On September 30, 2025, the Department of Labor (DOL) Wage and Hour Division (WHD) issued four opinion letters regarding tip pooling for certain front-of-house restaurant employees, emergency pay for firefighters under the Fair Labor Standards Act (FLSA), joint employment, and Family and Medical Leave Act (FMLA) leave.
Front-of-House Oyster Shuckers as Tipped Employees
In opinion letter FLSA2025-03, the WHD concluded front-of-house oyster shuckers are employed in a customarily and regularly tipped occupation and employers are permitted to take a tip credit for these employees and include them in a tip pool.
Under the FLSA, employers are required to pay non-exempt employees no less than the federal minimum wage for all hours worked. Employers are permitted to pay tipped employees a wage as low as $2.13 per hour. The employer may then satisfy the $7.25 federal minimum wage requirement by taking a tip credit up to $5.12 per hour. When an employer takes a tip credit, the employer may require all tipped employees to contribute their tips to a tip pool. However, only certain employees can be included as tipped employees.
The DOL reaffirmed its longstanding position that regular customer-facing duties are essential to the tipped employee classification, while workers with limited or incidental customer interaction, such as dishwashers who occasionally perform other duties, do not qualify. In this case, the WHD determined that front-of-house oyster shuckers could be classified as tipped employees and included in the tip pool. Since these employees customarily and regularly interact with customers, share oyster offerings, make recommendations, and answer questions, their role is comparable to sommeliers and chefs who perform in view of customers. As such, employers may take a tip credit and include these employees in a tip pool.
Employer takeaway: Ensure that employees classified as tipped employees engage in sufficient customer interaction. Such interactions can justify inclusion in tip pools and the use of the tip credit under the FLSA. Conversely, misclassifications may result in costly wage and hour violations.
Emergency Pay for Firefighters and Regular Rate of Pay
In opinion letter FLSA2025-04, the WHD concluded that emergency pay for firefighters is not excludable from the regular rate of pay because payment is not within the sole discretion of the employer at or near the end of the work period, and the pay does not otherwise fit within a statutory exclusion.
The FLSA requires employers to pay all non-exempt employees at least one and a half times the regular rate of pay for all hours worked over 40 in a workweek. The regular rate generally includes all remuneration received; however, the FLSA permits an employer to exclude some payments from the regular rate of pay if both the payment and the amount are determined at the sole discretion of the employer at or near the end of the period and not made pursuant to any prior agreement where the employee is to expect the payment. These payments are often called discretionary bonuses. The FLSA also provides that payments made outside of the specified work periods are overtime premiums and may be excluded from an employee’s regular rate of pay. However, extra pay provided by premium rates cannot be treated as overtime premiums.
Based on the above, the WHD concluded that emergency pay must be included when determining the regular rate of pay used to calculate overtime premiums for non-exempt employees. The WHD explained that emergency pay does not qualify as a discretionary bonus. Emergency pay is predetermined and not subject to the employer’s sole discretion after the work is performed. It also does not qualify as an excludable overtime premium under the FLSA.
Employer takeaway: Not including all remuneration in the regular rate, unless subject to a specific exclusion, is a common pitfall for employers. Employers should evaluate all payments and remuneration received to determine whether it should be included in the regular rate. Payments similar to 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 Ownership and Operations
In the next 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. Therefore, the hours worked across both entities must be combined for FLSA compliance.
The WHD opined that corporate formalities do not necessarily override the FLSA’s application. Here, the two facilities are operationally integrated, including their physical proximity, the sharing of a kitchen, and similar food and beverage offerings. While the restaurant and member club may have separate management teams, some managers periodically supervise and manage both, and the facilities have common ownership. Additionally, the ability to clock into one facility and perform work for the other and working for the same hourly rate at both are strong indications of joint employment. Thus, WHD determined that the restaurant and members-only club were joint employers, and all hours worked for both employers must be combined for FLSA compliance and overtime pay calculations.
Employer takeaway: When entities have common ownership, management, and operations, an employee may be jointly employed if working for both entities. This 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 Calculation for Pitman Schedule Employees
In the last 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 correctional law enforcement 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, and while mandatory overtime may count against entitlement, voluntary overtime may not.
Employer takeaway: FMLA leave entitlement must reflect an employee’s actual work schedule, including mandatory overtime but excluding voluntary hours. For employees on non-standard schedules like the Pitman schedule, employers should convert leave to an hourly equivalent based on actual hours worked. Confer with employment counsel to ensure leave tracking systems accurately reflect this requirement to maintain compliance and avoid improper leave deductions.
