CLIENT ALERT
Things Are Heating Up on the Federal Level: Recent Updates from the U.S. Department of Labor & EEOC
Like the heat wave moving through New England, things have been heating up at the U.S. Department of Labor (“USDOL”) and the Equal Employment Opportunity Commission (“EEOC”). With four new opinion letters issued by USDOL’s Wage and Hour Division and the EEOC’s rescission of affirmative action guidance, employers should ensure they stay up to date.
New USDOL Opinion Letters
Periodically, USDOL’s Wage and Hour Division issues opinion letters to explain how the federal Fair Labor Standards Act (“FLSA”) applies to specific workplace situations. Opinion letters do not have the force of law and are limited to the facts presented, yet they provide helpful insight into how USDOL is likely to analyze common pay practices. Think of opinion letters as compliance road signs: not the whole map, but definitely worth reading.
Four recent USDOL opinion letters are of note for employers.
- FLSA2026-5: An Exempt Employee with a Non-Exempt Side Quest. Can an exempt employee pick up extra shifts in a nonexempt role for the same employer - say, an exempt nursing specialist moonlighting as an hourly staff nurse on weekends - without losing exempt status? In USDOL’s view, yes. Additional nonexempt hourly work does not automatically negate an employee’s status as exempt from overtime pay, as long as the employee’s primary duty remains exempt work and the employee continues to be paid on a salary basis. This is true even if the employee is paid extra by the hour for the nonexempt work in addition to receiving their salary.
- FLSA2026-6: Rethinking Overtime Calculations Involving Earnings Bonuses. Under the FLSA, most forms of compensation must be included when calculating in an employee's “regular rate” of pay (i.e., the rate at which the employee is paid 1.5 times for OT work). For example, if a nonexempt employee earns a non-discretionary bonus in addition to their hourly pay, their “regular rate” for OT purposes is not just their hourly rate, it is an enhanced rate which includes the hourly value of the bonus. Because of this, calculating an employee’s regular rate can get complicated fast, especially when bonuses are involved. Typically, when a non-discretionary bonus is paid after the fact, such as after the end of a quarter, the employer must retroactively recalculate the regular rate for all relevant workweeks to add in the value of the bonus and ensure the employee receives overtime compensation paid at 1.5 times the bonus-enhanced regular rate. An often overlooked regulation, 29 CFR § 778.210, carves out a welcome exception to the recalculation rule: if a bonus is computed as a fixed percentage of the employee's total earnings - straight-time and overtime pay combined - the overtime compensation is already baked into the earnings bonus and no recalculation is required.
This opinion letter emphasizes that bonus design matters for ensuring accurate overtime pay calculations under the FLSA. If a percentage-of-earnings bonus is based on an employee’s total earnings, including overtime compensation, the employee’s regular rate does not need to be recalculated based on the bonus and no true up of overtime pay is necessary because the bonus payment already includes any related overtime pay due. However, if the earnings bonus is based only on straight-time earnings, it might be time to get out the calculator.
- FLSA2026-7: The Meal Break Is Not a Field Trip. Have a remote worksite that makes it difficult for employees to leave the workplace during a meal period? This opinion letter emphasizes that off-site dining need not be convenient. Rather, a 30-minute unpaid meal break does not become compensable time just because employees who choose to leave the workplace during break lose time walking the distance to and from the parking lot. If employees are truly relieved from duty and can take their meal break on site, then the meal break may be unpaid. This means that employers with secured or remote facilities or large campuses can generally maintain unpaid meal periods as long as employees are off duty during that time.
- FLSA2026-8: Time Clocks Are Not Magic Wands. In the last of its recent opinion letters, USDOL looked at a hospital’s rounding practices for pre-shift work. USDOL emphasized that some pre-shift activities, such as receiving patient handoff reports or locating work assignments, may be compensable if they are integral and indispensable to the job. Waiting in line to clock in, however, usually is not compensable. Rounding practices that always benefit the employer and regularly negate compensable work time may be unlawful.
EEOC Affirmative Action and DEI Guidance
While USDOL was busy with wage-and-hour issues, the EEOC was making news on affirmative action and DEI. On June 30, 2026, the EEOC announced that it had rescinded its longstanding interpretive guidelines on affirmative action programs and related compliance materials.
This announcement was not a surprise. In the EEOC’s view, the rescinded materials that had allowed for voluntary affirmative action programs conflicted with Title VII’s protection of all individuals from unlawful discrimination.
Importantly, while the EEOC is the federal agency responsible for enforcing workplace anti-discrimination laws, this rescission does not rewrite Title VII or overrule Supreme Court precedent. Title VII still prohibits employment discrimination because of race, color, religion, sex, or national origin. The rescission does, however, reflect the EEOC’s current view toward affirmative action and DEI policies. It is likely that this rescission will be reflected in the EEOC’s enforcement efforts.
Takeaways for Employers
The USDOL opinion letters and the EEOC’s rescission of affirmative action guidance offer important insights into both agencies’ current interpretations of applicable law and signal what their enforcement efforts may look like going forward. These interpretations can be helpful tools as employers review their personnel policies and pay practices. Attorneys in our Labor & Employment practice group are available to offer insight on these recent developments and assist employers with their employment policies and pay practices.
About Sheehan's Labor and Employment Group
Jane is an associate in firm's Labor and Employment Group. Our team is experienced in all aspects of employment law, labor relations and employee benefits. We stay on top of federal and state developments, helping employers to understand and manage an increasingly complex range of workplace legal issues in private and public sector business, as well as not-for-profit organizations.
This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.