On September 30, 2025, the U.S. Department of Labor’s Wage and Hour Division released four new opinion letters interpreting the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). The opinion letters clarify how the agency currently interprets several recurring wage and hour issues, including restaurant tip pooling, firefighter "emergency pay," joint employment between related entities, and calculation of FMLA leave for employees working extended shifts.

Opinion letters are official written interpretations issued by the DOL’s Wage and Hour Division to explain how federal wage and hour laws apply in specific factual scenarios. While not binding on courts, these letters provide persuasive guidance to employers and can serve as a good-faith defense if relied upon for compliance decisions. September 30 marks the first set of opinion letters issued since the DOL announced its expanded opinion letter program earlier this year.

Tip Pooling and 'Customarily and Regularly' Tipped Employees

In one letter, the DOL concluded that front-of-house oyster shuckers who interact directly with customers may be included in a restaurant’s tip pool with servers for whom the employer takes a tip credit. Under the FLSA, employers may require employees paid on a tip credit to participate in a tip pool only if the pool is limited to employees who "customarily and regularly receive tips."

Employees qualify as "customarily and regularly tipped" when they perform service-oriented functions and have sufficient interaction with customers, according to the letter. The agency compared front-of-house oyster shuckers to sommeliers and sushi chefs — positions previously recognized as tipped occupations — because they engage with patrons by describing oyster offerings, making suggestions, and preparing food in customers' view. By contrast, kitchen-based shuckers without customer interaction may not participate in a tip pool funded by tipped employees.

The bottom line is that employers should document a service-interaction rationale for each role in tip pools (not simply "front‐of‐house" versus "back‐of‐house"), and always consult state and local laws, which may impose stricter standards than the federal tip-pool rule.

'Emergency Pay' and the Regular Rate of Pay

In another opinion letter, the DOL determined that "emergency pay" provided to firefighters and other municipal employees for work performed during officially declared emergencies must be included in the employee’s regular rate of pay when calculating overtime.

The city’s policy paid designated emergency employees a premium equal to one-half of their regular hourly rate for each hour worked during an "emergency period." The DOL’s Wage and Hour Division found that the payment did not qualify as an excludable discretionary bonus because both the fact and amount of the payment were determined in advance, not at the employer’s sole discretion at the end of the period. Nor did the pay fall under any other statutory exclusion. Accordingly, the premium must be included in the regular rate when computing overtime compensation.

This logic likely extends beyond firefighters and municipal employees — any predetermined premium or "surge/response" pay that lacks true discretion likely must be included in the regular rate.

Joint Employment Between Related Entities

The DOL addressed whether a hostess working for both a hotel restaurant and a members-only club located on the restaurant’s second floor was jointly employed by the two entities. Although the establishments operated under separate corporate structures and payroll systems, they shared ownership, management, and a common kitchen and menu.

The DOL concluded that the restaurant and club were "horizontal" joint employers under the FLSA, meaning the employee’s hours for both must be combined each workweek when determining overtime eligibility. Both entities are jointly and severally liable for compliance.

The opinion letter highlights that separate legal entities are not insulated from joint employment issues if they share management, scheduling, or payroll practices, even if they maintain different timekeeping systems.

Calculating FMLA Leave for Employees Working Extended Shifts

In the only FMLA opinion letter of the group, the DOL clarified how to calculate FMLA entitlement for correctional law enforcement employees working a fixed schedule of 12-hour shifts that includes mandatory overtime.

The department advised that employers should base FMLA entitlement on an employee’s actual, normally scheduled workweek, including mandatory overtime hours, but should exclude voluntary overtime that employees are not required to work. Under this approach, an employee working 84 hours over a two-week period would have a 12-workweek FMLA entitlement equivalent to 504 hours. When tracking leave usage, employers should deduct only the hours the employee would have been required to work but for the FMLA absence, consistent with the federal code.

Employers with nontraditional/extended-shift schedules (such as health care, utilities, and manufacturing) should embed this logic into leave-tracking systems.

Key Takeaways for Employers

• Tip Pooling: Employees who directly engage with customers, such as front-of-house oyster shuckers, may be included in a tip pool when a tip credit is taken. Back-of-house employees without customer contact may not.
   
• Emergency Pay: Premium payments tied to emergency work must generally be included in the regular rate when calculating overtime unless they are truly discretionary.
   
• Joint Employment: Entities with common ownership, management, or coordinated operations may be deemed joint employers even if they maintain separate corporate structures or payroll systems.
   
• FMLA Calculations: For employees working nontraditional or extended shifts, employers should base FMLA entitlement on the employee’s actual normal schedule, including mandatory overtime but excluding voluntary hours.

These opinion letters do not reflect significant policy or interpretive changes, but the DOL’s Wage and Hour Division’s renewed issuance of opinion letters signals a more active period of agency interpretation and enforcement.

Employers should review existing pay practices and leave policies for consistency with the principles reflected in these opinions. It is noteworthy that, in two of the three FLSA letters referenced above, the requests were initiated by employees, and in both instances the DOL supported the employee's position. Consequently, employers should not presume that the DOL’s Wage and Hour Division will issue a series of pro-employer opinions in the coming three years.

Click here to subscribe to our latest alerts and insights.