Trump Can’t Easily Erase OT Rule, Wage and Hour Chief Says

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By Ben Penn

Nov. 17 — Employers should be ready for the overtime rule to take effect Dec. 1, regardless of what may happen under President-elect Donald Trump, Wage and Hour Division Administrator David Weil told Bloomberg BNA.

“Professors don’t cancel exams,” Weil said Nov. 16, when asked whether companies may consider waiting to see the next administration’s plans before they start to comply with new time-and-a-half pay requirements. “Let’s get on with this and move forward, and treat workers the way they should be treated.”

It’s not clear how Trump’s Labor Department will handle the new rule, which expands overtime eligibility to those earning up to $47,476 per year. Attorneys have speculated that the WHD or Congress will lower the salary threshold next year and that the agency will take a more lenient approach to enforcement.

Weil said employers should not hold out hope for the regulation to be quickly repealed.

“There is no stroke-of-the pen ability of any president to simply erase a rule. If they wish to change the rule, they’re going to have to go through rulemaking, and part of the rulemaking is to justify what has changed since the last rulemaking to require a fundamental shift in the rule and our application of the statute,” Weil said. “It’s hard for me to believe that much has changed since May of 2016” when the WHD issued the final rule.

The outgoing agency director, who spoke as a federal judge decides whether to freeze the rule before Dec. 1, said the WHD will continue to provide compliance aid even as enforcement begins. “It’s not like the gate slams shut at that moment and then we go into only enforcement mode,” Weil said.

Early Enforcement Strategy

The rule takes effect seven weeks before Weil departs.

Weil declined to disclose exactly how investigators will initially enforce the rule change.

“It’s not just strategic enforcement,” he said. “We’ll look at the industries we know that are going to be more affected, and we will prioritize our outreach to them as well.”

In two weeks, investigators will be able to start applying the new overtime exemption test to workplace audits, either responding to worker complaints or in targeted investigations. The WHD under Weil’s watch has been focused on using data to determine which cases are likely to yield FLSA violations, all aimed at maximizing worker protections with the limited enforcement resources available.

Weil pointed out that investigations after Dec. 1 will assess back wages owed over a two-year lookback period. Any newly overtime-eligible employee whose employer is breaking the law can't recover much in lost wages in the first few weeks of the regulation’s implementation.

The administrator said he was making the point not to suggest his investigators won’t be enforcing the new rule, but rather to refute “the notion that something happens on day one that changes the world.”

Advice for Trump’s Transition

Once the Trump administration DOL review team arrives to look at ongoing initiatives and set its own agenda, Weil may have a chance to make a plea for agency continuity on implementing the overtime rule.

The administrator said he would explain to the transition staff why the WHD feels the rule change “is a step forward and brings the Fair Labor Standards Act back up to date to where it should be, and that our agency is well-prepared to move forward.”

Further, Weil said he’d make the point to the new administration that “if you look at the polls that have been done on the overtime rule, the public supports this.”

A Morning Consult poll taken shortly after the regulation was published showed six in 10 voters support doubling the overtime threshold to $47,476. Nearly four in 10 respondents thought the minimum level for exemption from time-and-a-half pay should be even higher.

Still, the president-elect said once on the campaign trail that he might consider exempting small businesses from the rule’s requirements. The Trump campaign’s senior economic adviser, David Malpass, told Bloomberg BNA in October that the regulation prevents businesses from hiring.

There’s also a possibility that a motion for a preliminary injunction could be granted in the coming days. Minutes after Weil’s interview with Bloomberg BNA, a judge adjourned a hearing in Texas by telling a group of 21 states challenging the rule that he hopes to decide on Nov. 22 whether to enjoin the regulation.

Businesses Are Ready

Business lobbyists and GOP critics of the rule are weighing several options for softening it in the next administration.

But based on the department’s extensive outreach and assistance over the past six months, Weil said he sees plenty of evidence that employers are already prepared.

He said the agency has conducted 270 field sessions to educate employers about coming into compliance, held webinars with 22,000 registrants and posted guidance documents online that have been downloaded 2.8 million times.

The sectors that raised concerns when the rule first came out, such as higher education, nonprofits and retailers, “are doing exactly what they should be doing, which is either getting ready for compliance or in some cases they already are in compliance,” Weil said. He cited conversations he’s had with those employers or that were relayed to him by others, and news reports to draw this conclusion.

For instance, the higher education community was vocal in its opposition to the rule, but Weil said he’s now heard that many colleges and universities already have their compliance plans in place. “And in some cases, they have already made the adjustments for the fall semester,” the administrator said.

Yet some trade associations, such as the National Retail Federation, claim that a substantial share of employers, particularly smaller businesses, aren’t even aware of the rule weeks before it takes effect.

Those assertions “quite frankly, are not real credible to me,” Weil said. President Barack Obama first directed the division to update the overtime rules in March 2014, leading to a 2015 proposed rule that received 270,000 public comments, Weil noted.

The DOL and other organizations then conducted a tremendous amount of outreach, and the rulemaking process has received plenty of publicity, Weil said. “I think if people haven’t prepared it’s because they’re maybe in a state of denial, but it’s not from lack of knowledge or resources to prepare for the rule,” he said.

To contact the reporter responsible for this story: Ben Penn at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

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