DOL Will No Longer Issue Substantive Wage and Hour Opinion Letters: Say “Hello” to “Administrator Interpretations”

Shortly after my blog post on March 14th, the DOL announced a new policy regarding the issuance of Wage and Hour Opinion Letters.  Perhaps the blog shook-loose its announcement.  In any event, the DOL’s March 24, 2010 announcement suggests why the DOL has not issued an Opinion Letter in the past year, and it also suggests that future Opinion Letters will be less meaningful.

Under the announcement, the DOL is opting to now issue “Administrator Interpretations” to “set forth a general interpretation of the law and regulations, applicable across-the-board to all those affected by the provision in issue.  Guidance in this form will be useful in clarifying the law as it relates to an entire industry, a category of employees, or to all employees.”

What will be the significance of future Administrator Opinion Letters under this development?  As explained by the DOL in its announcement: “The Wage and Hour Division believes that [issuing Administrator Interpretations] will be a much more efficient and productive use of resources than attempting to provide definitive opinion letters in response to fact-specific requests submitted by individuals and organizations, where a slight difference in the assumed facts may result in a different outcome.  Requests for opinion letters generally will be responded to by providing references to statutes, regulations, interpretations and cases that are relevant to the specific request but without an analysis of the specific facts presented.”

What does this mean?  Under Section 259 of the Portal-to-Portal Act, the act which controls cases brought under the FLSA, Opinion Letters signed by the Wage and Hour Administrator provide significant defenses to employers who rely on those opinions.  Thus, if an Opinion Letter provides substantive guidance to an employer indicating that a particular payroll practice or exemption is appropriate under the FLSA, then the employer will not be liable for any backpay or damages resulting by its reliance on the letter and following the same practice. 

An “Administrator Interpretation” does not equate to an Administrator’s Opinion Letter — it is not a letter signed by the Administrator.  Therefore, given that future “Opinion Letters” will merely refer parties to the law and regulations and require them to make their on interpretations and analyses, there will be no substantive guidance provided.  As a result, the DOL is essentially declining to issue the types of guidance Congress expressly envisioned by enacting the Portal-to-Portal Act.

What else does this mean?  The DOL is essentially leaving the development of the law to the courts.  Rather than providing guidance that will have the weight of regulation or the Department’s official interpretation, parties will have no choice but to navigate these perilous waters without being able to obtain the DOL’s “blessing” that the practices at issue are legal.  Will this foster compliance and reduce litigation?  Likely, no.

The next questions are to the DOL.   While “interpretations” may be helpful, why not provide them in the context of official Opinion Letters?   What policy is being fostered by this change in a practice and application of Section 259 that has been around for over 60 years?  Why doesn’t the DOL wish to fully stand behind its interpretations, as it has done under the former Opinion Letter practice? 

Will we ever know?

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