On September 30, 2025, the Department of Labor (DOL) Wage and Hour Division (WHD) issued four opinion letters regarding key wage and hour issues under the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). These letters address tip pooling eligibility for certain front-of-house restaurant employees, emergency pay, and its impact on overtime calculations, joint employment in shared business operations, and FMLA leave for employees on nonstandard schedules.
For employers, especially those in hospitality, emergency services, and shared business operations, these clarifications offer guidance and insight on compliance.
Tip Pools and Front-of-House Oyster Shuckers
In opinion letter FLSA2025-03, the WHD concluded that employers may take a tip credit and include front-of-house oyster shuckers in a tip pool, provided they work in a customarily tipped occupation and regularly interact with customers.
The opinion letter emphasizes that under the FLSA, engagement in regular customer-facing duties is essential to the tipped employee classification. Here, front-of-house oyster shuckers customarily and regularly interact with customers, share oyster offerings, make recommendations, and answer questions, similar to sommeliers and chefs who perform their job duties in view of customers. Employees with limited or incidental customer interaction, such as dishwashers who occasionally perform other duties, do not qualify as tipped employees.
Employer Takeaway: Employers should ensure that tipped employees engage in regular customer interaction. This is key to employees qualifying for inclusion in tip pools and the use of the tip credit under the FLSA. Misclassification of employees who lack sufficient customer-facing duties can expose businesses to wage and hour liability.
Emergency Pay and Regular Rate of Pay
Opinion letter FLSA2025-04 clarifies that emergency pay for firefighters must be included in the regular rate of pay when calculating overtime. This is because the payment is not within the sole discretion of the employer at or near the end of the work period, and the pay does not fit within any statutory exclusion.
The FLSA permits some exclusions from the regular rate, such as discretionary bonuses and overtime premiums. Emergency pay, however, does not meet any exclusion criteria. Simply labeling a payment as a “premium” or “extra” does not make it excludable. Emergency pay is predetermined and not subject to the employer’s sole discretion after the work is performed. Emergency pay for nonexempt employees must be included in the regular rate of pay and factored into overtime calculations.
Employer Takeaway: Not including all remuneration in the regular rate, unless subject to a specific exclusion, is a common pitfall for employers. Employers should carefully evaluate all payments and remuneration received to determine whether it should be included in the regular rate. Payments like emergency pay or other premiums and bonuses generally must be factored into the regular rate of pay when calculating overtime. Employers cannot treat emergency pay or similar payments as a discretionary bonus or excludable premium. Employers should have employment counsel review their pay policies for FLSA compliance.
Joint Employment in Shared Operations
In opinion letter FLSA2025-05, the WHD determined that an employee working for both a restaurant and a members-only club located in the same hotel, with shared ownership, management, and operations, is jointly employed. As a result, the hours worked across both entities must be combined for FLSA compliance.
The WHD emphasized that corporate formalities do not necessarily override the FLSA’s application. Factors such as physical proximity, a shared kitchen, similar menus, common ownership, and managers who periodically supervise and manage both entities contributed to the joint employment finding. Additionally, the ability of an employee to clock into one facility and perform work for the other and working for the same hourly rate at both further supported the conclusion.
Employer Takeaway: Businesses that share employees and have common ownership, management, and operations should assess whether their employees are jointly employed. Joint employment can affect overtime and other wage and hour issues. Employers must ensure FLSA compliance by evaluating operational integration and scheduling practices to assess joint employment risks.
FMLA Leave for Pitman Schedule Employees
Lastly, in opinion letter FMLA2025-02-A, the WHD clarified that employers must include all regularly scheduled hours, including mandatory overtime, when calculating FMLA leave entitlement for employees working a fixed “Pitman Schedule,” which is a 12-hour rotating shift pattern employers use to have continuous employee coverage. This ensures the leave entitlement reflects the employee’s actual workweek.
FMLA regulations allow employers to convert leave from workweeks to hours to account for varying schedules, typically resulting in 480 hours over 12 weeks for a 40-hour schedule. For Pitman Schedule employees in this instance, the WHD confirmed that converting a 12-week entitlement to 504 hours is appropriate for employees scheduled to work 84 hours every two weeks. Only the amount of leave actually taken should be deducted from the FMLA entitlement. Importantly, mandatory overtime counts against the leave entitlement, while voluntary overtime does not.
Employer Takeaway: FMLA leave entitlement must reflect an employee’s actual work schedule, including mandatory overtime but excluding voluntary hours. For employees on nonstandard schedules like the Pitman Schedule, employers should convert leave to an hourly equivalent based on actual hours worked. Accurate tracking is essential to avoid compliance issues, and consulting employment counsel can help ensure compliance and prevent improper leave deductions.
For questions regarding the opinion letters, please reach out to a member of Ice Miller’s Workplace Solutions team.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.