Trump’s Wage and Hour Division Likely to Reverse Course

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By Ben Penn

Nov. 10 — The Republican takeover of the Labor Department’s wage enforcement arm is expected to bring a more conciliatory, less punitive philosophy.

“I don’t think that the new administration is likely to continue with anything” that Wage and Hour Division Administrator David Weil “has regarded as a priority,” Paul DeCamp, WHD chief under President George W. Bush, told Bloomberg BNA Nov. 9. “I think that we’re going to see a 180 in the Wage and Hour Division.” DeCamp is now a principal with management firm Jackson Lewis P.C. in Washington.

Weil since his 2014 confirmation has overseen data-driven investigations in industries in which minimum wage and overtime violations are deemed likely. He’s also tasked investigators with rooting out independent contractor misclassification and interpreted the Fair Labor Standards Act to call for a broad definition of joint employment.

Trump’s labor transition team has already been discussing an agenda and meeting with stakeholders. The exact approach will hinge in part on who gets tapped for labor secretary and WHD administrator. Some observers predict there’s a solid chance he’d return to the establishment Republican DOL that’s more prone to leniency and clarifying company-specific scenarios instead of stringent enforcement and penalties.

“I’d like to see a return to opinion letters,” Alexander Passantino, another former WHD administrator under George W. Bush, told Bloomberg BNA. “I would not be surprised to see action taken to rescind or revise the administrator interpretations.” Passantino is now a partner at Seyfarth Shaw in Washington.

The division in 2010 ended the practice of issuing opinion letters that responded to employer questions about particular topics and circumstances. The agency instead began issuing broader administrator’s interpretations on such hot topics as joint employment and independent contractor misclassification that some employers have regarded as an attempt to sidestep notice-and-comment rulemaking.

Weil’s tactics have been widely hailed throughout the organized labor and worker advocacy movements. They’ve applauded his ability to use limited resources to protect as many workers as possible from employer abuse. Some stakeholders told Bloomberg BNA several weeks ago that they were hoping Hillary Clinton would ask him to stay on at WHD had she won the election.

No More Gotcha

The outgoing WHD administration has been attempting to refute accusations it’s “playing gotcha” with the controversial overtime regulation. In the months since the rule was finalized in May and before 4.2 million more workers are expected to become eligible for time-and-a-half pay Dec. 1, the agency has been touring the country providing outreach to employers and hosting webinars.

But the transition to a Republican president appointing the division’s leader could mean a new enforcement strategy for the rule. “Obviously a Department of Labor could take a much more conciliatory approach in making sure that individuals understand what” the overtime “requirements are, in providing more education, more outreach and not trying to be punitive,” Michael Lotito, a management attorney and co-chairman of Littler Mendelson’s Workplace Policy Institute, told Bloomberg BNA Nov. 9.

The names being considered for DOL leadership thus far offer promise to Angelo Amador, senior vice president and regulatory counsel at the National Restaurant Association. Amador, who’s criticized Obama’s WHD for its employer engagement, said he would’ve welcomed a fresh start at the DOL under Clinton.

“But now given the pull with people already being heard as potential names for working at the Department of Labor under a Trump administration, we think that we might even get a more sympathetic ear than we were expecting a couple of weeks ago,” Amador said.

If the last Republican administration is any indication, Trump could turn to a WHD administrator more sympathetic to running a business. In addition to DeCamp of Jackson Lewis and Passantino at Seyfarth Shaw, the other two WHD chiefs under Bush also now represent employers for large firms—Tammy McCutchen at Littler Mendelson and Alfred Robinson at Ogletree Deakins.

Clarification Before Crackdown

Trade associations and management attorneys, some of whom have begun communicating with the Trump transition staff, are pressing for a WHD that is more understanding that businesses sometimes run afoul of the FLSA for legitimate reasons. They’re looking for clarification first, enforcement second.

For instance, the issue of when employees could become eligible for compensable time when working outside of the 9-5 office framework has caused employer frustration, particularly in light of the new overtime rule.

“We need a Wage and Hour director who is willing to work with the idea that nonexempt employees want flexibility, they want to be able to work away from the workplace when their job allows them to, but not be heavily overburdened with the time-tracking,” Daniel Yager, president and chief executive officer of the HR Policy Association, told Bloomberg BNA Nov. 10. “That is a major problem.”

How Trump’s WHD would enforce the overtime rule remains to be seen. But by doubling the annual salary threshold for overtime exemption to $47,476, the new regulation removes the need in many cases for investigators to apply the more ambiguous duties test when they determine who is exempt.

“It’s such a simple question—are you at the threshold or are you not,” Christopher Wilkinson, who was an associate solicitor at the DOL through 2015, told Bloomberg BNA Nov. 9. “They can’t go out and investigate somebody, find that they’re not paying people above the threshold and not paying them overtime and then drop the case.”

When investigators find newly eligible workers are denied overtime, “I don’t think there’s any discretion from an enforcement standpoint,” said Wilkinson, now a partner representing employers at Orrick Herrington & Sutcliffe in Washington.

To contact the reporter on this story: Ben Penn in Washington 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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