No Items in Cart 
Recently, the U.S. Department of Labor (DOL) released opinion letters discussing critical aspects of wage & hour management, including overtime calculations. Specifically, the September 30 documents informed readers on how to calculate overtime pay for non-exempt employees who earn amounts in addition to their base hourly wage. Additionally, the letters covered the topics of tip pooling and joint employment. Although the opinion letters focused specifically on certain sections of the national workforce (for example, the overtime calculation opinion letter focuses on firefighters and paramedics), the overall concepts included in the resources fall under the Fair Labor Standards Act (FLSA). The FLSA applies to most employers across the majority of workplaces. Earlier, in July 2025, the DOL announced several self-audit programs to help employers, unions, and pension plans assess and improve compliance with federal labor laws.
The Fair Labor Standards Act (FLSA)
As has been noted, overtime calculations, tip pooling, and joint employment are dictated by the FLSA. As the nation’s primary wage law and one of the major employment laws employers must follow, the FLSA establishes minimum wage, overtime protections, and tip regulations for non-exempt part-time and full-time employees.
Overview of the Overtime Calculations Opinion Letter
Generally, under section 13(a)(1) of the FLSA, employees paid above the FLSA’s current salary basis are usually exempt from overtime provisions. To qualify for overtime exemption, employees must have been paid on a salary basis at a rate of not less than $684 per week. These exempt employees must also perform at least one of the duties of an executive, administrative, or professional employee.
Specifically, an opinion letter was drafted in response to a question by an employer of firefighters and paramedics. The employer inquired whether these workers are entitled to receive overtime pay for work performed during a disaster or emergency declaration. In brief, the business believed that the FLSA’s overtime calculations would not apply in situations involving disasters or emergencies. The reasoning was that firefighters and paramedics already receive “emergency pay premiums” during a disaster declaration. They felt that employees should not receive overtime pay in addition to those premiums.
The DOL disagreed with the employer’s argument. The agency stated that, yes, even employees who receive premium pay are subject to the FLSA’s overtime calculations. Moreover, the DOL informed the employer that the agency’s regulations have long provided that the regular rate includes premiums. For example, these premiums could consist of “nightshift differentials” and premiums paid for “hazardous, arduous, or dirty work.”
Finally, the opinion letter includes an explanation of overtime calculations for when an employee earns a premium. That premium pay must be included in the regular rate. Furthermore, the DOL explains that the regular rate is determined by dividing all earnings by the total hours worked. Then, the overtime owed is equal to one-half the employee’s regular rate times the number of overtime hours worked.
Examining the Tip Pool Participation Opinion Letter
Secondly, the DOL issued an opinion letter regarding the subject of tip pooling. Specifically, the response from the government agency was to a seafood restaurant. The restaurant in question wondered if “front-of-house” oyster shuckers needed to be included in a tip pool. In detail, the tip pool at that time only included servers for whom the restaurant received a tip credit. Indeed, the DOL believes that the oyster chefs need to be included.
According to Jackson Lewis, the DOL wrote, “to be an individual who customarily and regularly receives tips, an employee must engage in service-related functions and have sufficient interaction with the customers who leave tips, a portion of which are subsequently contributed to a tip pool.” Given that, the oyster shuckers need to legally be included in the tip pool because they:
- directly interact and engage with customers by sharing and detailing oyster offerings,
- make suggestions regarding the oyster offerings,
- field other questions about the different options, and
- prepare the oysters for and in front of the customers.
Overview of the Joint Employer Opinion Letter
Finally, the DOL received a question regarding the concept of “joint employment.” Basically, a hostess who works at a hotel restaurant and a separate “members only” club on the second floor of the restaurant asked if she was considered, by law, to have joint employment. Her primary concern was that she wasn't earning proper overtime, even though she believed she should, given that she works both jobs. The DOL looked at her specific situation and issued an opinion letter to answer her question.
According to the agency, the hostess is considered “jointly employed” by both entities for the following reasons:
- The restaurant and club are separate legal entities and use different payroll and timekeeping systems.
- The entities are close in physical proximity and operationally integrated, with similar trade names, shared management, and shared ownership.
- A common kitchen and near-identical menu are used.
- Employees who are scheduled to work in the restaurant occasionally are assigned to work upstairs at the club.
- The facilities have identical rates of pay.
- Shift breaks are scheduled not to interfere with possible working hours at the other establishment, indicating coordinated scheduling.
Markedly, the DOL concluded that the establishments jointly employed the employee. Therefore, the hours worked at both establishments must be combined when calculating overtime hours. Also, as joint employers, the establishments are jointly liable for any FLSA violations.
Employer Takeaways
In conclusion, as mentioned previously, although the examples used in the opinion letter involve emergency personnel, oyster shuckers, and hostesses, the FLSA’s laws and regulations apply to most businesses. This publication serves as a timely reminder for all employers to ensure they are adhering to the FLSA's wage and hour rules. If you have any questions, please consult your local labor office or seek the advice of your legal counsel.
