On May 28, 2026, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued four opinion letters addressing a series of hot-button wage and hour issues under the federal Fair Labor Standards Act (FLSA). Some topics addressed include the compensability of voluntary off-site meal break travel and pre-shift activities, the treatment of “percentage of total earnings” bonuses, and the exemption status of employees performing secondary non-exempt work. For a summary of each letter and key takeaways, review these highlights below.
Compensability of Meal Break Time for Voluntary Off-Site Travel
Facts: An employee works at an expansive, secured facility with parking located far from the work site. The employer provides an unpaid 30-minute meal break and allows employees to leave the work site during the break. The employee chooses to leave the work site for meal periods and, after traveling through the facility and security checkpoint, is left with only 10-15 minutes. The employee states this discourages employees from taking off-site meal breaks.
Question: Is time spent on voluntary off-site travel during a meal break compensable?
Answer: No, voluntary off-site travel time is not compensable if the employer provides a “bona fide” meal period, which requires that the employee be relieved of all duties during the break and be given sufficient time to eat a meal (i.e., at least 30 minutes). The WHD explains that:
- Employers are not required to provide “absolute freedom” and may place certain limitations on the break (e.g., requiring the employee to remain on premises).
- Minimal restrictions do not convert meal periods into compensable time, even if an off-site meal is “difficult to undertake in the time provided[.]”
- Employees have the discretion to use the meal period to eat or tend to personal matters.
Compensability of Pre-Shift Activities
Facts: Employees at a public hospital with approximately 18,000 non-exempt employees are subject to timekeeping practices that:
- Permit employees to clock in up to 7 minutes early to avoid bottlenecks at the timekeeping stations;
- Prohibit employees from clocking out early at the end of a shift; and
- Round clock in and clock out times to the scheduled start and end times (i.e., rounding a 6:53 a.m. clock-in up to 7:00 a.m. and rounding a 7:07 p.m. clock-out down to 7:00 p.m.).
Certain non-exempt employees routinely engage in pre-shift work activities immediately after clocking in before their scheduled start time. These activities include those that are integral to their principal job duties. Although the hospital is capable of capturing this time with its existing timekeeping system, the hospital does not compensate employees for their pre-shift work.
Question 1: Is pre-shift work performed after clocking in compensable, given its regular and integral nature?
Answer: Yes, based on the facts, at least some of the pre-shift activities are compensable because they are “integral and indispensable” to the employees’ principal job duties, including respiratory therapists receiving “handoff reports” on patient status and locating work assignments. These activities are “intrinsically related to the employees’ principal job duties and cannot be dispensed with if the employees do not perform them.”
Question 2: Does time spent waiting due to timekeeping station bottlenecks constitute compensable work time, particularly when followed by immediate work duties?
Answer: No, time spent waiting in line to clock in before the first principal activity and clock out after the last principal activity is not compensable because it is not integral and indispensable to the employees’ principal job duties.
Question 3: May the hospital invoke the de minimis doctrine to exclude losses of up to 7 minutes per employee, considering the aggregate impact?
Answer: It depends.
- NO: To the extent that each day, employees are performing compensable work prior to their paid shifts commencing, such work is unlikely to be de minimis.
- YES (maybe): To the extent that pre-shift compensable work is irregular, the practical administrative difficulty of recording the time may justify treating it as de minimis.
The WHD cautions employers to be particularly careful when applying the de minimis doctrine and to expect “exacting scrutiny” of de minimis claims where employees perform “off-the-clock” work with any degree of regularity because technological advances make it possible to track employees’ work time with “increasing precision.”
Question 4: Does the hospital’s rounding policy comply with the FLSA?
Answer: It depends. The critical question is “whether a rounding practice, evaluated over a period of time, is facially neutral and operates neutrally such that it does not systematically undercompensate employees for hours worked.”
- NO: If the employees are performing compensable work after clocking in up to 7 minutes before their shift start time and are not permitted to clock out early, the rounding policy is not neutral because it only benefits the employer. As applicable here, the hospital employees performing compensable work during the 7 minutes prior to the scheduled start time “are always uncompensated for that time and are not afforded a chance for over-compensation to average that time.”
- YES: The rounding policy would be compliant if it is facially neutral and employees actually benefit from rounding in other circumstances (e.g., employees clocking in up to 7 minutes late are credited with starting at their scheduled time and that practice averages out over time to offset work time lost due to rounding of early clock ins).
Calculation of Quarterly Bonuses as a “Percentage of Total Earnings”
Facts: The employer provides a quarterly bonus to eligible employees, including some who work overtime and are entitled to overtime compensation. At the end of each quarter, the employer determines the number of eligible employees and available bonus pool based on the quarterly sales revenue, and generates a “gross earnings” report, which includes quarterly straight-time and overtime compensation earned by the employees. The employer then calculates each employee’s share by dividing each employee’s total gross compensation (straight-time and overtime) by the total gross compensation paid to all eligible employees for the quarter and multiplies the percentage by the bonus pool to determine each employee’s quarterly bonus.
- Employee Bonus = (Employee’s Total Gross Compensation ÷ Total Gross Compensation of All Eligible Employees) × Bonus Pool.
Question: Does a quarterly bonus based on a pool of sales revenue that factors in straight-time and overtime pay qualify as a “percentage of total earnings” bonus?
Answer: Yes, the bonus qualifies as a “percentage of total earnings” bonus because the formula incorporates both straight-time and overtime earnings, thereby accounting for and paying out any overtime compensation due on the bonus. Thus, the employer need not recalculate the regular rate or pay additional overtime compensation.
While non-discretionary bonuses generally require employers to recompute an employee’s regular rate to add in the bonus and pay for additional overtime resulting from the adjusted rate, the WHD explained that “percentage of total earnings” bonuses factor in both straight-time and overtime pay, so overtime compensation is already built in.
The WHD’s response assumes that the employer used correct overtime calculations; applied the quarterly method consistently; and that the earnings did not include items excluded from the “regular rate,” such as gifts, discretionary bonuses, expense reimbursements, or employer contributions to employee benefit plans.
Exempt Status of Employees Performing Secondary Non-Exempt Work
Facts: A hospital employee works in an exempt-classified role as a Nursing Specialist but occasionally picks up shifts in a non-exempt role as a Staff Nurse. These shifts typically make up about 23% to 38% of their total hours worked per week for which the employer pays an hourly rate.
Question: Can an employer employ an individual in both overtime-eligible and overtime-exempt positions without affecting their exempt status?
Answer: Yes, an employee may perform both exempt and non-exempt work without losing their exemption, so long as the exemption requirements remain satisfied and their primary duty remains the performance of exempt work. Among other things, the WHD:
- Noted that the employees spent the “substantial majority” of their time in the exempt Nursing Specialist role, while only picking up “one or two” supplemental weekend shifts in the non-exempt Staff Nurse role;
- Explained that employers may pay exempt employees additional compensation for hours worked beyond the normal workweek without violating the salary-basis requirement or defeating the exemption; and
- Concluded that the Nursing Specialists maintain their exempt status even though they perform some non-exempt work and receive additional hourly compensation for the work.
For a detailed analysis, see our June Insight HERE.
Employer Takeaways
While the opinion letters provide some practical pointers, employers should be mindful that the WHD’s responses are fact-specific. Accordingly, employers should consult with counsel for wage and hour issues specific to their organization and practices. Some best practices to take away from the guidance include the following:
- Audit meal periods, pre-shift activities, and timekeeping practices to identify potential off-the-clock work and ensure employees are properly compensated for all compensable time.
- Pay for work that is integral and indispensable to employees’ principal duties, even if it occurs before a scheduled shift or outside regular working hours.
- Exercise caution when relying on the de minimis doctrine or rounding practices, particularly where technology allows employers to accurately track employee work time.
- Audit rounding policies and practices to ensure they do not systematically undercompensate employees for time spent performing compensable work.
- Review bonus plans for FLSA compliance, particularly where non-exempt employee bonuses are tied to employee earnings, and ensure that bonus calculations properly account for overtime compensation and regular-rate requirements.
- Review dual-role positions regularly to ensure exempt employees’ primary duty remains exempt work.
- Document job duties and compensation practices to support continued exempt classification under the FLSA.
- Ensure wage and hour practices comply with more protective state and local laws, which may impose stricter requirements than the FLSA.
If you have any questions related to these opinion letters, or need assistance reviewing your organization’s wage and hour policies and practices, please reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100 or 619.292.0515.