Yesterday, the U.S. Department of Labor released its long-awaited updated overtime rule proposal. Under the proposed rule, the minimum salary level at which an employee can be exempted from federal overtime and minimum wage requirements (assuming other criteria are met) would increase from $455 per week ($23,660 annually) to $679 per week ($35,308 annually). If enacted, more than a million more workers would become eligible for overtime under the proposed rule.
During the month of September, the Department of Labor will be holding a series of “Listening Sessions” throughout the country in order to hear public comments about planned changes to the overtime rules under the Fair Labor Standards Act.
On this blog, we have followed the long and winding path of the years-long efforts to update the FLSA’s overtime rules (see our posts on the subject here, here, here, here, here, here, here, here, here, and here). To recap, in 2014, the Obama Administration set out to overhaul the overtime rules, and, after nearly two years, issued a set of final regulations, which were to have gone into effect on December 1, 2016. Among other things, these regulations would have increased the minimum salary threshold for exempt workers from $455 per week to $913. This change would have dramatically increased the number of workers who would be classified as non-exempt, and therefore eligible to earn overtime pay. However, after President Trump’s election, and just days before the regulations were to take effect, a federal court issued an injunction halting the changes. After almost a year of litigation and uncertainty, the Trump Administration finally abandoned the Obama Administration’s regulations and went back to the drawing board and started the entire rulemaking process over from scratch.
Back in September, we reported that the Trump Administration had abandoned the appeal of an injunction blocking new overtime rules from going into effect. That action effectively killed the Obama Administration’s effort to update and expand the overtime rule by raising the “salary level test” for executive, administrative, and professional workers from $455 per week to $913 per week. At the same time, the Trump Administration signaled that a scaled-down update of the overtime rule was on the way … eventually.
The U.S. Department of Labor recently initiated a nationwide pilot program referred to as the Payroll Audit Independent Determination (“PAID”) program. The stated purpose of the program is to facilitate resolution of potential overtime and minimum wage violations under the Fair Labor Standards Act (“FLSA”). The expectation is that FLSA claims will resolve more expeditiously and without litigation thus improving employer compliance with wage and hour laws and getting back wages to employees more quickly.
In a brief court filing on Tuesday, the Trump Administration dropped its appeal of the injunction preventing the Obama Administration’s new overtime rule from going into effect.
The new overtime rule, which was supposed to have gone into effect last December, would have raised the “salary level test” for executive, administrative, and professional workers from $455 per week to $913 per week. Continue Reading Overtime Rule Update: Trump Administration Drops Its Appeal
A few weeks ago, the Department of Labor filed a brief with the Fifth Circuit Court of Appeals in which it backed away from the $913 per week salary level test set in the 2016 amendments to the FLSA overtime rules. In that brief, the DOL stated that it would soon publish a request for information seeking public input to be used by the DOL in drafting a new proposed overtime rule.
While inauguration day is still several weeks away, employers are already wondering what is in store for them when Donald Trump takes office as the forty-fifth president. Throughout his campaign, Mr. Trump has set forth a number of promises and proposals that could have significant effects on American employers. It remains to be seen whether any of these proposals will become a reality, but the following are some of the top issues that employers will be watching.
Minimum Wage: On the campaign trial, Mr. Trump has said that he favors increasing the federal minimum wage to $10 per hour (up from the current $7.25), although such a move is not supported by Republicans in Congress. Even if the federal minimum wage increased to $10, it wouldn’t affect Massachusetts employers since the state minimum wage is already $10, and is set to increase to $11 per hour on January 1, 2017.
Overtime: The Department of Labor’s new overtime rule—which raises the FLSA’s minimum salary level for exempt employees to $47,476 per year—goes into effect on December 1, 2016, well before Mr. Trump takes office. However, Mr. Trump has said that he would like to see a “carve out” exempting small businesses from the new overtime rules. Also, lobbyists from the retail industry have indicated that they will try to persuade the Trump administration to eliminate the rule’s automatic triennial salary level adjustment.
Paid Leave for New Mothers: In an initiative spearheaded by his daughter, Ivanka—a working mother herself—Mr. Trump has promised to provide six weeks of paid maternity leave for new mothers. While the specifics have yet to be worked out, the plan calls for providing new mothers with temporary benefits through the unemployment insurance system rather than direct payments from employers. The plan does not appear to make any provision for new fathers, and it is unclear as to whether the proposed benefits will be available in cases of adoption and surrogacy.
Child Care: Mr. Trump has also promised to help workers deal with the high cost of child care. He has proposed an “above-the-line” deduction for child care costs on parents’ tax returns. He has also proposed the creation of tax-exempt dependent care savings accounts, into which parents could deposit up to $2,000 per year. Mr. Trump’s savings account proposal also calls for the government to provide a 50% match on the first $1,000 of contributions for qualifying low-income parents. Finally, Mr. Trump is calling for adding greater incentives, in the form of tax credits, for employers to offer on-site child care.
Healthcare: A centerpiece of Mr. Trump’s campaign has been his pledge to repeal and replace Obamacare. It is not clear, however, what Mr. Trump and the Republican-controlled Congress will replace it with. Some of the more popular aspects of the Affordable Care Act—such as protections for people with pre-existing conditions, and extended coverage for young adults under their parents’ plans—are likely to be retained, according to many pundits. Other changes will be hotly debated, and closely watched by employers, in the coming months.