On April 27, 2017, the Senate confirmed R. Alexander Acosta as the Secretary of Labor. More than four months after President Trump took office, the U.S. Department of Labor finally had a new leader.
In the ten weeks since Secretary Acosta took office, the DOL has been very busy, with a number of important actions that directly affect employers.
- Withdrawal of Joint Employer and Independent Contractor Interpretations. On June 7, the DOL announced that it was withdrawing its 2016 and 2015 Administrator Interpretations on joint employment and independent contractors. With this action, the Trump Administration DOL confirmed that it would walk back from the more expansive interpretations of joint employer status and employment status in independent contractor situations adopted by the Obama DOL. This action does not mean that employers no longer face risk from possible joint employer or independent contractor situations. Instead, the DOL has indicated that it will return to the more traditional interpretations of these concepts used by the DOL under prior Administrations.
- Revising the Persuader Rule. On June 12, the DOL issued a notice of proposed rulemaking to rescind and revise the enjoined so-called Persuader Rule. The Obama-era Persuader Rule would have greatly expanded the reporting and disclosure requirements imposed on employers and consultants (including lawyers) with respect to labor relations advice and services under the Labor-Management Reporting and Disclosure Act’s “persuader activity” regulations. The Obama-era Persuader Rule was permanently enjoined in November 2016, and it appears that the Trump DOL will be taking action to formally rescind the blocked rule and perhaps issue new regulations that could further modify existing reporting and disclosure requirements.
- Return of Opinion Letters. On June 27, the DOL announced that its Wage and Hour Division will reinstate the practice of issuing opinion letters to provide guidance to employers and employees on the laws it enforces. The Obama DOL had ceased issuing opinion letters in 2010, and the return of opinion letters will be welcomed by employers as a useful tool when interpreting the requirements of the Fair Labor Standards Act and other federal wage and hour laws.
- Compliance Date Pushed Back for Electronically Submitting Injury and Illness Reports to OSHA. Also on June 27, the DOL’s OSHA announced that it was delaying the compliance date for electronic reporting of injury and illness data set forth in its May 2016 regulations from July 1, 2017 until December 1, 2017. Under the Obama DOL, OSHA intended to use the electronic submission of this data to post injury and illness data on its website from all workplaces with 20 or more employees and for those in certain high-risk industries, making the information publicly available for unions, plaintiffs’ attorneys, and others. In its June 27 press release, OSHA indicated that it intends to revisit and further consider the controversial rule.
- Clarification of Position on the FLSA Overtime Exemption Regulations. On June 30, the DOL filed its Reply Brief with the Fifth Circuit Court of Appeals in the pending appeal of the preliminary injunction blocking the 2016 salary-related changes to the FLSA white-collar overtime exemption regulations from taking effect. As we have discussed at length in this blog, the Obama-era regulations more than doubled the minimum weekly salary requirement for most white-collar overtime exemptions from $455 to $913. In November 2016, a federal district court enjoined the regulations from taking effect on December 1, 2016, and the DOL appealed this decision.
In its Reply Brief, which was the first opportunity for the Trump DOL to state its formal position on the controversial regulations, the DOL argued that the injunction blocking the regulations should be reversed, because it was based on the legal conclusion (which the DOL still believes is erroneous) that the DOL lacks the authority to impose any minimum salary requirement as part of the exemptions’ tests. However, the DOL asked the Fifth Circuit not to address the validity of the specific minimum weekly salary level of $913 set by the 2016 regulations, because the DOL intends to revisit the salary level through the issuance of new regulations in the future.
The DOL’s position, as set forth in its Reply Brief, raises additional questions and seemingly muddies the waters even further. Specifically, if the Fifth Circuit ultimately agrees with the DOL’s position as stated its Reply Brief, what would be the fate of the challenged 2016 regulations and their $913 weekly salary requirement? What would be the minimum salary required for the FLSA white-collar overtime exemptions before the DOL could issue new final regulations on the minimum salary level? On June 27, the DOL sent a Request for Information related to the overtime rule to the Office of Management and Budget for its review, indicating that it intends to initiate the rulemaking process on this issue. However, it will take many months, if not a year or more, for the DOL to complete the rulemaking process and issue a final rule to supersede the challenged 2016 overtime regulations.
Unfortunately, the DOL’s Reply Brief seemingly raised more questions than it answered, which is not good for employers who simply wish to know the legal requirements they must meet. We now will await oral arguments on the appeal and a decision sometime in the future.
With a Secretary of Labor now in place, we expect the DOL to continue its recent pace of activity. Stay tuned.