Tag: DOL

The U.S. Department of Labor Rolls Back Obama-Era Guidance on Joint Employers and Independent Contractors

The U.S. Department of Labor (“DOL”) announced today that it was rolling back an Obama-era policy that attempted to increase regulatory oversight of joint employer and contractor businesses.

Courts and agencies use the joint employer doctrine to determine whether a business effectively controls the workplace policies of another company, such as a subsidiary or sub-contractor. That control could be over things like wages, the hiring process, or scheduling.

Legal IT ConsultantIn a short statement, the DOL signaled that it was returning to a “direct control” standard. “U.S. Secretary of Labor Alexander Acosta today announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors. Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law.”

Until 2015, the DOL interpreted the joint employer doctrine to apply only to cases in which a business had “direct control” over another business’s workplace. In 2015 and then again in 2016, under then-Labor Secretary Tom Perez (currently the Democratic National Committee Chair), the DOL changed its interpretation to state that a business may be a joint employer even if it exerted “indirect control” over another’s workplace. The 2015 and 2016 guidance effectively expanded the conditions for when one business can be held liable for employment and civil rights law violations at another company. Critics of this “indirect control” language argued that it was ambiguous and threatened to throw franchise, parent-subsidiary, and independent contractor relationships between businesses into disarray. Companies, particularly franchises, were particularly concerned that they could face liability at workplaces they did not directly oversee or control.

However, the DOL’s announcement today rescinded its guidance on “indirect control” and also rescinded guidance on independent contractors, which essentially stated that the DOL considered most workers to be employees under the Fair Labor Standards Act and that it was likely to apply a broad definition of “employee” and “employer” when investigating a company’s practices. This decision is a big win for businesses and business groups.

Despite the DOL’s reversal, the Obama-era standard can still be applied to businesses through the National Labor Relations Board (“NLRB”), an independent agency that serves as the government’s main labor law enforcer. The NLRB considers a company jointly liable for its contractors’ compliance with the National Labor Relations Act if they have “indirect” control over the terms and conditions of employment or have “reserved authority to do so.” The NLRB has not rescinded its interpretation. President Trump has yet to pick nominees for the five-member board’s two open seats, which will likely affect the NLRB’s interpretation of the joint employer doctrine and many other NLRB rules, interpretations, and guidance.

The DOL’s guidance does not affect actions taken by other federal agencies.

This post was written by James R. Hays and Jason P. Brown  Sheppard Mullin Richter & Hampton LLP.

The ERISA Fiduciary Advice Rule: What Happens on June 9?

This is an update on the upcoming effective date of the “fiduciary rule” or “fiduciary advice rule” (the “Rule”) that was issued under the US Employee Retirement Income Security Act of 1974 (ERISA). The Rule was published by the US Department of Labor (DOL) in April, 2016. The purpose of the Rule is to cause a person or entity to become a “fiduciary” under ERISA and the US Internal Revenue Code of 1986 (the “Code”) as a result of giving of certain types of advice involving investment of assets of employee benefit plans, such as 401(k) or pension plans, or of individual retirement accounts (IRAs) and receiving compensation for that advice.

calendar hundred daysThe Rule was originally intended to become effective April 10, but in April the DOL extended (the “Extension Notice”) the effective date of the Rule for 60 days (until June 9), and provided for reduced compliance obligations under the Rule from that date through the end of 2017 (the “Transition Period”). The effective date for Prohibited Transaction Exemptions (PTEs), both new and amended, that are related to the Rule also was extended until June 9, and further transitional relief was provided with respect to certain of those PTEs.

In a May 23 Op Ed in the Wall Street Journal, Labor Secretary Acosta announced that the Rule would go into effect on June 9, as provided for in the Extension Notice, and that the DOL would seek additional public comment on possible revisions to the Rule.  He indicated that the DOL “found no principled legal basis to change the June 9 date while we seek public input.”  The DOL also published, on May 23, FAQs on implementation of the Rule and an update of its previously-issued enforcement policy for the Transition Period. Therefore, it is important to review the rules that will go into effect on June 9.

Under the Rule, fiduciary status is triggered by investment “recommendations.” It provides, in general, that if a person (1) provides certain types of recommendations to a plan or its participants and/or beneficiaries, or to an IRA owner (collectively, “Protected Investors”); and (2) as a result, receives a fee or other compensation (direct or indirect), then that person is providing “investment advice for a fee” and therefore, in giving such advice, is a fiduciary to the Protected Investor. Receipt of compensation tied to such recommendations by a person or entity that is a fiduciary could result in prohibited transactions under ERISA and the Code. Under the Extension Notice, the DOL provided simplified compliance requirements under the Rule for the Transition Period.

This post was written by Gary W. Howell, Austin S. Lilling, Gabriel S. Marinaro, Richard D. Marshall, Andrew R. Skowronski, Robert A. Stone of Katten Muchin Rosenman LLP.

Challenges and Priorities for the New Secretary of Labor

secretary of labor alexander acostaAlex Acosta was confirmed by the Senate to be the next Secretary of Labor.  He now takes responsibility for several high-profile issues with critical implications for government contractors.

As we have previously written, the Labor Department was an exceptionally active regulator from 2013 through the end of the Obama Administration.  Although few of us expect that pace to continue, Secretary Acosta will have to balance two competing pressures.  On one hand, the President has already signed a law repealing one of the Labor Department’s most controversial regulations (the Fair Pay and Safe Workplaces rule) and directed agencies to review current regulations with a critical eye.  On the other hand, Acosta will be leading a department charged with enforcing the laws that protect or favor workers’ rights, which sometimes compete with the priorities of their employers.

These potentially opposing viewpoints were on display during Acosta’s confirmation hearing where he was pressed repeatedly by Senators to discuss his views on various regulations.  Asked by Senator Roberts to give his “overall philosophy on regulation,” Acosta emphasized the need to eliminate regulations “that are not serving a useful purpose,” and the need to enable small businesses to thrive.

Some uncertainty remains with respect to two specific cases that government contractors are watching closely.  First, the regulations governing paid sick leave were not raised during Acosta’s confirmation hearing, and Acosta has not publicly opined on them.  They were issued late in President Obama’s second term, and therefore fell within the window of the Congressional Review Act (“CRA”), but the level of chatter about repealing those regulations has lately been quite low.

Second, the Department is currently litigating proposed changes to overtime pay rules.  A district court held last year that the Department acted without authorization by doubling the salary threshold for defining executive, administrative, professional, outside sales, and computer employees (so-called “white collar” employees) from approximately $24,000 to $47,000.  Acosta demurred when Senators asked for his opinion on the merits of the case.  He acknowledged, however, that the large increase was partially a result of the long delay in adjusting the salary threshold, which had not been changed since 2004.  Adjusting for cost of living rises, Acosta suggested, would result in a revised threshold closer to $33,000.  He declined to say whether the Labor Department might change its position in the litigation in the Fifth Circuit, where briefing is scheduled to be complete in at the end of June, or withdraw the rule and propose an alternative.

On a positive note, Acosta expressed support for the practice of publishing detailed “opinion letters” from the Administrator of the Wage and Hour Division.  This practice has been halted since 2009.  This type of guidance, although not binding on a court, could provide helpful clarity to employers with contracts covered by the Service Contract Act and the Davis-Bacon Act.

ARTICLE BY Jeff Bozman, Susan B. Cassidy & Lindsay Buchanan Burke of Covington & Burling LLP
© 2017 Covington & Burling LLP

Update: DOL Regulation For Employers Who Use Direct Deposit and Payroll Debit Cards Invalidated

payroll card DOLOn February 16, 2017, the New York State Industrial Board of Appeals invalidated and revoked the NYS Department of Labor regulations we wrote about previously (and updated here) governing payment of wages by direct deposit or payroll debit card. The regulations were scheduled to take effect on March 7, 2017.

As we described in detail in our previous posts, the new regulations would have required employers to provide notice to employees and obtain consent from those who elected to receive wages via direct deposit or payroll debit card. In addition, the regulations would have imposed various restrictions on the terms of use and the fees associated with payroll debit cards.

In its decision, the Board determined that the regulations exceeded the scope of the DOL’s authority and imposed prohibitions that are beyond its purview. Specifically, the Board likened the fees associated with payroll debit cards to the fees associated with checking accounts and licensed check cashers, which are not subject to regulation by the DOL. The Board concluded that the regulations “go beyond regulation of the employment relationship and into the area of banking law, which is outside [the DOL’s] competence and expertise in the regulation of employment and occupational safety and health.” Further, the Board noted that the policy concern which the regulation sought to address – namely, that low wage workers without access to traditional bank accounts will be coerced into receiving wages by payroll debit card – is already covered by Section 192 of the Labor Law, which governs the payment of wages and which requires advance consent from an employee before an employer can pay wages via payroll debit card.

The DOL has not yet indicated whether it will appeal this decision, but we will be sure to keep you updated on any new developments. In the meantime, employers who have taken steps to comply with the regulations can press pause on those plans, but should ensure that their procedures for payment of wages are in compliance with all other applicable laws and regulations.

ARTICLE BY Michael S. Arnold & Brie Kluytenaar of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

©1994-2017 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

R. Alexander Acosta Picked to Head Department of Labor

Alexander Acosta DOLPresident Donald Trump has nominated R. Alexander Acosta to be Secretary of Labor. His nomination comes one day after Andrew Puzder, Trump’s first pick to lead the Department of Labor, withdrew his nomination.

Acosta, currently the Dean of Florida International University’s law school, is the son of Cuban immigrants. If confirmed, Acosta would be the first Hispanic member of Trump’s Cabinet.

Acosta is a graduate of Harvard College and Harvard Law School. He clerked for Justice Samuel A. Alito, Jr. when Alito was a Judge on the U.S. Court of Appeals for the Third Circuit, in Philadelphia. Acosta then went into private practice at the Washington, D.C. law firm Kirkland & Ellis and taught law at the George Mason School of Law.

Acosta has been confirmed by the Senate three times — to become a National Labor Relations Board member, then to become Assistant Attorney General for the Civil Rights Division of the U.S. Department of Justice, and finally when he was nominated to be U.S. Attorney for the Southern District of Florida.

He was appointed by President George W. Bush as member of the National Labor Relations Board, and served as a Board member from December 17, 2002, through August 21, 2003. Acosta reportedly authored approximately 125 opinions during his tenure on the Board.

Thereafter, Acosta served as Assistant Attorney General for the Department of Justice’s Civil Rights Division under President George W. Bush until June 2005. He later was appointed U.S. Attorney for Southern District of Florida, where he served until becoming the Dean of FIU Law in 2009.

ARTICLE BY Linda R. Carlozzi & Philip B. Rosen of Jackson Lewis P.C.
Jackson Lewis P.C. © 2017

Trump Directs Reexamination of the Fiduciary Rule Changes

DOL Fiduciary RulePresident Donald Trump issued a memorandum late last week directing the Department of Labor to reexamine the anticipated changes to the fiduciary rule applying to most retirement plans and individual retirement arrangements. The changes are set to go into effect on April 10, 2017; however, the memorandum directs the Department of Labor to conduct a full review to determine whether to rescind or revise the rule. Initial reports indicated that implementation of the rule was being delayed, but the memorandum ultimately issued by the President did not include a delay. The Department of Labor released a statement following the issuance of the memorandum indicating it would consider its legal options to delay implementation. It is not clear how quickly the Department of Labor may reach a conclusion on a delay of implementation.

The anticipated changes expand the definition of fiduciary under the Employee Retirement Income Security Act of 1974 (“ERISA”) and subject more financial advisors to fiduciary standards under ERISA. The new fiduciary rule is aimed at eliminating a potential conflict of interest by subjecting retirement plan advisors to fiduciary standards under ERISA if the advisor receives variable compensation tied to the investments the advisor recommends to the plan. Advisors could avoid harsh penalties under the rule by providing specific disclosure and agreeing to abide by a “best interest” standard of conduct. We are aware that some advisors were preparing to implement significant business model changes to comply with the anticipated rule changes.

What this means for employers –

  • Employers/benefits committees should evaluate whether they will require advisors to comply with the requirements of the rule despite the memorandum.

  • Employers/benefits committees should reach out to their advisors/consultants and confirm whether they intend to proceed with implementing changes to comply with the rule.

  • Employers/benefits committees should continue to monitor developments in this area from a fiduciary risk perspective.

ARTICLE BY Kevin Selzer of Holland & Hart LLP
Copyright Holland & Hart LLP 1995-2017.

DOL Overtime Rule Appeal Faces Uncertainty

DOL Overtime Rule

Efforts to fast track the appeal of a nationwide preliminary injunction that prevents the U.S. Department of Labor (DOL) from implementing drastic proposed revisions to federal overtime regulations just got “Trumped.”

After obtaining an order in December 2016 to expedite the appeal while President Obama was still in office, attorneys for the federal government filed a short, unopposed motion on January 25, 2017, asking the U.S. Court of Appeals for the Fifth Circuit for a 30-day extension of time to file their reply brief, stating: “The requested extension is necessary to allow incoming leadership personnel adequate time to consider the issues. Plaintiffs’ counsel has authorized us to state that they consent to this extension motion.”

The preliminary injunction that is the focus of the appeal was issued on November 22, 2016, by a federal district court judge in Texas. The injunction halted the implementation of regulatory revisions that were scheduled to go into effect on December 1, 2016, and which would have more than doubled the minimum salary requirements for the major white collar overtime exemptions under the Fair Labor Standards Act (FLSA) from $455 per week to $913 per week.

The DOL already has filed its opening brief on appeal, and the plaintiffs in the case have filed their response. Amicus briefs in support of both sides also have been filed. Absent the requested extension, the DOL’s reply brief is due on January 31. If the extension is granted as requested, the DOL’s reply brief will be due on March 2. However, it also is possible that, after considering the issues, incoming leadership will abandon the appeal.

ARTICLE BY Steven F. Pockrass of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

© 2017, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

FLSA Overtime Rules Enjoined, NY Overtime Laws, National Origin Discrimination: Employment Law This Week [VIDEO]

employment lawDistrict Court Enjoins FLSA Overtime Rules

Our top story: A federal court in Texas has temporarily enjoined new exemption rules issued by the U.S. Department of Labor (DOL). The rules, which would have dramatically increased salary thresholds for overtime exemptions, were set to go into effect on December 1. The district court judge found that the 21 states that brought the suit established a prima facie case that the DOL overstepped its authority in establishing the new rules. Because the Fair Labor Standards Act makes no reference to salary thresholds, the court found that any new thresholds might have to be created by Congress and not the DOL. If the injunction is made permanent, it could be the beginning of a lengthy appeals process, which would leave employers in limbo.

New York State Overtime Laws Likely to Proceed

While overtime expansion is stalled at the federal level, New York State’s plan to increase salary thresholds remains on track. The comment period for the proposed increase closed on December 3. Under the rule, thresholds for exempt employees would rise to $825.00 per week for large employers in New York City and $787.50 per week for employers in Nassau, Suffolk, and Westchester Counties. If the New York State Department of Labor proceeds with the new rule, it will go into effect on December 31 of this year.

EEOC Issues Updated Guidelines on National Origin Discrimination

The Equal Employment Opportunity Commission (EEOC) released updated guidance on national origin discrimination. The new guidelines address legal developments on issues like human trafficking and harassment in the workplace. The guidance includes over 30 examples of national origin discrimination, as well as best practices to reduce the risk of violation. The guidance also states that, if an employee’s accent “materially interferes” with his or her ability to communicate in spoken English and effective spoken communication in English is a job requirement, an employer can legally move that worker.

USCIS Increases Stability for Foreign Workers

The U.S. Citizenship and Immigration Services (USCIS) has issued a final rule that makes it easier for employers to sponsor and retain skilled foreign workers. The rule gives added job flexibility and protection to foreign workers in H-1B status or who are stuck in a long green card application process. USCIS’s rule also expands the eligibility of certain employers for H-1B cap exemptions and adds grace periods, so certain skilled workers can remain in the country for limited periods while in between jobs.

Tip of the Week

Last week, as part of the 21st Century Cures Act, the U.S. House of Representatives passed new mental health reform legislation intended to step up enforcement of rules requiring that insurers cover mental health care at the same level as they cover physical health care. The legislation could impact employers’ health insurance plans. For this week’s Tip of the Week, James Gelfand, Senior Vice President of Health Policy for The ERISA Industry Committee (ERIC), has some advice on how employers should update their plans in 2017 in order to remain compliant:

BY George Carroll Whipple, III  of Epstein Becker & Green, P.C.

©2016 Epstein Becker & Green, P.C. All rights reserved.

Fast-Food Restaurant CEO Tapped to Head Labor Department: What to Expect

Andrew Puzder DOL Department of LaborPresident-elect Donald Trump has announced his intention to nominate Andrew Puzder, Chief Executive Officer of CKE Holdings, the parent company of Carl’s Jr. and Hardee’s, to head the U.S. Department of Labor.

Puzder was a lawyer in St. Louis and represented the founder of Carl’s Jr. He later became the general counsel for CKE and then its CEO. He has criticized state and local minimum wage increases, the Affordable Care Act (ACA), and government overregulation, among other things.

If Puzder is confirmed as Secretary of Labor, employers should look for the following changes.

Wage and Hour

  • Puzder is no fan of the DOL’s regulation expanding overtime protection.

  • Employers are holding their breath as the U.S. Court of Appeals for the Fifth Circuit considers an appeal by the DOL of a nationwide preliminary injunction issued by a Texas district court judge enjoining the DOL from implementing its highly publicized regulation expanding overtime coverage. Puzder’s nomination as Secretary of Labor could affect the regulation’s fate. In May 2016, the DOL issued a Final Rule more than doubling the required salary level required to satisfy the exemptions from overtime for “white collar” employees from $23,660 to $47,476. The Rule was set to become effective December 1, 2016. On November 22, 2016, however, days before the effective date, a Texas district court judge issued a nationwide preliminary injunction, blocking the regulation. The DOL filed an appeal, asking for expedited briefing, and the Fifth Circuit granted that request, requiring all briefing to be completed by January 31, 2017, just days after inauguration, with oral argument to be scheduled quickly after briefing is completed.

  • Whether the DOL under a Trump Administration would support the overtime Rule is unclear. However, Puzder has been an open critic of the overtime regulation. Writing in Forbes Magazine in May 2016, after the DOL published the final regulation, Puzder stated the regulation would not help workers, and “will simply add to the extensive regulatory maze the Obama Administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere.” In practice, he said, “this means reduced opportunities, bonuses, benefits, perks and promotions.”

  • Fearing the DOL under Trump might abandon the appeal, and citing Puzder’s writings on the overtime rule specifically, the Texas AFL-CIO has filed a motion with the district court to intervene as a defendant and defend the Rule even if the DOL back out. Puzder’s criticisms of the regulation, and a Republican-controlled Congress, could mean one of Secretary of Labor Thomas Perez’s signature regulations, for which the DOL worked for over two years developing, may be at an end. The new Congress could simply pass legislation that would invalidate the rule and present it to Trump, regardless of the outcome of the Fifth Circuit appeal.

  • Puzder also has been a critic of large increases to the minimum wage.

Employee Benefits

  • Puzder has criticized the ACA repeatedly as another government mandate that has caused labor cost increases and led to job cuts. The DOL, along with the Department of Health and Human Services (HHS) and Internal Revenue Service (IRS), is responsible for the majority of the regulations issued under the ACA. With Puzder heading the DOL, Trump will have an ally and partner in dismantling the ACA.

  • Puzder’s anti-regulation perspective likely will mean strong opposition to the DOL’s fiduciary rule, which expands the scope of who acts as a fiduciary and has significantly affected the financial services industry. Currently slated to go into effect in April 2017, the fiduciary rule will be at the top of the Secretary’s list of priorities.

  • Generally, Puzder’s favoring of market forces, as opposed to government regulation or mandated benefits, signals a penchant toward steering the DOL in ways that favor competition between employers for talent based on compensation and benefit packages. Appointments of the assistant Secretary of Labor of the Employee Benefits Security Administration (EBSA) and members of the ERISA Advisory Council also are eagerly anticipated as they are key in the direction of rulemaking and enforcement of ERISA and other employee benefit initiatives.

Federal Contracts (Office of Federal Contract Compliance Programs)

  • A new, more business-friendly Director of Office of Federal Contract Compliance Programs (OFCCP) likely will be focused on the regulatory burdens on mid-size and small businesses. This should shape an agenda of deregulation that may roll back regulations, including those governing paid sick leave, minimum wage, pay transparency, sex discrimination, and lesbian, gay, bisexual, and transgender (LGBT) discrimination.

  • A shift in how OFCCP approaches its auditing function also may come from a new leader. For example, a move away from the OFCCP’s current Active Case Enforcement system to one closer to that used by the George W. Bush administration (Active Case Management) would bring more efficient, high-level compliance reviews in most instances, with deeper dives reserved for the few audits with major indicators of potential discrimination.

  • There also may be a change in OFCCP enforcement priorities. OFCCP likely will not look to push boundaries, create new law through litigation, or publicly shame employers. We can expect a shift in the OFCCP’s push to address the gender pay gap and it may step back from comparable worth theories of pay discrimination. Finally, such programs as the Class Member Locator, the online registry of employers that OFCCP had cited for a discrimination violation, likely will disappear.

Immigration

  • As the CEO of CKE, Puzder brings a unique perspective on the role of foreign-born workers in U.S. businesses. Puzder has stated frequently that immigrants play a vital role in growing U.S. businesses, spurring innovation and creating jobs. Puzder will be an important and potentially moderating voice related to immigrant and nonimmigrant work visas.

Labor

  • The nomination of Puzder and the recent deal to keep an Indiana facility from closing to retain more U.S. jobs signal both Trump’s and nominee Puzder’s focus on ensuring that labor relations fits within a broader economic picture.

  • Puzder believes, as does Trump, that free enterprise will result in job growth. It is likely that the new Secretary of Labor will seek to remove burdensome regulations and be more business-friendly. For example, we anticipate changes to the DOL’s efforts to expand the definition of joint employer status, which the National Labor Relations Board (NLRB) also has expanded under the Obama Administration. Consistent with this approach, Trump (immediately after his inauguration) may repeal many of President Barack Obama’s executive orders, including (among others) Executive Order 13658 (Establishing a Minimum Wage for Contractors), Executive Order 13673 (Fair Pay and Safe Workplaces), and Executive Order 13502 (Use of Project Labor Agreements for Federal Construction Projects).

Workplace Safety and Health

  • Puzder currently heads a company that is not heavily regulated by the Occupational Safety and Health Administration (OSHA). He has stated, however, that new regulation may not be the best way to effect policy change and that view could trickle down to OSHA and the Mine Safety and Health Administration.

Non-Competes and Protection Against Unfair Competition

  • Puzder would be unlikely to latch onto the assault against non-compete agreements advanced by the Treasury Department in its March report and by the White House in its May report and October “state call to action.” Given his business background, Puzder would understand the utility of non-compete agreements, even with respect to low-wage earners, because they serve to protect the employer’s investment in training such workers.

Disability, Leave and Health Management

  • Puzder may be more willing to reduce or eliminate the burdens associated with the paid sick leave executive order that is scheduled to go into effect for new contracts after January 1, 2017. The Executive Order currently makes it very difficult for businesses to identify when paid sick leave accrues (pushing many employers to provide more than required), makes it difficult to coordinate with state and local paid sick leave laws, and makes it easier for employees to abuse the system and use the benefit to thwart any attendance policy. Businesses that operate in multiple states likely would welcome some form of federal measure that simplifies paid sick leave benefit administration, aligns federal, state, and local benefits, and provides an ERISA-type preemption.

  • Under Puzder, the DOL likely will be more business-minded with respect to issues under the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). This would result in the administration taking less aggressive stances (including in terms of litigation) on these laws and fewer attempts to expand the coverage of these statutes.

ARTICLE BY General Employment Litigation Practice Group Jackson Lewis

Jackson Lewis P.C. © 2016

Adjusting Wage Rates? Be Mindful of State Notice Requirements

wage ratesEven employers who were opposed to the new overtime regulations are in a quandary after the District Court for the Eastern District of Texas enjoined the Department of Labor from implementing new salary thresholds for the FLSA’s “white collar” exemptions.

Will the injunction become permanent?  Will it be upheld by the Fifth Circuit?

Will the Department of Labor continue to defend the case when the Trump Administration is in place?

What does the rationale behind the District Court’s injunction (that the language of the FLSA suggests exempt status should be determined based only on an employee’s duties) mean for the $455-per-week salary threshold in the “old” regulations?

Whether employers can reverse salary increases that already have been implemented or announced is an issue that should be approached carefully.

For example, employers should be aware that state law may specify the amount of notice that an employer must provide to an employee before changing his or her pay.

In most states, employers merely need to give employees notice of a change in pay before the beginning of the pay period in which the new wage rate comes into effect.

But some states require impose additional requirements. The New York Department of Labor, for example, explains that if the information in an employee’s wage statement changes, “the employer must tell employees at least a week before it happens unless they issue a new paystub that carries the notice. The employer must notify an employee in writing before they reduce the employee’s wage rate. Employers in the hospitality industry must give notice every time a wage rate changes.”

Maryland (and Iowa) requires notice at least one pay period in advance.  Alaska, Maine, Missouri, North Carolina, Nevada and South Carolina have their own notice requirements.

Employers who are making changes to wage rates based on the status of the DOL’s regulations should be nimble – while also making sure that they are providing the notice required under state law.

ARTICLE BY Michael D. Thompson of Epstein Becker & Green, P.C.

©2016 Epstein Becker & Green, P.C. All rights reserved.