In a move that is widely seen as good news for employers, the U.S. Department of Labor (DOL) announced June 27 that it would reinstate its practice of issuing Wage and Hour Division (WHD) opinion letters, a practice that was ended by the Obama Administration after 70 years in existence.
An opinion letter is an official, written opinion by the WHD explaining how a particular law applies in specific circumstances presented by the requester (usually an employer or employer representative, but employees or other entities can also request opinion letters). The WHD enforces and administers several laws, including the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). By far, most opinion letters throughout the years have concerned the FLSA.
In 2010, the Obama Administration suddenly announced it would no longer issue opinion letters, but rather, would issue “Administrator Interpretations,” which are much more general in their guidance, and therefore seen by most employers and employer advocates as minimally helpful at best. Moreover, since the 2010 announcement, the WHD issued only seven FLSA- and two FMLA-related Administrator Interpretations. By way of comparison, in 2009 (the last year the WHD issued opinion letters), the WHD issued 36 FLSA- and one FMLA-related opinion letters.
Opinion letters are helpful to employers in two main ways. First, an employer who relies on an opinion letter that is based on similar facts to the employer’s own situation (which can include not only the employer who requested the opinion letter but any other employer) can assert a “good faith reliance” defense to FLSA claims, which can limit or even eliminate liability in some situations. (Unfortunately, no such defense exists under the FMLA or the other laws enforced by the WHD.) Second, since opinion letters are published, all employers can benefit from their guidance as they make decisions with FLSA (and other laws) implications.
In the press release announcing the reinstatement of opinion letters, DOL Secretary Alexander Acosta explained his rationale:
Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes … The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their business and creating jobs.
The DOL also launched a new webpage for employers (or others) to submit requests for opinion letters and to review past opinion letters. You can access that website here.
The revival of opinion letters, coming just three weeks after Secretary Acosta’s announcement that the DOL was withdrawing its 2015 and 2016 guidance on independent contractor misclassification and joint employment, signals a new era at the DOL. It seems clear that the DOL is changing its focus from punishing alleged lawbreakers to educating employers and promoting voluntary compliance. After enduring a very active and aggressive DOL for eight years, this is a welcome relief.