U.S. Department of Labor Issues Three Wage and Hour Opinion Letters

WASHINGTON, DC – The U.S. Department of Labor today announced three opinion letters that address compliance issues related to the Fair Labor Standards Act (FLSA). An opinion letter is an official, written opinion by the Department’s Wage and Hour Division (WHD) on how a particular law applies in specific circumstances presented by the person or entity that requested the letter.

The opinion letters issued today are:

• FLSA2021-3: Addressing whether the operations of certain entities satisfy the “establishment” requirement under Section 13(a)(3) of the FLSA, and whether an accrual method of accounting may be used to satisfy the “Receipts Test” under Section 13(a)(3)(B).

• FLSA2021-4: Addressing whether a restaurant may institute a tip pool under the FLSA that includes both servers, for whom the employer takes a tip credit, as well as hosts and hostesses, for whom a tip credit is not taken.

• FLSA2021-5: Addressing the proper calculation of overtime pay under the FLSA when a tipped employee works as a server and bartender, and receives tips and amounts charged as automatic gratuities or service charges.

“The Wage and Hour Division remains committed to providing clear guidance and compliance assistance to workers and employers,” said Wage and Hour Administrator Cheryl Stanton. “Moreover, providing additional guidance on properly paying tipped employees augments the Department’s recently finalized rule, adding further clarity for workers and employers under these new requirements.”

Those interested can search the Department’s website for existing opinion letters by keyword, year, topic and other filters. The Department also encourages the public to submit requests for opinion letters to WHD to obtain an opinion or to determine whether existing guidance already addresses their questions. The Division exercises its discretion in determining whether and how it will respond to each request.

With today’s release, the Wage and Hour Division has now issued 76 opinion letters since Jan. 20, 2017.

WHD’s mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the nation’s workforce. WHD enforces Federal minimum wage, overtime pay, recordkeeping, and child labor requirements of the FLSA. WHD also enforces the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the FMLA, wage garnishment provisions of the Consumer Credit Protection Act, and a number of employment standards and worker protections as provided in several immigration related statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis Bacon Act and the Service Contract Act and other statutes applicable to federal contracts for construction and for the provision of goods and services.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.