Senators Grill Wage-Hour Nominee on Obama Overtime Rule

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Ben Penn

Senators had a short window to press Cheryl Stanton, the nominee to run DOL’s Wage and Hour Division, on how she’d address the Obama administration’s rule to expand overtime access to millions of workers. But her Oct. 4 hearing before the Health, Labor and Pensions Committee concluded without many clear answers.

Stanton, the White House choice for WHD administrator, suggested that issuing a new overtime rule may be a more effective approach than continuing to defend the previous administration’s rule in court. If confirmed, she said she’d want to ask administration lawyers “whether we want to look at promulgating a different rule that would be more likely to withstand litigation and would then go into effect faster.”

The Trump Justice Department has until the end of October to decide whether to appeal a federal judge’s permanent injunction of the Obama rule. That regulation would have lifted the annual salary threshold below which workers qualify for overtime pay to $47,476 from $23,660. Stanton didn’t directly respond to the question of whether she would appeal this decision, saying she’d need to seek legal counsel on her options, if confirmed.

The WHD recently concluded a public comment period on how to rewrite the rule with a more moderate salary level. When asked by Sen. Lamar Alexander (R-Tenn.), chairman of the HELP committee, whether she’d support a salary threshold that varies by region, Stanton said she would need to consult with agency lawyers to find out if variance is permissible.

Stanton as WHD chief would be responsible for regulating and enforcing the Fair Labor Standards Act’s minimum wage, overtime, and family leave requirements, as well as prevailing wage laws for construction employees on federal contracts.

Her background in government service—as director of the South Carolina Department of Employment and Workforce and as a White House attorney—doesn’t offer much insight into how she would approach the job.

“We need a Wage and Hour Division Administrator who will fight for workers,” Sen. Patty Murray (D-Wash.), the top Democrat on the committee, told Stanton at the hearing. “So I look forward to hearing from you on how you will stand up to President Trump and his administration to combat wage theft and defend the overtime rule.”

Labor Secretary Alexander Acosta during his own confirmation hearing in March signaled that a salary level around $32,000 might strike the right balance.

Alexander said he hoped Stanton would work with Acosta and Congress on “a more moderate approach” on the rule.

Stanton split time at the hearing with two other nominees, Peter Robb for National Labor Relations Board general counsel, and David Zatezalo for DOL assistant secretary for mine safety and health. Between the merged testimony and a mid-hearing recess for a Senate vote, Stanton was only asked a few questions.

“If confirmed, I look forward to leveraging the tools that the Wage and Hour Division has to allow families to provide for themselves,” Stanton said in her opening statement.

The GOP-majority HELP Committee is likely to advance all three candidates for a final vote on the Senate floor. Stanton can be approved without a single Democratic vote in her favor if she gets the full support of the panel’s Republicans.

Acosta Arrival Jump-Started New WHD

Acosta’s arrival as labor secretary in late April precipitated several noteworthy policy shifts at WHD, even without a new wage and hour chief.

First, he ordered the withdrawal of two administrator’s interpretations by the last WHD head, David Weil. The letters sought to cement a broad definition of joint employment and clarify independent contractor misclassificaiton under the FLSA.

Acosta also announced the return of wage-and-hour opinion letters in response to stakeholders’ specific questions on legal matters. Management attorneys favor this method of compliance assistance, which was ended early in the Obama administration.

The WHD has welcomed employers and workers to submit requests for letters. Absent a confirmed administrator, however, the division hasn’t published an opinion letter in response to at least a few dozen requests thus far.

Many of the Senate committee’s 23 members were absent from the hearing. Stanton was never asked to address topics such as which industries to target for investigations, how to balance compliance assistance with enforcement, and whether she would settle cases by pursuing double damages on top of back wages owed.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editor responsible for this story: Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Labor & Employment on Bloomberg Law