U.S. Department of Labor Rings in the New Year by Issuing Six New Opinion Letters

On Monday, January 5, 2026, the Wage and Hour Division of the Department of Labor (DOL) issued six opinion letters addressing questions regarding calculating overtime compensation under the Fair Labor Standards Act (FLSA) and determining the amount of leave an employee has under the Family Medical Leave Act (FMLA).

Here are some key takeaways:

1. Must an employer include performance-based bonuses when calculating an employee’s regular rate for overtime purposes?

Short Answer: Yes.

The FLSA requires employers to pay non-exempt employees overtime pay “at a rate not less than one and one-half times the regular rate at which the employee is employed” for all hours worked over 40 hours in a workweek.

Typical Calculation for Determining Regular Rate

To calculate the regular rate of pay, an employer must divide the total straight-time earnings by the total hours worked in that same workweek. The employee’s overtime premium is then calculated by dividing the regular rate in half and multiplying that amount by the number of hours worked in excess of 40.

For example, if an employee is paid $20 per hour and works 50 hours in a week, the employee would receive $1,000 in straight-time earnings. The regular rate is calculated by dividing the straight time earnings ($1,000) by the hours worked (50 hours).

• Regular rate = Straight time earning ($1,000) ÷ total hours worked (50 hours) = $20

Based on these calculations, the employee’s regular rate is $20 per hour.

The overtime premium is calculated by dividing the regular rate ($20) in half and multiplying it by the number of hours worked in excess of 40 (10 hours).

• Overtime premium = $20 ÷ 2 = additional $10 per overtime hour
• Overtime pay = Overtime premium ($10 per hour) x hours worked in excess of 40 (10 hours) = $100

In other words, the employee would receive $100 overtime pay, for a total of $1,100 in compensation that workweek.

Calculating Regular Rate When Weekly Bonus is Paid

When calculating the regular rate, employers must include (with limited exceptions) all remuneration for employment paid to the employee for that workweek. Employers often miscalculate the regular rate for weeks in which the employee receives a bonus—which results in underpayment to the employee.

The FLSA allows employers to exclude bonuses when calculating the regular rate if the following three conditions are met:

• The payment of the bonus is “determined at the sole discretion of the employer;”
• The employer’s determination must occur at or near the end of the pay period; and
• The bonus is “not pursuant to any prior contract, agreement, or promise causing the employee to expect such payments.”

29 U.S.C. 207(e)(3).

An employee in the waste management industry asked the DOL whether his or her employer had to include a “Safety, Job Duties, and Performance” bonus when calculating the regular rate for overtime purposes. The bonus plan at issue provided employees with additional compensation each week if they arrived to work on time, had limited absences, completed daily safety tasks, and complied with traffic laws.

In his Opinion Letter, the Administrator of the Wage and Hour Division of the DOL (the “Administrator”) concluded that where a bonus, like the “Safety, Job Duties, and Performance” bonus, is “calculated using a predetermined plan to incentivize certain work performance,” the payment must be included in the employees’ regular rate used to calculate overtime premiums. FLSA2026-2.

For example, if an employee is paid $20 per hour and works 50 hours in a week, the employee would receive $1,000 for hours worked.

• Amount earned for hours worked = $20 per hour x 50 hours = $1,000

If the employee also receives a $500 productivity bonus that week under a written bonus plan, the employee’s straight time earnings include the amount earned for hours worked ($1,000) and the amount received pursuant to the written bonus plan ($500) for a total of $1,500.

• Straight time earnings = amount earned for hours worked ($1,000) + amount received pursuant to bonus plan ($500) = $1,500

The regular rate is calculated by dividing the straight time earnings ($1,500) by the hours worked (50 hours). The employee’s regular rate is $30 per hour.

• Regular rate = Straight time earning ($1,500) ÷ total hours worked (50 hours) = $30 per hour

The overtime premium is calculated by dividing the regular rate ($30 per hour) in half and multiplying it by the number of hours worked in excess of 40 (10 hours).

• Overtime premium = $30 ÷ 2 = additional $15 per overtime hour
• Overtime pay = Overtime premium ($15 per hour) x hours worked in excess of 40 (10 hours ) = $150

 In other words, the employee would receive $150 as an overtime premium, for a total of $1,650 in compensation for the workweek.

• Total compensation = amount earned for hours worked ($1,000) + amount received pursuant to bonus plan ($500) + overtime pay ($150) = $1,650

Employers should review their bonus programs to ensure compliance, particularly where bonuses are tied to achieving specific metrics.

2. May an employee use FMLA leave for time spent traveling to medical appointments?

Short Answer: Yes.

In another opinion letter, the DOL addressed whether employees may use FMLA leave to travel to medical appointments where the medical certification did not address travel time. An employer had an employee who requested intermittent medical leave to attend medical appointments for a serious health condition. The employee’s physician certified that the appointments would occur once per month for 45 minutes. The medical certification did not address travel time, but the employee informed the employer that he or she needed one hour to travel to or from the doctor’s office. The employer sought guidance on whether employees’ travel time to a medical appointment to treat their serious health condition was protected leave under the FMLA.

The Administrator responded affirmatively, stating that an eligible employee may take FMLA leave not only for the actual medical appointment but also for the time traveling to or from the appointment. Further, the Administrator concluded that a medical certificate need not include information regarding travel time to be “complete and valid” under the FMLA.

3. When a school closes due to inclement weather, how does the school calculate an employee’s FMLA leave?

Short Answer: It depends whether the leave was requested for a full week or for less than a full week.

A school asked the DOL to clarify whether an employee’s absence counts against his or her FMLA entitlement when the employer is temporarily closed due to inclement weather. In response, the Administrator opined that the calculation of an employee’s FMLA leave entitlement depends on whether the employee took leave for a full workweek or only part of the workweek. If an employee requests FMLA leave for a full workweek and the school is closed due to inclement weather one day that week, the employer may deduct the full week from the employee’s FMLA entitlement. On the other hand, when an employee takes leave for part of a workweek, only the amount of leave taken may be counted. For example, if an employee requests FMLA leave for a Tuesday, but the school is closed due to inclement weather on that Tuesday, the employer should not deduct that day (when the employee was not required to report to work) from the employee’s FMLA entitlement.

4. If an employee meets the duties test to be exempt from overtime, can an employer still treat the employee as non-exempt from overtime?

Short Answer: Yes.

A licensed social worker for a healthcare organization had been classified as a salaried exempt employee since 2018. Her employer went through “internal restructuring,” removed her supervisory responsibilities, and reclassified her as holding an “hourly (non-exempt)” position. The social worker asked the DOL to address whether her role as a licensed social worker met the criteria for the “learned professional” exemption from the overtime requirements of the FLSA.

The Administrator responded that licensed social workers who, as part of their primary duty, perform work requiring advanced knowledge “in a field of science or learning” meet the duties test to be exempt from the overtime requirements of the FLSA. Nevertheless, the Administrator noted that an employer may classify an exempt employee as non-exempt (paying them an hourly rate and overtime compensation) without violating the FLSA.

In the two remaining opinion letters, the Administrator provided guidance to fact-specific questions regarding the calculation of overtime compensation. The letters addressed the following issues, respectively:

• How to apply the overtime exemption for retail and service establishment employees who were paid, at least in part, on a commission basis when the state’s minimum wage is higher than the federal minimum wage.
• Whether a union and an employer could enter into a collective bargaining agreement where a mandatory 15-minute pre-shift roll call would be compensated but excluded from overtime calculations.

Last June, the DOL expanded its opinion letter program. While opinion letters are not binding on the courts, they do provide employers with insight into the agency’s interpretation of its regulations and enforcement approach.

Should you have questions regarding your organization’s classification of employees, its calculation of overtime compensation, or leave entitlements, please contact Jennifer Fewell Phillips or another member of Frantz Ward’s Labor and Employment Group.