-based employees in retail and service establishments: 1) which minimum wage applies (federal, state or local) when determining if the exemption is satisfied and 2) how tips should be treated when determining whether a restaurant employee, who is primarily compensated through commissions, satisfies the Section 7(i) requirements. Essentially, if an employee in a retail or service establishment receives more than 50 percent of their compensation in commissions and earns more than 1.5 times the minimum wage, no overtime premium must be paid to the employee when the employee works more than 40 hours in the workweek for purposes of the FLSA.

The DOL reaffirmed that employers must use the federal minimum wage ($7.25 per hour), not higher state or local minimum wages, to determine the Section 7(i)(1) threshold. Currently, an employee's regular rate of pay, factoring in commission earnings, must only exceed $10.875 per hour (1.5 times $7.25).

For the requirement that commissions must exceed 50 percent of compensation, tips count only to the extent an employer takes a federal, state or local tip credit to satisfy minimum wage obligations. All other tips are excluded. Service charges (often used as an alternative to a tip) distributed to employees also qualify as commissions for purposes of Section 7(i).

The DOL gave an example comparing two servers working more than 40 hours a week to illustrate how to determine their eligibility for the commission-based overtime exemption.

Server 1 (Exemption Applies)

• Over three months: only received $11,000 in service charge commissions and $2,500 in tips
• Regular rate of pay exceeds $10.875 per hour
• Employer does not take a tip credit
• Result: Since Server 1's regular rate exceeds $10.875 per hour, the minimum pay threshold is met; tips excluded from compensation so 100 percent of compensation is commissions, so overtime exemption for commission paid employees applies

Server 2 (Exemption Does Not Apply)

• Over three months: $5,760 base wages ($12 per hour) + $2,000 commissions + $6,000 tips
• Employer takes $960 in state tip credits ($2 per hour)
• Regular rate of pay exceeds $10.875 per hour
• Result: Since Server 2's regular rate exceeds $10.875, the minimum pay threshold is met; however, commissions ($2,000) are less than 50 percent of total compensation ($5,760 + $960 = $6,720), so the employee has not satisfied all of the Section 7(i) requirements and the employee must be paid overtime at 1.5 their regular rate for all hours worked over 40

Some district courts have disagreed with previous DOL interpretations on this matter, creating potential litigation risk depending on the jurisdiction.

School Closures and FMLA Leave Calculations (FMLA2026-1)

In this opinion letter, the DOL explained that whether a school closure counts against an employee's FMLA leave depends on two principal factors: 1) whether the employee is taking full weeks or only partial (intermittent) weeks of leave and 2) whether the employee would have been expected to work during the closure period. FMLA leave is generally based on workweeks; however, if an employee takes intermittent leave, employers should only deduct the actual days taken from the employee's FMLA entitlement, not the entire week.

If an employee is using FMLA leave on an intermittent basis during a week with a partial school closure, only the days the employee would have actually worked and used leave should be counted. On the other hand, if a school closes for part of a week and the employee was already approved for FMLA leave on those specific days, those days should not be deducted from the employee's FMLA entitlement. If the employee would not have been expected to work during the closure, those days cannot be deducted from their FMLA balance. Essentially, the school closure cancels out the FMLA leave. However, if an employee is on FMLA leave for an entire week and the school closes for only part of that week, the employer can count the entire week against the employee's FMLA entitlement.

The DOL also clarified that this approach applies regardless of whether the closure was planned or unplanned, and whether the missed days are made up later in the school year. If an employee requests FMLA leave during make-up days, those requests should be considered separately from the closure days.

Overall, this DOL guidance protects employees taking intermittent FMLA leave from losing entitlement during periods when the workplace is closed. However, employees on continuous, full-week leave do not get additional FMLA days because of a partial closure during their leave period.

Travel Time for Medical Appointments Covered Under the FMLA (FMLA2026-2)

The DOL clarified that employees may use FMLA leave for time spent traveling to and from medical appointments for a serious health condition, whether for themselves or a qualifying family member. The DOL confirmed this is permissible but emphasized that the travel time must be directly related to the serious medical condition. FMLA leave does not cover travel time spent on unrelated activities or personal errands during these trips.

Additionally, the DOL stated that a valid medical certification under FMLA does not need to include details about travel time. Healthcare providers are not required to document an employee's travel time when completing medical certifications for FMLA leave. The DOL position is logical in that an employee seeking treatment for a medical condition or transporting a family member for treatment will necessarily require time to travel to and from the appointment.

Holland & Knight Can Help

Please reach out to the authors of this article or any member of Holland & Knight's Labor and Employment Group for inquiries or assistance regarding the implications and application of the DOL's recent guidance.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.