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Biden’s Wage and Hour Division Shies Away From Opinion Letters

Nov. 21, 2022, 10:00 AM

The US Labor Department’s wage arm is taking a more cautious approach to a certain type of regulatory guidance, vexing employers and management-side attorneys who say the directives are helpful for decoding complex labor laws.

So far, the DOL’s Wage and Hour Division hasn’t issued a single opinion letter, which the agency historically has used to explain its interpretation of how the law would apply in a specific situation in response to a request from a business.

An agency top official said the DOL is wary of clarifying its position in such letters because they’re meant to be used to answer very specific inquiries, and can serve as a legal defense in the event of a future lawsuit or Wage and Hour Division investigation.

“They cut off rights,” Deputy Solicitor of Labor Elena Goldstein said at the American Bar Association’s annual labor and employment law conference in Washington, D.C., earlier this month.

“They mean that workers who are covered by that particular opinion letter may not, in appropriate circumstances, be entitled to wages, may not be entitled to liquidated damages,” she said. “And so I think it is incredibly important that the Wage and Hour Division is really careful with respect to thinking about those opinion letters and thinking about their scope because they have directed real implications potentially, for folks on the ground.”

Obama Playbook

That caution echoes the approach of the Obama administration, and represents a stark departure from the Trump DOL. The latter issued dozens of opinion letters ranging from obscure issues like insect farm worker overtime eligibility to some of the most contentious questions in the employment landscape, like how truck drivers and app-deployed gig workers should be classified under wage laws.

Management-side attorneys say the shift away from providing opinion letters can make it harder for businesses to navigate the law.

“The law itself has a hard time catching up with the modernized workforce, things like the gig economy, things that obviously Congress really wasn’t considering back in the 30s. And as you know, as the modern workforce evolves, I don’t think the law always catches up,” said John Ho, an attorney at Cozen O’Connor’s New York office.

“I think that’s why opinion letters become a very useful tool not just for employers, quite frankly, but for industry, trade groups, and also employees and unions,” he said. “The more clarity there is in some of these questions that aren’t so clear, is helpful for everybody.”

Kathleen Caminiti, partner and co-chair of Fisher Phillips’ Wage and Hour practice in New Jersey, agreed that the move away from opinion letters “limits the ability to gut check a practice for an employer, so that’s disappointing at some level.”

Instead of opinion letters, which Goldstein described as a “narrow tool” for providing guidance because they are so fact-specific, the DOL has provided “substantial and comparable” amounts of compliance assistance, she said.

Under the Biden administration, the agency has issued a handful of fact sheets and “toolkits” targeted toward helping the public and employers understand how to comply with the law. The agency also released several field assistance bulletins that act as guidance on the wage division’s enforcement position, Goldstein explained.

“By issuing something that is more general, we are able to provide guidance to folks who want to comply with the law and to workers who are in these situations about what to do,” she said.

Future of Opinion Letters

Management-side attorneys say they are resigned to the return to pre-Trump practices.

“I think it’s fair to say that most of us on the management side expect a freeze, maybe not a total freeze, but certainly a very limited use on opinion letters,” Ho said. “Unfortunately, you know, for employers and businesses, we probably just resigned ourselves to the fact that just going to be a resource that’s just not going to be available.

Considering that it’s two years into the Biden administration, and developing opinion letters take time and are labor-intensive, Caminiti said she similarly wouldn’t expect a lot of opinion letters. Instead, she expects an emphasis on field assistance bulletins.

DOL’s Goldstein earlier said that opinion letters weren’t off the table, however. The agency is always open to requests, she said, but added that the department is particularly interested in legal “gaps relating to novel issues that impact vulnerable workers.”

To contact the reporter on this story: Rebecca Rainey in Washington at rrainey@bloombergindustry.com

To contact the editors responsible for this story: Genevieve Douglas at gdouglas@bloomberglaw.com; Laura D. Francis at lfrancis@bloomberglaw.com