On May 28, 2026, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) released four new opinion letters addressing difficult FLSA questions from employers and employees. These are the agency’s official interpretation of the law, and employers who follow them get a legal safe harbor. Here’s what you need to know.
Can Your Exempt Employees Pick Up Extra Shifts Without Losing Their Exemption? (FLSA2026‑5)
A hospital’s exempt Specialists regularly pick up 12-hour weekend shifts as Staff Nurses, i.e., non-exempt work making up 23 to 38 percent of their weekly hours.
Does picking up these extra shifts cost them their exempt status?
The WHD said no. There is no strict percentage cap on non-exempt work. What matters is the overall character of the job, not a precise time breakdown.
Because these employees spend the substantial majority of their time (about 40 hours per week) in their exempt role and only pick up weekend shifts as a supplement, exempt status holds. Added perk: paying an hourly rate for extra shifts doesn’t jeopardize the exemption either, as the FLSA allows additional compensation beyond the normal workweek.
Does Your Bonus Plan Require Overtime Recalculations? (FLSA2026‑6)
An employer pays quarterly bonuses to a group of employees based on a pool tied to the company’s sales revenue. Each employee’s share of the pool is determined by comparing their total earnings (including both regular pay and overtime pay) to the total earnings of all participating employees. For example, if the bonus pool is $100,000 and an employee’s earnings made up 5% of the group’s total earnings, that employee receives a $5,000 bonus.
Does the employer need to go back and recalculate overtime pay on top of that bonus?
Generally, non-discretionary bonuses must be included in an employee’s “regular rate” for the purposes of calculating overtime. That usually means waiting until the bonus amount is known, allocating it back over the relevant workweeks, and paying any additional overtime owed. But there’s an exception: “percentage of total earnings” bonuses that increase both straight-time and overtime pay by the same percentage already include the overtime component, so no recalculation is needed.
On these facts, because each employee’s bonus equals the same fixed percentage of their own total earnings, the formula qualifies, according to the WHD. The employer doesn’t need to recalculate overtime; the bonus already bakes it in. This is good news for employers with pool-based bonus plans—just make sure your formula doesn’t include items excluded from the regular rate (like discretionary bonuses or expense reimbursements).
Is a Long Walk to the Parking Lot Compensable Break Time? (FLSA2026‑7)
Employees at a large secured facility get a 30-minute unpaid meal break and may leave the premises. However, getting off-site means passing through security and a long walk to the parking lot, leaving only 10 to 15 minutes of actual off-site time.
Must the employer pay for that travel?
The WHD said no. A meal break is unpaid if the employee is completely relieved from duty. Thirty minutes is typically long enough, and the FLSA doesn’t require that employees be permitted to leave, only that they’re freed from work.
Because the employer could lawfully keep employees on-site, the inconvenience of leaving doesn’t change the analysis. The employer also isn’t obligated to extend the break to accommodate travel. (Important caveat: State laws may impose stricter requirements so this opinion may have limited applicability.)
Is Your Timekeeping System Rounding Away Compensable Work? (FLSA2026‑8)
A hospital’s non-exempt employees clock in up to seven minutes early and immediately begin pre-shift work: patient handoffs, locating assignments, and completing documentation. The timekeeping system rounds those early clock-ins to the scheduled start time, so employees aren’t paid for that time.
Must the employer pay for this pre-shift work? And does this rounding policy comply with the FLSA?
The WHD found likely FLSA violations on both fronts. Receiving patient handoffs and locating assignments are “integral and indispensable” to the job: you can’t treat patients if you don’t know their condition, so that time must be paid. And because employees perform compensable work during the rounding window, the policy only ever benefits the employer. That’s not a neutral rounding policy, as is required under the FLSA.
The WHD pointedly noted that modern electronic timekeeping makes it easy to capture this time, so employers relying on rounding should expect close scrutiny.
What Should Employers Do Now?
- Dual-role arrangements: If your company’s exempt employees pick up non-exempt shifts, your company is likely in compliance, so long as exempt work remains their primary duty. You can pay an hourly rate for extra work without jeopardizing the exemption. Just watch that non-exempt work doesn’t become the actual primary duty over time.
- Bonus plans: If your bonus applies the same percentage increase to both straight-time and overtime earnings, no recalculation is needed. Review your plan to confirm it qualifies as a true “percentage of total earnings” bonus.
- Meal breaks: Your unpaid meal breaks remain valid as long as employees are fully relieved from duty, even if logistical hurdles limit off-site options. Check your state’s meal break laws for any stricter requirements.
- Timekeeping and rounding: Audit your rounding policies. If employees perform compensable work during the rounding window, you have a problem. Move toward paying actual time, and implement clear policies prohibiting pre-shift work. (But if you know they’re working early, you still have to pay them.)
If you have questions about how these letters apply to your organization, please contact any member of our Employment and Labor team.