Labor Department clarifies overtime, bonuses and compensable time rules

A salaried Big Lots manager who stocks freight, covers a register, or stays late to finish closing may still be exempt, but the Labor Department’s newest guidance also makes clear that retail pay questions do not disappear just because a worker wears two hats.

The Wage and Hour Division issued four opinion letters on May 29, 2026, numbered FLSA2026-5 through FLSA2026-8. The department said the letters were meant to bring clarity, consistency and transparency to Fair Labor Standards Act issues, and it reiterated that Administrator-issued opinion letters can be used as a good-faith defense under Section 10 of the Portal-to-Portal Act.

One letter, FLSA2026-5, says secondary non-exempt hourly work does not automatically change an employee’s exempt status if the primary duty remains exempt and salary requirements continue to be met. In a Big Lots store, that is the difference between a manager helping unload a truck for an hour and a manager whose job has effectively turned into hourly floor labor. Another letter, FLSA2026-6, says the described quarterly bonus provided simultaneous payment of any overtime compensation due on the bonus, satisfying the act’s overtime requirement. That matters in retail, where bonus formulas often touch total earnings, hours worked and whether overtime is properly folded in.

The remaining letters go straight to shift-work problems that can happen in any store. FLSA2026-7 asks whether time spent traveling off-site voluntarily for a meal must be counted when determining whether a meal period is compensable. FLSA2026-8 addresses pre-shift activities, waiting time, de minimis time and whether rounding employees’ clock-in time is permissible. If an associate is asked to count tills, stage freight, unlock a stockroom or handle a bag check before punching in, those minutes can become the kind of off-the-clock time that triggers a dispute later.

Big Lots is a pointed example because the chain filed for Chapter 11 bankruptcy on September 9, 2024, said it would close nearly 300 stores, and later saw its case converted to Chapter 7 effective November 10, 2025. Alfred T. Giuliano was appointed chapter 7 trustee. The company has also faced wage-and-hour litigation before: in California appellate litigation decided on November 20, 2020, former Big Lots store managers said they spent less than half their time on managerial tasks and should have been paid overtime.

For store managers, keyholders and hourly associates, the practical takeaway is blunt. Extra duties do not always mean extra pay, but they can change the math fast, especially when a lean schedule spreads one person across freight, register coverage, closing and cleanup. The safest record is still the simplest one: actual hours, actual breaks and actual work performed.