Interesting FLSA and FMLA Issues Arise in 2026 as well as Remote Workers Working Hours

Earlier this month, the Department of Labor issued a few interesting opinion letters which will be of interest to both employers and employees.  One involved the FMLA and the others the FLSA.  In FMLA2026-2, the DOL instructed that FMLA time off includes time travelling to and from the medical provider office, which should not have been necessary to explain.  In FLSA2026- 2, the DOL confirmed that the regular rate must include the generous safety/punctuality bonus when calculating overtime pay.  In FLSA2026-4 (1/5/26), the DOL explained that the federal exemption for commissioned workers in section 7(i) only requires that the pay be more than the federal minimum wage, but that the employer could still be in violation of similar exemptions under state  law if the pay was not sufficiently higher than the higher state minimum wage and that tips only count towards the pay if the employer utilizes the tip credit.  Finally, in September, the federal district court in Columbus issued an opinion on when a work-from-home employee’s working hours begin and end each day. 

In Opinion FMLA2026-2  (1-5-26), the inquiry asked about how much time off the FMLA would require when the medical provider indicated that the employee needed time off for 45-minute medical appointments, but the employee claimed that s/he needed 1 hour travel each way from home to the office of the medical provider.  “For the reasons set forth below, an employee may use FMLA-protected leave that counts against his or her FMLA entitlement to travel to or from a medical appointment for a serious health condition.” Additionally, a health care provider need not provide an estimate of an employee’s travel time to or from an appointment for the medical certification to be complete and sufficient under the Act. “

In Opinion FLSA2026- 2 (1-5-26), the inquiry involved whether the regular rate (used to calculate overtime pay) must include the safety/punctuality bonus (up to $9.50/hour) on top of the $12/hour wage contractual rate when calculating overtime anytime it is earned.    The answer was yes.  “[T]he rule for determining the regular rate of pay is to divide the wages actually paid by the hours actually worked in any workweek[.]”

In FLSA2026-4 (1/5/26), the inquiry involved the commissioned employee’s exemption under section 7(i) when state minimum wage exceeds federal minimum wage.   The DOL explained “an employee of a qualifying retail or service establishment paid more than one and one-half times the federal minimum wage satisfies the minimum pay standard in section 7(i)(1). “  Therefore, “the exemption currently requires that the employee’s regular rate exceed $10.875 per hour ($7.25 × 1.5)—or, for practical purposes, that the employee’s regular rate be at least $10.88 per hour—for any workweek in which the employer claims the exemption.”  That being said, this does not answer whether using the federal minimum wage could violate the state law which requires employers to pay a higher minimum wage.

Moreover, although tips are not commissions under section 7(i), in some circumstances, a portion of an employee’s tips would be compensation for purposes of determining whether an employee is primarily paid by commission under section 7(i)(2).  This would depend on whether employer utilizes the tip credit or not. 

In Lott v. Recker Consulting, LLC, 798 F. Supp. 3d 778 (S.D. Oh 2025), the Court addressed  when the workday begins for remote workers.  Plaintiffs claimed that they were not paid for time spent logging and clocking in before work and end of lunch and logging out each day – entitling them to unpaid overtime, etc.  The Court decided that

the workday starts at the moment a remote worker opens and begins operating a program or application they use as part of the principal work activities they are employed to perform. By the same token, the workday ends at the moment the employee closes out of the last such program or application. In the Court's view, this better reflects the relationship between the employee and the computer in terms of job performance.

The Court rejected the argument that the workday began as soon as the employee turned on his or her computer. 

In short, the question is not when an employee has powered on or logged into their computer. Rather, the question is when they have configured that computer to perform the tasks they are employed to perform—or stated differently, when they have loaded the first application that they use to perform their job.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

DOL Issued FLSA Opinion Letters Concerning Longevity Pay, Referral Bonuses and Employee Education.

 

The DOL was busy in 2020 issuing FLSA opinion letters.  Three of those opinion letters concerned whether referral bonuses should be included in the regular rate for purposes of calculating overtime compensation, one concerned a similar question about longevity bonuses and one concerned whether employers must pay employees for participating in voluntary training during or outside normal working hours.  The Obama Administration did not issue any such opinion letters and it remains to be seen whether the Biden Administration will continue this practice.

In FLSA Op. No. 2020-3, the City employer passed a resolution entitling employees to incentive compensation after five years of full-time employment in the amount of $2/month for each year of employment.  The City currently pays it out every two weeks, but was considering paying it in a year-end lump sum.   The DOL explained that its longevity pay was not a gift because the employees were legally entitled to the payments, even though the legislation left it to the City officials to determine the timing and form of the payments.   If the legislation had indicated that the City “may” provide longevity pay up to a certain amount, instead of “shall” provide longevity pay in a specific amount, then the resolution would have merely authorized the payments instead of requiring them.  Lump sum longevity payments whose amount, if any, would not be measured by or dependent on hours worked, production or efficiency, were not legally required and were awarded, if at all, in the discretion of the employer could be excluded from the regular rate as “payments in the nature of gifts.”  Because the resolution mandated both the payment and amount of the bonus, it was a legally enforceable part of the employees’ wages and must be included in the regular rate when calculating overtime pay.

In FLSA Op. No. 2020-4, the employer paid a generous referral bonus to an employee upon the hiring of a worker whom the employee referred and another generous bonus if both the worker and the employee were still employed a year later.    Because the first bonus was paid upon the hiring of the worker and it was not part of the employee’s duties to recruit or hire the worker, the bonus was not related to the employee’s work and need not be included in the employee’s regular rate.

[S]ums paid to an employee for recruiting another to join his or her employer’s workforce are not part of the recruiting employee’s remuneration for employment, if the following conditions are met (1) participation in recruitment activities is strictly voluntary, (2) the employee’s efforts in connection with recruitment activities are limited to after-hours solicitation among friends, relatives, neighbors and acquaintances as part of the employee’s social affairs.

Otherwise, referral bonuses “generally would constitute remuneration for employment and must be included in the regular rate unless another statutory exclusion applies.”  For instance, there is a statutory exclusion for payments similar to gifts made at Christmas time “or on other special occasions, as a reward for service” and the amount of the payment is not measured by or “dependent on hours worked, production, or efficiency.”  In addition, “if the bonus ‘is so substantial that it can be assumed that employees consider it part of” their wages or is paid pursuant to a legally binding contract, then it would not be considered as a gift.

Nonetheless, because the second part of the bonus was contingent in part on the employee remaining employed, it was similar to a longevity bonus which rewards the referring employee for an additional year of service.   If the bonus was payable regardless of whether the referring employee remained employed or was payable after a brief period of time (like a single pay period), then it would not be contingent on the employee’s longevity and would similarly not be includable in the regular rate.  In addition, if there was no contractually binding obligation to pay the second part of the referral bonus, and the policy merely announced the “timing and amount of the payment,” it may still qualify as a type of gift instead of a longevity bonus.   “Mere preannouncement of the timing and amount of a longevity bonus does not prevent that bonus from being excludable as a gift . . .”

Finally, FLSA Op. No. 2020-15 explored when an employer was required to compensate employees while attending voluntary training (whether continuing professional education, courses directly related to their jobs and courses unrelated to their job).  Generally, training the employee receives during normal working hours is compensable even though the employee could have received the training outside normal work hours.  An employer is permitted to require employees to attend such training outside normal work hours, when it would generally not be compensable.  The DOL did not approve the employer’s practice of requiring employees to use paid time off to attend courses during working hours.

In general, the DOL regulations provide that ‘attendance at lectures, meetings, training programs and similar activities need not be counted as working time” if the following criteria are met: the employee’s attendance is voluntary and not during her regular working hours; the employee does not perform any productive work during the attendance and, with two exceptions, the course/lecture is not directly related to the employee’s job.  One of the exceptions is when the employer establishes educational programs which correspond to courses offered by independent bona fide educational institutions and are voluntarily attended by employees outside of working hours.  Another exception is when the employee voluntarily attends an independent school, etc. after working hours even if the courses are related to her job.

Assuming that employee attendance was voluntary and the employee did not perform any productive work, the DOL addressed the following situations:

1.      The employer is NOT required to compensate an employee who uses tuition reimbursement to attend outside working hours a webinar that is directly related to her job and also satisfies professional continuing educational requirements.

2.      It is questionable whether an employer is required to compensate an employee who uses tuition reimbursement to attend a webinar outside working hours that is directly related to his job, but does not satisfy professional continuing educational requirements because it was unclear whether the webinar corresponds to courses offered by educational institutions.

3.      The employer is required to compensate the same employee who attends the webinar during working hours.  It is irrelevant that the employee could have chosen to attend outside normal working hours.

4.      The employer is required to compensate an employee who uses tuition reimbursement to attend during working hours a webinar that does not satisfy professional continuing education requirements and is not directly related to his job.

5.      The employer is required to compensate an employee who uses tuition reimbursement to attend a webinar during working hours that is required for professional continuing education, but is not directly related to her job.

6.      The employer is NOT required to compensate an employee who uses tuition reimbursement to attend a weekend seminar outside her normal working hours that is directly related to her job and satisfies professional continuing educational requirements and is also not required to compensate her for her personal time traveling to and from the seminar even though the travel occurred during her normal working hours.   The travel at her own option for her sole convenience is not considered to be working hours.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.