Employee Classification Guidance

In a 2026 opinion letter, the U.S. Department of Labor (the “DOL”) provided guidance regarding employee classifications under the Fair Labor Standards Act (the “FLSA” or the “Act”). The FLSA generally requires covered employers to pay employees at least the federal minimum wage for all hours worked and overtime pay at a rate of one and one-half times the employee’s regular rate of pay for all hours worked over 40 in each workweek. However, the FLSA establishes various exemptions from its wage and hour requirements. For example, the Act provides exemptions from both minimum wage and overtime pay requirements for any employee employed in a bona fide executive, administrative, or professional capacity. Federal regulations provide specific criteria that must be satisfied for FLSA exemptions to apply.

The FLSA prohibits employers from misclassifying non-exempt employees as exempt. However, employers have the discretion to classify employees who meet the standard for FLSA exemptions as non-exempt. In its 2026 opinion letter analyzing a real-world employee classification issue, the DOL opined that, despite an employee satisfying the criteria for the professional exemption, the employer was permitted to reclassify the exempt employee as non- exempt. As stated by the DOL in its opinion letter, “it is the employer – not the employee – that claims the exemption.” For employers, understanding how to properly classify employees is vital to ensuring FLSA compliance.

For additional information and guidance pertaining to employee classification issues, please contact a Labor & Employment Law attorney at Appel Yost.