The Employer's Legal Resource: This could be the DOL's biggest month yet. Let's recap June's developments.
Early in June, the Department of Labor (DOL) announced it would be withdrawing its 2015 guidance on independent contractors and its 2016 guidance on joint employment. We covered the joint employment guidance in our February 2016 ELR and the independent contractor guidance in the August 2015 ELR. This guidance issued by the DOL was in the form of an Administrator's Interpretation, clearly calculated to cover more people as employees under the Fair Labor Standards Act (FLSA).
An Administrator's Interpretation was a memorandum issued by the DOL on a topic of interest designed to provide guidance to employers and employees. It did not undergo the rigors of "administrative rulemaking," such as public comment so did not have the authority of a regulation or law. It merely reflected the agency's informal guidance. The DOL began issuing Administrator's Interpretations in 2010, issuing seven since their inception (two of which have now been withdrawn). You can read the others here.
Prior to launching Administrator's Interpretations in 2010, the DOL issued Opinion Letters. A person or entity could write a fact-specific letter to the DOL and request it answer specific questions applying the law to the facts presented. The DOL would issue multiple Opinion Letters each year. Additionally, an employer who received an Opinion Letter and who acted in reliance and in conformity with that Opinion Letter could assert it as a good faith defense to a lawsuit brought under the FLSA.
Tying it all in, on June 27, the DOL announced it was going back to the pre-2010 (pre-Obama) practice of issuing Opinion Letters. So, Opinion Letters are back in and Administrator's Interpretations are out.
Not to leave anything on the table, late this month the DOL also started making noise again on the overtime rules. As you know, for years we have been watching this issue. Employers were working all last year to ensure their employees classified as white collar exempt met the new salary thresholds that were put into place by the Obama-administration DOL. Then, on the eve of their effective date, a federal court in Texas stayed the DOL regulation. You can read about that here. The matter has remained on hold in the courts, and people have been wondering what would happen since the presidential election.
On June 27, the DOL sent a request for information to the Office of Management and Budget on the overtime rule. This indicates the agency is ready to reconsider the rule. As you may recall, the current salary threshold is $23,660 annually. Under the rule which was stayed by the Texas federal court, it had been increased to $47,476 annually, with a built in escalator. Speculation is the DOL will increase the threshold, but to a figure closer to the $30,000 mark. Of course, this is only speculation.
On Friday, June 30, in the Texas court case (now before the Fifth Circuit Court of Appeals), the government advised the Court that the DOL wanted two things. It wanted the Court of Appeals to clarify that the DOL had the legal right to establish a salary threshold, and it wanted to scrap the earlier dollar thresholds and start over. What does this mean for employers? It likely means that nothing is going to be settled any time soon.
By Kristen L. Brightmire, KBrightmire@dsda.com