The Growing Need for Flexible Workforce Models
On May 28, 2026, the U.S. Department of Labor (DOL) issued an Opinion Letter providing meaningful clarification for employers navigating increasingly flexible workforce models. At the center of the guidance is a question many organizations are quietly asking: can an employee classified as exempt also be compensated on an hourly basis for performing different, nonexempt work?
The DOL’s response offers reassurance, but with important guardrails that HR leaders should not overlook. The scenario presented reflects a structure that is becoming more common, where employees perform dual roles to meet business demands.
Understanding the Real-World Scenario and Compliance Concern
The DOL evaluated a healthcare employer that classified Nursing Professional Development Specialists as exempt employees while allowing them to voluntarily pick up additional shifts as staff nurses in a nonexempt capacity.
This dual-role approach raises a natural compliance concern, as employers often worry that introducing hourly pay into an exempt employee’s compensation model could undermine the salary basis requirement or jeopardize exemption status. The guidance confirms that while flexibility is possible, employers must maintain the integrity of the exemption framework.
FLSA Foundations: Duties and Salary Still Drive the Analysis
The Fair Labor Standards Act (FLSA) continues to establish the governing framework. Nonexempt employees must receive minimum wage and overtime, while exempt employees are excluded only if they meet the duties and salary basis tests.
Central to this analysis is the employee’s ‘primary duty,’ defined as their most important responsibility. This is determined through a fact-specific evaluation that includes the relative importance of duties, level of independence, and compensation comparison and not just time spent performing specific tasks.
Why the Exemption Was Preserved in This Case
In this situation, the DOL emphasized that the specialists maintained their full-time exempt roles, continued performing all associated duties, and only occasionally performed additional nonexempt work. That work was voluntary and represented less than half of their overall time, supporting the conclusion that their primary duty remained exempt. Additionally, the employees received a guaranteed salary that met federal requirements, reinforcing compliance with the salary basis test.
Compensation Flexibility—With Important Guardrails
In this instance, the employer layered additional hourly pay on top of the guaranteed salary, which the DOL found permissible. This reinforces that supplemental compensation, whether hourly, per shift, or flat rate does not jeopardize exempt status when properly structured.
The DOL also noted that the employer’s ‘divide-by-40’ method for calculating an hourly rate was acceptable but not required, giving employers flexibility in how they design pay models. The critical consideration is that supplemental pay must not replace or erode the guaranteed salary.
Ongoing Risk: When Roles Begin to Shift
The DOL was clear that its conclusion was highly dependent on the specific facts presented. If, over time, nonexempt work becomes the employee’s primary duty, the exemption could be lost. In that case, employers would be required to comply with overtime obligations based on total hours worked and total compensation. For HR professionals, this underscores the importance of regularly reviewing role expectations, time allocation, and evolving business practices.
Key Takeaway: Flexibility Is Possible But Requires Discipline
The bottom line for employers is clear: it is possible to create flexible compensation structures that allow exempt employees to perform additional nonexempt work without losing their exemption. However, success depends on maintaining a true salary basis, ensuring the employee’s primary duty remains exempt, and consistently monitoring how roles evolve over time. With thoughtful structuring and regular compliance reviews, organizations can achieve both operational flexibility and regulatory alignment.