On June 27, 2017, it was announced that the United States Department of Labor reinstated the long-standing practice of issuing opinion letters regarding the application of the Fair Labor Standards Act (FLSA). For approximately 50 years, opinion letters were issued by the department in fact-specific situations where uncertainty existed on how to apply the FLSA. Opinion letters provided a mechanism for employers and employees to ask officials of the department to provide an official written explanation of what the FLSA or FMLA requires in a specific factual situation. The department ended the practice of issuing opinion letters during the Obama administration and replaced them with Administrator Interpretations (AIs), which only provided general guidance regarding the application of the law.
The department’s decision in 2010 to eliminate opinion letters benefitted employees because employers often relied upon opinion letters to assert a defense that their violation of the FLSA was not willful or that the violation was made in good-faith. If successful in raising the good-faith defense, an employer could shield themselves from exposure to the liquidated (double) damages provision of the FLSA. Now, employers are once again permitted to argue that their violation of the FLSA was made in good faith, due to their reliance on an opinion letter that may or may not apply to the case at hand.
On January 5, 2018, the DOL reissued more than a dozen advisory opinion letters that were published during President George W. Bush’s presidency, which were later rescinded. These letters will likely give employers additional ammunition in FLSA lawsuits brought by employees.
The reinstated opinion letters covered a number of topics, including whether certain employees qualify for recognized exemptions of the FLSA and whether certain job bonuses must be included in an individual’s regular pay rate (for purposes of calculating overtime).
After the release of the reissued opinion letters, it is expected that the DOL will not issue additional opinion letters until after a new Wage and Hour Division administrator is in place at the DOL. President Trump recently nominated Cheryl Stanton, a defense attorney who most recently served as the head of the South Carolina Department of Employment and Workforce. Her nomination is currently pending in the Senate.
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