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February 3, 2026
On January 5, 2026, the Wage and Hour Division (WHD) of the United States Department of Labor (WHD) issued four Opinion Letters addressing questions raised under the Fair Labor Standards Act (FLSA).
This article addresses the first of those four letters and is Part 1 of a 4-part series.
Opinion Letters provide official written interpretations from the WHD that address questions raised by individuals or organizations and explain how laws apply to specific factual circumstances. Opinion Letters are intended to promote transparent and consistent application of the FLSA, including to educate other individuals or entities that may be impacted by the issue presented.
In short, Opinion Letters provide valuable insights for employers and employees alike on important issues related to compensation and overtime rules.
The WHD’s first Opinion Letter (FLSA2026-1) addresses the “learned professional” exemption and confirms that employers retain full discretion to classify employees as non-exempt, even if the employee meets all the criteria for an exemption under the FLSA.
The FLSA generally requires covered employers to pay employees at least the federal minimum wage for all hours worked and overtime pay for all hours worked over 40 in a workweek. The FLSA includes numerous exemptions from its wage and hour requirements that must satisfy a three-part test: (1) the employee is paid on a salary basis; (2) the employee is paid at or above the salary threshold; and (3) the primary duty test is satisfied. The “learned professional” exemption, for example, requires that the employee’s “primary duty” must involve the performance of work requiring advanced knowledge in a field of science or learning which is customarily acquired by a prolonged course of specialized intellectual instruction.
The employee at issue is a Licensed Clinical Social Worker for a healthcare organization, who the employer had historically classified as a “salaried (exempt)” employee. The employee has had supervisory responsibilities for the last several years. As part of an internal restructuring, the employer recently reclassified the employee to “hourly (non-exempt)” and removed the supervisory responsibilities. The WHD found that, as described, the employee’s core job duties qualified as a learned professional under the primary duties test, even without supervisory responsibilities. However, due to the change to an hourly wage, the employee likely no longer met the requirements for the learned professional exemption to apply.
The WHD explained that the employer claims the exemption, not the employee. Therefore, employers may choose to classify employees that meet all three parts of the exemption test as non-exempt for business reasons, provided the employer pays the employee the federal minimum wage and overtime premiums for hours worked over 40 hours in a workweek. The WHD further explained that the FLSA prohibits the misclassification of a non-exempt employee as an exempt one, not the other way around. Thus, the employer “retains the prerogative” to classify an employee as non-exempt and can make lawful business decisions to not apply an exemption (e.g., to have more control over the employee’s pay if the employee works fewer hours in certain weeks).
Of course, employers should always carefully consider the classification of employees as exempt or non-exempt. This Opinion Letter particularly reinforces that employers have discretion to classify an employee as non-exempt, so long as the employer properly pays minimum wage and overtime premiums.
This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice. Always consult an attorney with specific legal issues.
