As expected, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced the withdrawal of three opinion letters issued in the waning days of the Trump administration. The opinion letters being withdrawn are:
- FLSA2021-4, which addressed whether a restaurant may institute a tip pool under the Fair Labor Standards Act 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;
- FLSA2021-8, addressing whether certain distributors of a manufacturer’s food products are employees or independent contractors under the FLSA; and
- FLSA2021-9, addressing whether requiring tractor-trailer truck drivers to implement safety measures required by law constitutes control by the motor carrier for purposes of their status as employees or independent contractors under the FLSA, and whether certain owner-operators are properly classified as independent contractors.
WHD is withdrawing the opinion letters because they were issued “prematurely … based on rules that have not gone into effect”—namely, the Final Rule on Independent Contractor Status Under the Fair Labor Standards Act (which was scheduled to take effect on March 8, 2021) and the Final Rule on Tip Regulations Under the Fair Labor Standards Act (which was scheduled to take effect on March 1, 2021). Both Final Rules were subject to President Biden’s January 20 regulatory freeze memo, which asked the executive departments and agencies to delay the effective date of any non-emergency rule published in the Federal Register but not yet effective, pending review—and likely withdrawal or revision—by a department or agency head appointed or designated by the Biden administration.
We expect Biden’s DOL—under the leadership of Marty Walsh, pending Senate confirmation—to conduct a thorough review of the 69 other FLSA opinion letters issued under the Trump administration. A number of those opinion letters are likely to be withdrawn in the months to come, as WHD aligns itself with the new administration’s agenda.
Proskauer’s Wage and Hour Group is comprised of seasoned litigators who regularly advise the world’s leading companies to help them avoid, minimize, and manage exposure to wage and hour-related risk. Subscribe to our wage and hour blog to stay current on the latest developments, and check out the latest Biden administration developments impacting employers on Proskauer’s Law and the Workplace blog.