DOL Updates
New DOL Opinion Letters Address Unpaid Meal Periods, Nonprofit Employee Volunteers, and Tip Pooling for Supervisors
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APPLIES TO All Employers |
EFFECTIVE SEP 7, 2026 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
On September 7, 2026, the Department of Labor’s (DOL) Wage and Hour Division (WHD) issued three opinion letters under the Fair Labor Standards Act (FLSA). The letters address (1) whether a meal period can stay unpaid when employees must walk to a designated break area, (2) when employees of a nonprofit may volunteer for their employer without that time counting as paid work, and (3) whether a restaurant supervisor who also tends bar may share in other employees’ tips.
While not binding law and typically tied to specific fact patterns, the DOL’s opinion letters reflect the agency’s interpretation of the law and provide insight into potential enforcement strategies. Key takeaways from each are summarized below.
FLSA2026-11 | Travel Time During Unpaid Meal Periods. A security therapy aide at a detention facility asked whether a 60-minute unpaid meal period established by a collective bargaining agreement (CBA) could remain unpaid when employees are required to walk three to seven minutes each way to a designated break area, leaving approximately 46 to 54 minutes available at the break area itself.
The WHD concluded that the meal period qualifies as a bona fide meal period under the FLSA, because the employees are relieved of all work duties during the break, and the time remaining after the walk (even at the maximum reported travel time of 14 minutes) far exceeds the 30 minutes that is ordinarily sufficient for a bona fide meal period. The WHD explained that the length of travel time is not itself determinative; the analysis focuses on whether employees are relieved from duty and whether enough time remains to eat comfortably.
The WHD reasoned that, because the FLSA does not require employers to provide meal periods, the central question when they do is whether the time qualifies as a “bona fide meal period.” Under the WHD’s framework, a break of 30 minutes or more is ordinarily sufficient, though shorter periods may qualify under certain circumstances. Rest breaks of up to 20 minutes, by contrast, are generally compensable because they primarily benefit the employer. The WHD cautioned that if required travel time significantly reduces an otherwise sufficient meal period, that could change the outcome. To illustrate, the WHD pointed to a Fifth Circuit case in which up to 12 minutes of required travel during a 30-minute break was enough to find the remaining 18 minutes insufficient as a bona fide meal period. The WHD distinguished that result here, given that employees retained substantially more time after their walk to the break area.
The WHD further clarified that the DOL (along with most federal courts) evaluates meal period compensability under the “predominant benefit” test, which does not require that employees be completely free from every limitation or condition during the break. The WHD noted that the Ninth and Eleventh Circuits are outliers that apply a stricter “completely relieved from duty” standard, which may affect how this analysis applies to employers in those jurisdictions. Finally, the WHD clarified that its analysis addressed only FLSA compensability and did not reach whether the meal period satisfied the terms of the CBA, which is governed by the agreement itself and applicable labor law.
For employers, this highlights the importance of evaluating meal period practices on a case-by-case basis. Whether a break qualifies as a bona fide meal period depends on a number of factors, including the length of the break, the amount of required travel time, and the jurisdiction, and the outcome may differ across locations, employee groups, and applicable state law.
FLSA2026-12 | Nonprofit Employee Volunteers. A private nonprofit that breeds, raises, and trains service dogs asked whether certain exempt employees (including veterinarians, trainers, and directors who oversee trainers) could volunteer outside their regular working hours as home caretakers for young dogs.
According to the WHD, the same volunteering framework that applies to public-sector employees also applies to employees of private religious, charitable, and nonprofit organizations. Under that framework, an employee may volunteer for a nonprofit employer only if the employee does so freely, without direct or implied pressure; has no expectation of pay; and performs services that are not the same type of services the employee is employed to perform. Volunteers may receive reimbursement for expenses, reasonable benefits, or a nominal fee, but not payment that functions as a substitute for wages. An employee cannot waive the right to compensation simply by calling the work “volunteering.”
The WHD indicated that the determination of whether volunteer services are the “same type” as the employee’s paid work is fact-specific and focuses on actual duties rather than job titles, noting that O*NET occupational classifications can serve as a useful reference point when comparing the two roles. Applying this analysis to the positions at issue, the WHD reached different conclusions depending on the role.
In this case, veterinarians and directors were found eligible to volunteer because the WHD found their normal duties (e.g., performing medical care and supervising employees) as sufficiently different from the volunteer activities, which included training and socializing young dogs. Trainers, however, were found ineligible to “volunteer,” as the WHD concluded that the training and socialization of young dogs was the same as or sufficiently similar to the work they were employed to perform.
The WHD also noted that exempt status does not change the threshold analysis of whether an employee may volunteer, meaning both exempt and nonexempt employees may volunteer if the three conditions above are satisfied, and neither group may volunteer to do the same work they are paid to do.
That said, where the work is not true volunteering, the WHD’s position is that exemption status affects compensation, meaning that a nonexempt employee must be paid for all combined hours worked, while an exempt employee’s salary can cover the additional work so long as the employee’s primary duty remains the performance of exempt work.
The WHD clarified that its conclusions rested on several assumptions about the duties performed by each role in this situation, noting the analysis may be different if presented with different facts. For employers, this serves as an important reminder that employee classifications must be reviewed on a role-by-role basis, and what may constitute “volunteer” work for one role may not qualify for another.
FLSA2026-13 | Supervisors and Tip Pools. A restaurant server wrote to ask whether a “shift supervisor” at the restaurant could collect a share of servers’ tips when working bartending shifts and assisting hosts and bussers. Under the restaurant’s tip-out arrangement, servers shared a percentage of their sales with bartenders, hosts, and bussers. The supervisor primarily performed management functions (e.g., scheduling employees and determining when their shifts ended) but also worked periodic bartending shifts and, during those shifts, took a cut of both the servers’ tip-out and amounts intended for hosts and bussers.
The WHD concluded that a supervisor who meets the definition of a manager or supervisor under FLSA section 3(m)(2)(B) may not keep any portion of other employees’ tips, regardless of whether the supervisor also works tipped shifts alongside frontline employees. This prohibition applies whether or not the employer takes a tip credit.
According to the WHD, the definition of “manager” or “supervisor” for this purpose depends on actual duties, not job title. The WHD applies the executive duties test drawn from the FLSA’s overtime exemptions, which asks: (1) whether the employee’s primary duty is managing the business or a recognized department, (2) whether the employee regularly directs the work of at least two or more other full-time employees, and (3) whether the employee has authority to hire or fire, or makes recommendations about such decisions that are given particular weight. Owners with at least a bona fide 20 percent equity interest who are actively engaged in management also qualify under the WHD’s interpretation. Notably, the WHD takes the position that the salary requirements associated with the overtime exemption do not apply here, meaning a nonexempt, overtime-eligible employee, such as a lead server, shift captain, or key holder, can still meet the definition and be barred from sharing in others’ tips.
Ultimately, the WHD concluded that it lacked enough facts to decide conclusively whether this particular employee met the test, because the request did not describe the supervisor’s role in hiring, firing, or promotion. Notwithstanding, the WHD took the position that an employee may satisfy the definition without meeting every requirement of the overtime exemption.
Assuming a particular role meets the definition of “supervisor” or “manager,” the WHD went on to describe circumstances where supervisors may still be entitled to keep tips. The WHD indicated that a supervisor may keep tips left by customers for service that the supervisor directly and solely provides, for example, tips left by bar customers when the supervisor is working behind the bar alone. If, however, the supervisor’s tips are pooled with other bartenders’ tips and split, such that they cannot be attributed solely to the supervisor’s own service, the WHD’s position is that the supervisor may not take any share of the distribution. A manager who helps servers during a rush may not keep any of the customers’ tips, but may keep tips from tables they personally cover. The WHD also stated that employers may require a supervisor who receives direct tips to contribute some of them to a tip pool for eligible employees, although it did not address the question in reverse (e.g., what happens when an employee whose primary duty is bartending or serving works occasional shifts in a management capacity).
The WHD closed by emphasizing the importance of compliance, noting that an employer can be liable for the tips that a supervisor improperly keeps, and can lose the tip credit for any affected tipped employee whose tips were improperly given to the supervisor. This means that an employer who normally takes a tip credit could owe affected tipped employees the full minimum wage for those hours worked.
Action Items
- Review meal period practices for compliance with applicable requirements, including any travel time considerations and stricter state or local standards.
- For employers that use employee volunteers, review volunteer role classifications on a role-by-role basis with legal counsel for compliance.
- Review tip pool eligibility for all participating employees based on actual job duties.
- Have appropriate personnel trained on the FLSA’s requirements for meal periods, volunteer classifications, and tip pool eligibility.
DOL Clarifies Expanded Scope of USERRA Retaliation Protections
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APPLIES TO All Employers |
EFFECTIVE SEP 8, 2026 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
On September 8, 2026, the DOL’s Veterans’ Employment and Training Service (VETS) issued Opinion Letter USERRA-2026-1, addressing what types of employer conduct qualify as “other retaliatory action” under the Uniformed Services Employment and Reemployment Rights Act (USERRA). In January of 2025, the Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act amended USERRA to prohibit employers from taking any “adverse employment action or other retaliatory action” against employees who engage in USERRA-protected activity.
The opinion letter explains how the DOL interprets that expanded standard in practice. While opinion letters are not binding on courts, they do reflect the agency’s interpretation of the law and offer meaningful insight into how the DOL may approach investigations and complaints under the statute.
As background, USERRA protects employees who leave work for uniformed service, whether voluntary or involuntary, and guarantees reemployment rights and benefits upon return, subject to certain exceptions. The law also protects employees from discrimination and retaliation based on their uniformed service or their exercise of rights under the statute. There are four categories of USERRA-protected activity: taking action to enforce a protection under USERRA; testifying or making a statement in a USERRA proceeding; assisting or participating in a USERRA investigation; and exercising a right provided by USERRA. These protections apply regardless of whether the employee has actually performed uniformed service.
Before the 2025 amendment, USERRA’s retaliation provision prohibited only “adverse employment actions,” a standard that some courts interpreted narrowly to cover only actions affecting the terms and conditions of employment, such as termination, demotion, or a pay reduction. The Dole Act’s addition of “other retaliatory action” was intended to close that gap. According to VETS, the amendment brings USERRA’s retaliation standard into alignment with the broader standard applied to retaliation claims under Title VII of the Civil Rights Act, which covers a wider range of conduct.
The opinion letter explains that the key question, which is drawn from the U.S. Supreme Court’s framework for Title VII retaliation claims, is whether the employer’s action would dissuade a reasonable employee from engaging in USERRA-protected activity. VETS emphasized that context matters, explaining that an action that would not be material in one situation may be actionable in another.
VETS went on to identify the following examples of conduct that may qualify as “other retaliatory action” under this standard:
- Changes to work schedules;
- Transfers to less desirable positions;
- Increased scrutiny of an employee;
- Filing of false criminal charges against an employee;
- Exclusion from professional opportunities; and
- Threats or coercion.
This list should be treated as illustrative, not exhaustive. Whether any particular action rises to the level of retaliation will depend on the full circumstances involved.
The practical significance of this change is that the risk of USERRA retaliation is no longer confined to formal adverse employment decisions. A broader range of management actions can now form the basis of a claim if they follow an employee’s exercise of USERRA-protected activity and would deter a reasonable employee from doing so again. As with all employment decisions, employers should ensure that actions affecting employees are grounded in legitimate, business-related rationale and supported by clear documentation, particularly where an employee has engaged in any form of protected activity, including activity protected under USERRA.
Action Items
- Have appropriate personnel trained on USERRA’s expanded anti-retaliation requirements.
- Consult with legal counsel regarding specific employment decisions involving employees protected by USERRA.
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DOL Updates Minimum Wage Rate for Certain Federal Contractors
Effective January 6, 2027, the minimum wage rate under Executive Order 13658 will increase to $14.05 per hour, with a minimum cash wage of $9.85 per hour for tipped employees. Importantly, these rates apply only to a specific, narrower set of federal contracts: those entered into between January 1, 2015, and January 29, 2022, that were not subsequently renewed or extended on or after January 30, 2022. Federal contractors with covered contracts in that date range should update pay rates for affected workers accordingly.
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