On February 19, 2021, the U.S. Department of Labor’s Wage and Hour Division (WHD) withdrew two FLSA opinion letters, further signaling a return to more employee-friendly policies.
The first, FLSA2019-6, addressed the status of independent contractors for an unnamed virtual marketplace company (VMC) and took a more expansive view of independent contractors than the WHD’s approach during the Obama Administration. This letter was withdrawn consistent with the Department’s February 5, 2021 announcement of its delay of the final rule on the same subject: “Independent Contractor Status Under the Fair Labor Standards Act.” The withdrawal of the letter and the delay of the proposed final rule are intended to allow WHD additional opportunity to review and consider the final rule.
The second, FLSA2019-10, related to whether time spent sleeping is compensable time for truck drivers. The letter opined that time truckers spend sleeping is presumptively non-compensable, as long as it is for a sufficient length in adequate facilities and the employee is relieved of all duties. The WHD withdrew the letter, stating that it was inconsistent with the Division’s longstanding position that, under certain conditions, employees could go a maximum of eight hours of sleep time without compensation. Prior letters consistent with the WHD’s longstanding interpretations which were withdrawn by FLSA2019-10 are reinstated.
The withdrawal of these letters means that employers can no longer rely on them for purposes of a defense to DOL or private enforcement action, including a good faith defense to liquidated damages. Employers may still be able to cite them for actions taken during the period when they were in effect. Companies that have been relying on the DOL’s approach under the Trump Administration in these areas should reexamine their practices to minimize their risk of liability.