Frozen Regulations Lead To DOL Withdrawing Opinion Letters

Volume: 20 | Issue: 8
February 1, 2021

On January 20, 2021, President Biden ordered all executive departments and agencies to freeze new or pending regulations so that the President’s appointees can review them. This freeze applies to the new independent contractor rule and the revised regulation regarding tipped employees and tip pools we discussed earlier.

In light of this freeze, the U.S. Department of Labor (DOL) has withdrawn three recent opinion letters addressing tip pools and independent contractors. The DOL explains that: “These letters were issued prematurely because they are based on rules that have not gone into effect.”

The following opinion letters have been withdrawn and cannot be relied upon:

  • FLSA2021-4: Addressing whether a restaurant may institute a tip pool under the FLSA that includes both servers, for whom the employer takes a tip credit, as well as hosts and hostesses, for whom a tip credit is not taken.
  • FLSA2021-8: Addressing whether certain distributors of a manufacturer’s food products are employees or independent contractors under the FLSA.
  • FLSA2021-9: Addressing whether requiring tractor-trailer truck drivers to implement safety measures required by law constitutes control by the motor carrier for purposes of their status as employees or independent contractors under the FLSA, and whether certain owner-operators are properly classified as independent contractors.

As always, we will keep you updated on the status of the independent contractor and tipped employee rules under the new administration.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.

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