Nobody in the world of human resources and employment law compliance needs to be told how difficult wage and hour law can be when applying it to the real world of employment. Attorneys make careers either defending or suing employers over alleged breaches to wage and hour law. In 2016 the Department of Labor (DOL) initiated 10,844 overtime violation cases (where questions of whether overtime pay for certain jobs should have been paid, but was not). The DOL collected on 83% of those for a total of just under $172 million in back wages.

For 70 years the Department of Labor had a program that issued Opinion Letters that would respond to questions asked about specific wage and hour situations employers would request guidance on. These Opinion Letters provided specific direction and explanation to an employer that could then, if followed specifically, be used as authority against subsequent challenges by the Wage and Hour Division.

Then in 2010, under the Obama administration the DOL ceased to provide direction by Opinion Letter and went to a more general form of regulatory explanation.  They responded to questions and issues in what it called an Administrative Interpretation or AI for short. The Wage and Hour Division defined an AI as a publication “that [provided] further clarity regarding the proper interpretation of a statutory or regulatory issue… Administrator Interpretations will set forth a general interpretation of the law and regulations, applicable across-the-board to all those affected by the provision at issue. Guidance in this form will be useful in clarifying the law as it relates to an entire industry, a category of employees, or to all employees.”

AI’s did not respond to a specific question or issue directly, rather it provided information about and explanation of the law and regulation. The AI did not answer the specific question. It was providing information for the reader’s interpretation. This left the employer responsible for figuring out how to comply with an already difficult and confusing law as it applied to a specific situation.

The DOL’s description of an Opinion Letter states, “As part of the administration of the FLSA and the FMLA, interested parties may seek, and officials of the Wage and Hour Division may provide, official written explanations of what the FLSA or the FMLA requires in fact-specific situations. Opinion letters serve as a means by which the public can develop a clearer understanding of what FLSA and FMLA compliance entails.  Opinion letters issued by the Administrator may be relied upon, pursuant to Section 10 of the Portal-to-Portal Act, 29 U.S.C. § 259, as a good faith defense to wage claims arising under the FLSA. Except as noted below, the Portal-to-Portal Act does not apply to the FMLA or other statutes enforced by WHD.”

Last month the DOL announced it would re-institute the practice of issuing Opinion Letters. Besides more direct interpretive information this action also provides employers an affirmative defense on wage and hour litigation. An Opinion Letter can be used and cited as authority in Court justifying employers’ actions that were taken in reliance on the ruling it provided. Administrative Interpretation letters were not as effective as such because the information provided in the AI was not fact specific. An important component that Opinion Letters provide.

Not all Opinion Letters will provide sufficient advice. A recent article captured in Employment Law 360 by Amy Traub and Amanda Van Hoose Garafalo advises, “If the Opinion Letter does not give a concise ruling on the specific actions or inactions at issue in an employer’s case, and instead, leaves it up to an employer to interpret the FLSA, allowing an employer to choose the route most favorable to it, the employer’s reliance on the opinion letter will not satisfy the defense.”

The article also points out a legal technicality that is a short-fall for using the Opinion Letter in court – it may cost the employer his/her attorney-client privilege. This concern should be discussed up front with legal counsel should reliance on an Opinion Letter be needed in Court by the employer.

All in all, the return of Opinion Letters will be helpful to employers researching explanation and interpretation of the Fair Labor Standards Act to determine if a particular course of employment action is compliant with Wage and Hour law and regulation.

ASE Members have excess to a myriad of FLSA interpretation and explanation resources. Answers to Wage and Hour questions are provided by contacting ASE’s Research Hotline at (248) 223-8021. Excellent information on the FLSA and its regulations can also be found in the ASE Virtual Library in its CCH HR Answers Now library resource. And don’t forget ASE provides education on the FLSA and Wage and Hour through a number of courses it regularly offers through its Learning and Advancement department. Information on classes can be found at the ASE website or by calling 248 223-8041.

Sources: Wage and Hour Div. DOL Statistics and Data.  How DOL Opinion Letters Are Of Value To Employers By Amy Traub and Amanda Van Hoose Garofalo July 26, 2017