Revival of Opinion Letters Signals DOL Will Listen to Employers More Closely

Opinion letters provide employers with a shield from liquidated damages

By Allen Smith, J.D. Jul 5, 2017
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​By reviving opinion letters, the Department of Labor (DOL) is sending the message that it genuinely wants to hear from employers on the compliance issues troubling them, according to Alexander Passantino, an attorney with Seyfarth Shaw in Washington, D.C., and former acting administrator of the DOL's Wage and Hour Division (WHD). 

Employers have a wide range of questions they would like the WHD to answer that haven't been addressed since the DOL discontinued opinion letters in 2010 and replaced them with more general administrator interpretations (AIs).

By focusing only on AIs that address issues that the administration deems important, the DOL "took away one of the most significant ways for the WHD to know which issues were most troubling the regulated community," he said. Although the DOL announced on June 27 that opinion letters would return, it will take some time for them to be issued because a WHD administrator has not yet been appointed, noted Eric Magnus, an attorney with Jackson Lewis in Atlanta.

"Reliance on DOL opinion letters is one of the strongest arguments an employer can make in support of a good-faith defense," even if a court disagrees with a DOL opinion letter and ultimately finds that an employer's actions violated the law, said Brett Coburn, an attorney with Alston & Bird in Atlanta. If an employer prevails on a good-faith defense, it will not be liable for liquidated damages, which typically are a doubling of actual damages, he noted.

Numerous Issues to Be Addressed in Opinion Letters

There will be a flood of questions from HR professionals to the DOL for its views in opinion letters, Magnus predicted. But the department will need to reinstate a structure to deal with opinion letters because the old set-up for processing them has been dismantled.

Many of the questions may concern whether technology jobs qualify for white-collar exemptions from minimum wage and overtime requirements, he noted.

[SHRM members-only toolkit: Determining Overtime Eligibility in the United States]

Alternative pay practices—such as on-call shifts—are more prevalent now than when opinion letters were last issued, so they may also be the subject of opinion letters, Magnus said.

It will be interesting to see how willing the DOL is to reverse positions taken by the Obama administration, he added. Under the Obama administration, for example, if an employee spent more than 20 percent of his time on nontipped duties, the employer would lose the tip credit. Whether that position, among others, will survive in the current administration remains to be seen.

Because opinion letters are issued much faster than court decisions, employers can learn what practices the DOL approves or disapproves of before instituting them, he noted.

There are bound to be more opinion letters than there were AIs, as the AIs went through painstaking review, noted Steven Suflas, an attorney with Ballard Spahr in Denver and Cherry Hill, N.J. "And although the opinion letters are tailored to the specific facts of employer inquiries, they have always provided insights into the agency's thinking."

Good News for Employees and Employers

"When the DOL chose to stop issuing wage and hour opinion letters, employers trying to design compensation plans or otherwise comply with the FLSA [Fair Labor Standards Act] could no longer run their plans by the DOL for assurance that they were compliant," said Robert Boonin, an attorney with Dykema in Detroit and Ann Arbor, Mich. "As a result, employers had to proceed more at their own risk and hope they got it right. With the return of opinion letters, hopefully the DOL will be getting back into the business of proactively helping employers comply with the FLSA."

"The reinstatement of the issuance of opinion letters is a very positive development for employees and employers," said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., and former acting administrator of the WHD. "Opinion letters are keys that help both employees and employers better understand their rights and obligations, respectively, in order to comply with the FLSA, Davis-Bacon Act and other laws for which the WHD issues interpretations."
He added, "Unlike the more generalized AIs issued during the last administration, opinion letters are explanations of how such laws would apply in more fact-specific scenarios provided by the requester."

And, as Passantino said, "Opinion letters allow WHD to provide needed clarity on how a 1938 law implemented by—in some cases—regulations [or] interpretive bulletins from 1961 applies in a workplace in 2017."

 

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