Labor & Employment Blog

On May 28, 2026, the U.S. Department of Labor's Wage and Hour Division (WHD) issued a series of opinion letters providing guidance on several recurring Fair Labor Standards Act (FLSA) compliance issues. Opinion Letters are official written interpretations from agencies like the WHD. Although they are not legally binding, employers can use them to support a good faith compliance defense. The recent letters address whether exempt employees may perform additional non-exempt work without jeopardizing their exemption status, how employers may structure certain bonus programs without triggering additional overtime calculations, whether meal periods remain non-compensable when the employer’s physical layout limits employees’ ability to leave the premises or employees feel there is not enough time to leave the worksite, and whether pre-shift activities are compensable and timeclock rounding practices are neutral. Below is a summary of each opinion letter and its implications for employers.

FLSA2026-5: Exempt Employees Performing Additional Non-Exempt Work

A hospital employee asked the WHD whether an employee classified as exempt under the FLSA could perform work in a separate, non-exempt role for the same employer and receive hourly compensation for that work without jeopardizing the employee’s exempt classification. The request arose from a healthcare setting in which Nursing Professional Development Specialists, classified as exempt employees, occasionally worked additional shifts as Staff Nurses, a non-exempt position.

The Department of Labor's Response

The WHD concluded that exempt employees do not automatically lose their exempt status by performing additional, non-exempt work and receiving hourly pay for those duties. The key consideration remains whether the employee’s “primary duty” continues to consist of exempt work and whether the salary basis requirements for the exemption are satisfied. The Department further explained that employers may provide additional compensation—including hourly compensation—for work performed beyond the employee’s regular exempt duties without invalidating the exemption.

Employer Impact

This guidance provides employers with greater flexibility when staffing shortages arise or employees take on supplemental responsibilities. Organizations may permit exempt employees to perform limited, non-exempt work and compensate them separately, provided the exempt role remains the employee’s primary duty. Employers should nevertheless monitor and periodically reassess the amount and nature of non-exempt work performed, as a shift in an employee's primary duties could jeopardize the exemption and create overtime obligations. The primary duty test is qualitative, not purely mathematical. While spending more than 50% of time on exempt work generally satisfies the primary duty test, it is not an absolute threshold.

FLSA2026-6: Quarterly Bonus Programs and Overtime Compliance

The WHD considered whether a quarterly bonus program tied to employees' total earnings complied with the FLSA's overtime requirements without requiring additional overtime recomputation when the bonus is paid. Under the employer’s bonus program, employees received a portion of a bonus pool based on the percentage their total earnings—including both straight-time and overtime compensation—represented of the total earnings of all pool participants.

The Department of Labor's Response

The WHD determined the bonus qualified as a valid "percentage of total earnings" bonus under existing regulations. Because the formula increased both straight-time and overtime earnings by the same percentage, the bonus inherently included any overtime premium attributable to the bonus itself. Put another way, percentage-of-total-earnings bonuses include built-in overtime. As a result, employers using this type of bonus structure are not required to recalculate employees' regular rates of pay or make additional overtime payments after distributing the bonus.

Employer Impact

The opinion letter offers valuable guidance for employers utilizing incentive compensation programs. Properly structured percentage-of-total-earnings bonuses can simplify payroll administration by eliminating the need for retroactive overtime recalculations. However, employers should carefully review bonus formulas to ensure the bonus is not structured to evade overtime (e.g., the bonus percentage cannot decline as overtime hours increase). The employer also cannot dilute the overtime component by applying a higher percentage to straight-time earnings than to overtime earnings, or by including items normally excluded from the regular rate. Employers considering implementing or modifying bonus programs should consult counsel to confirm compliance with FLSA requirements. For example, if the bonus is not structured as a percentage of total earnings and, for example, the bonus is a flat-dollar amount or tied to base salary only, a retroactive regular rate recomputation and additional overtime payment may be required when the bonus is paid.

FLSA2026-7: Bona Fide Meal Periods and Voluntary Off-Site Travel

An employee who works at a large, secured facility with controlled access points and distant parking lots asked the WHD whether the employer must compensate employees for time spent walking to parking areas and passing through security checkpoints when employees voluntarily choose to leave the employer's premises during an unpaid meal break. Given the employer’s layout, travel to and from off-site locations reduced the amount of time available for an off-site meal and limited employees’ practical ability to leave the premises.

The Department of Labor's Response

The Department concluded the employer's thirty-minute unpaid meal period remained a bona fide, non-compensable meal period under the FLSA. The WHD emphasized that employees were completely relieved of their duties during the break and had the option to remain on-site without losing meal time to travel. The FLSA does not require employees to be permitted to leave the premises for a meal break to be non-compensable. A break is bona fide if employees are fully relieved from duties and the time is sufficient to eat, regardless of whether off-site dining is feasible. That employees voluntarily chose to leave the premises—and consequently spent part of their meal period walking or passing through security—did not transform the meal period into compensable work time.

Employer Impact

This opinion letter reinforces the principle that employers generally are not required to compensate employees for bona fide meal periods lasting thirty minutes or more, provided employees are relieved from work duties. Employers may maintain reasonable security protocols and need not extend meal periods to account for employees' voluntary decisions to leave the worksite. Be cautious, however, if employees are required to remain on premises and are interrupted by work duties during the break; that scenario may convert the break to compensable time. Furthermore, employers should remain mindful that state and local wage-and-hour laws may impose more stringent meal period requirements than those under the FLSA.

FLSA2026-8: Pre-Shift Work, Timekeeping Practices, and Rounding Policies

A non-exempt employee of a large public hospital asked WHD whether a hospital’s timekeeping practices complied with the FLSA, including whether employees should be compensated for pre-shift activities, whether waiting in line to clock in or out constituted compensable work time, whether the employer could rely on the de minimis doctrine to exclude up to seven minutes of daily work, and whether its rounding practices were lawful.

The Department of Labor's Response

The WHD concluded the hospital's practices raised "substantial questions" regarding compliance with the FLSA. The Department explained pre-shift activities that are integral and indispensable to employees' principal duties—such as reviewing patient information or receiving handoff reports—may constitute compensable work time. Conversely, waiting in line to clock in or out generally is not compensable if it occurs before the first principal activity or after the last principal activity of the workday.

The WHD also cautioned that regularly occurring pre-shift work is unlikely to qualify as de minimis, particularly given the employers' ability to track time through modern electronic systems. Finally, the Department stated that rounding policies must be neutral in both design and application. A policy that rounds early clock-ins forward to the scheduled shift time while employees perform compensable work may violate the FLSA if it consistently benefits the employer.

Employer Impact

This opinion letter serves as a reminder that employers should carefully assess whether employees are performing compensable work before or after their scheduled shifts. Employers also should review timekeeping and rounding practices to ensure they do not systematically undercompensate employees. Conducting periodic audits of pay practices and enforcing policies prohibiting unauthorized off-the-clock work can help reduce the risk of wage and hour liability.

Why the Opinion Letters Matter

The opinion letters are official agency interpretations, and employers who rely on a WHD opinion letter in good faith can be shielded from FLSA liability, even if the letter is later modified or rescinded. This makes them among the employer’s most valuable compliance tools. If any of the issues addressed in the four opinion letters arise in your workplace, now is the time to act proactively.

Our Labor and Employment Practice Group is ready to answer your questions about how these developments apply to your specific operations, pay structures, and employee classifications. 

Disclaimer: This blog does not constitute legal advice, does not create an attorney-client relationship, and is intended for informational purposes only.