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By Ben Penn
May 19 — When David Weil became administrator of the Labor Department's Wage and Hour Division in 2014, he assumed the vital role of overseeing a top item on the administration's middle-class agenda: a rule to dramatically expand overtime eligibility.
One day after the WHD published the final rule (96 DLR AA-1, 5/18/16), Weil told Bloomberg BNA in an exclusive interview May 19 that his work on the regulation's major changes to overtime law is far from complete.
Weil, a former economics professor, emphasized that in his eight final months as administrator, his immediate focus is on bringing about compliance.
“I’m raring to go on what I’m sure will be a robust public discussion about the rule,” he said. “Now that the rule is final, we can fully engage in that, and I think dispel a lot of misunderstandings that are out there and really get people on the road to compliance, which is the bottom line of all this.”
The regulation (RIN:1235-AA11), which doubles the annual salary threshold for overtime exemption to $47,476 from $23,660, takes effect Dec. 1. Therefore, in the final weeks before Weil's time is up at the WHD, he'll be responsible for rolling out enforcement to ensure that the 4.2 million workers the DOL estimates will become newly eligible are receiving time-and-a-half pay when working more than 40 hours a week.
Asked to detail how his agency will transition to the enforcement phase, the administrator said he'll rely largely on the approach already established by this administration.
“We’ll certainly be looking at the same kinds of industries we have thought about more generally, and that will be impacted around this rule,” Weil said. They include “leisure, hospitality, retail, education and health services”—those that “have a lot of workers who will be affected by the rule.”
“So we will augment the kind of enforcement strategies we have already in place and think about how do we also raise compliance with the new requirements of the rule in the longer term” for “our priority industries—given the vulnerability of those workers and the fact that we know there are a lot of problems in them,” he said.
The WHD's some 1,000 field investigators are already trained on an enforcement strategy designed to make the most of limited resources. That involves emphasizing agency-initiated investigations over complaint-driven cases; responding to complaints by prioritizing them based on substance and potential impact; and targeting investigations to benefit employees who don't feel they have a voice in the workplace.
Still, the agency's immediate tasks involve compliance assistance, he said. Then, “in the longer term, we will think about this rule as we have come to think about our general enforcement strategy overall,” Weil added.
In another example of how he feels the rule won't necessitate an enforcement overhaul, Weil said WHD investigators will undergo “a pretty straightforward training process.”
“There’s nothing very new about it. Our investigators every day are dealing with the issue of exemption status,” he said. “It’s just a matter of helping them understand” which workers will receive new overtime protections because of the higher salary threshold.
The Dec. 1 effective date—in between the presidential election and the start of a new administration—means that the true enforcement responsibility will be in the hands of Weil's successor.
But Weil declined to outline how the next president could affect his plans related to new overtime exemption rules. “I think it would be really premature to be thinking about the election at this point in terms of how we build those strategies,” Weil said.
More generally, Weil said he is “laser-focused” on ensuring that a structure is in place for the WHD enforcement tactics to become lasting.
“There’s a lot about how we target, how we use data, how we think about focusing at the top of industries that is really becoming an intrinsic part of how we do our work,” he said. “I think about it in those terms rather than be a CNN prognosticator about what’s going to happen in November. I don’t think they’re very good at it and I’m certainly not good at it.”
That said, Democratic presidential front-runner Hillary Clinton issued a statement May 18 applauding the department for the overtime rule. A Clinton administration would be far more likely to carry out the current enforcement approach than presumed Republican nominee Donald Trump, who hasn't publicly commented on the regulation.
Republican lawmakers are planning to pursue several types of legislative challenges intended to block the overtime rule from taking effect (96 DLR A-12, 5/18/16). Further, Paul DeCamp, a WHD administrator under President George W. Bush, told Bloomberg BNA May 18 that the regulation will definitely be challenged in court (96 DLR AA-1, 5/18/16).
Weil said the WHD designs its enforcement tactics to have the greatest impact as possible under a limited budget. But the shortage in investigators might be more acute once millions of new workers are eligible for time and a half pay.
Private attorneys told Bloomberg BNA recently that they're expecting some employers to botch their compliance with the rule, leaving some workers without the extra compensation they're due (92 DLR C-2, 5/12/16).
Weil said he's “delighted” that President Barack Obama's budget request for fiscal year 2017 would fund 300 new WHD investigators. “We need those resources,” he said, adding that the need is “further heightened” by the responsibility to see that employers comply with the rule.
The president has made similar requests for increased WHD funding in recent years, but the Republican-controlled Congress didn't approve the increase.
With a staffed-up WHD investigative team in doubt for FY 2017, some observers expect plaintiffs' attorneys to play an instrumental rule in ensuring that employees receive the overtime pay they're freshly entitled to. It's also anticipated that during the rule's outreach stage, many employees will feel they're already misclassified as exempt and contact attorneys.
Asked about private attorneys' involvement, Weil said, “We don't have any control or coordination with the private bar on this.”
However, he predicts the rule will decrease litigation because the higher bright-line salary threshold will improve clarity by reducing the need to apply the more ambiguous duties test. “I see that as an almost immediate effect,” the administrator said.
But before clarity on the regulation is achieved, Weil wants to spend the next few months dispelling myths about the effects of the new overtime exemption threshold.
One of the major misconceptions “is that people think that there's essentially one response to the new rule”—to give all currently exempt employees, earning below the new threshold, a raise above $47,476, he said. In reality, “there’s a whole range of options available to employers about how to respond, and in some cases that does include bumping folks up to above the new level.”
Weil said he also wants to address some of the misunderstandings about how the rule will apply to nonprofits, higher education and small business. In addition to the rule, the DOL published guidance that provides options for nonprofits, higher education institutions and the public sector.
Despite the immense work ahead of him, Weil took a moment to describe his satisfaction at completing a substantial regulation ahead of schedule.
“There is a great sense of elation generally in this building because this rule is a huge thing for working people, it is a major accomplishment,” he said from the department's Washington headquarters.
“We also know that there is tomorrow, and tomorrow is all about getting employers ready to know their responsibilities of what they need to do to adjust, and getting the word out to workers about what their rights are under the regulation and changes in coverage that might affect them.”
To contact the reporter on this story: Ben Penn in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Susan J. McGolrick at email@example.com
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