01/17/18

Trump Department of Labor Continues Their Anti-Worker Agenda

As expected, the Department of Labor (“DOL”) under the direction of trump appointee Alexander Acosta has continued to remake the DOL into a Department of Employee Protection.

The latest attack on workers has been to re-institute “Opinion Letters” which were written and implemented in the waning days of the Bush Administration in January, 2009 and were rescinded in March, 2009 by the Obama DOL. Opinion Letters are essentially the agency giving an “opinion” about a how a particular regulation applies to a specific factual scenario. Usually it is an employer writing to the DOL asking how a regulation will apply to a situation at their workplace. The agency then gives its Opinion in a letter posted on the DOL website. The letters aren’t legally binding. Courts can and will disagree with the Agency’s interpretation if the issue addressed in the Opinion Letter, or one very similar is litigated in court.

In addition, the trump DOL has said it will begin to issue new Opinion Letters in the future, a practice which was stopped under the Obama administration.

These actions are important for two main reasons. One, the Bush administration letters are because of the political nature of the agencies, more management friendly than the broader “Administrative Interpretations” disseminated by the Obama DOL. The second and more important impact re-instituting these Bush era Opinion Letters and the new policy of giving Opinion Letters in the future is the way Opinion Letters can be used by employers to evade liability for violating the Fair Labor Standards Act (“FLSA”) or limiting the amount of liability the employer may have if found to have violated the FLSA.

The Port to Portal Act, an amendment to the FLSA from 1947 gives employers “safe harbors” to violations of the FLSA. 29 U.S.C. § 259(a), provides a complete bar to an FLSA minimum wage or overtime claim if the employer “pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation, of the [DOL], or any [relevant] administrative practice or enforcement policy of such agency.” In addition, the employer may be able to avoid liability for violating the FLSA even if the administrative regulation, order, ruling, approval, or interpretation was later determined by a court to be invalid. So following a pro-employer Opinion Letter may allow an employer to avoid liability even if the DOL’s opinion is found to be wrong as long as the employer is found to have a “good faith” reason to believe conforming with the Opinion Letter made the employer’s practice compliant with the requirements of the FLSA.

However, the bar for “good faith conformity” is probably rather high. Because the Opinion Letters address very specific factual scenarios an employer would have to show they had a good reason to believe the scenario at their workplace was the same or very similar to the one addressed by the Opinion Letter at issue.

There is another way employers can use Opinion Letters to reduce their liability for violations of the FLSA even if they can’t escape liability entirely.

The FLSA has a “standard” statute of limitations of two (2) years. But an employer can be held liable for three (3) years of violations if a court believes the violation was “willful”. The FLSA also allows for a court to enforce a penalty for violating the FLSA of double the amount owed for the violation. This is called “liquidated damages”. Like the three year statute of limitations, liquidated damages are only assessed when a court finds the employer’s violation was “willful”.

The new Opinion Letters, and the issuing of more Opinion Letters in the future, will give employers a tool to help prove their violations were no willful and thus only subject to the regular two year statute of limitations and not liable for the liquidated damages penalty. An employer may only need to show an Opinion Letter could be reasonably interpreted to apply to the scenario at issue in their workplace, not even that it is essentially exactly the same, to convince a court the employer was acting in good faith and that it had reasonable grounds for believing that the act or omission was not a violation of the FLSA.

So other than tipping the scales to the side of the employer and making it easier for employers to get away with not following the FLSA, how does this change in DOL policy impact workers? The main takeaway for workers is that now it is more important than ever to speak to an attorney immediately if one believes their employer has not properly followed the FLSA by not paying overtime or the required minimum wage. It might become much harder to get a court to agree the proper statute of limitations for a violation is three years instead of two years so workers can’t afford to wait. Otherwise they risk being unable to hold their employer to account for stealing the wages they are legally owed because more violations may fall outside of the statute of limitations.

If you are in Atlanta or greater Georgia and you believe your employer is not paying you your proper overtime or minimum wage, please contact attorney Benjamin Kandy at The Law Office of Benjamin B. Kandy via phone, email, or the Contact button on the side of this page.

05/17/16

The Department of Labor Announces the Final Overtime Salary Threshold Rule

On Wednesday, March 17, 2016 the Department of Labor announced the new overtime exemption salary threshold.  For an employee to be exempt from the general overtime requirements the Fair Labor Standards Act requires the employee meet one of a number of different duties test by performing certain work duties and in most cases be paid a salary at or above a certain threshold. Currently the threshold is $455 a week which is $23,660 a year. The new salary threshold will be $913 a week, or $47,476 a year. In addition, the new rule also creates an automatic mechanism to update the salary threshold every three years, beginning January 1, 2020. Each update will raise the standard threshold to the 40th percentile of full-time salaried workers in the lowest-wage Census region, estimated to be $51,168 in 2020.

The rule will go into effect December 1, 2016.

I am very pleased with the new rule. Even though the Obama administration was shooting for around $50,400 and with inflation the new threshold would have to be around $51,000 to match the overtime salary threshold at its highest point in the 1970s, the final number is a huge gain.

The Department of Labor calculates 4.2 million workers will become newly eligible for overtime. The Economic Policy Institute put the number of newly eligible workers and workers who will be assisted by the new rule closer to 13 million.

The automatic update to the threshold is almost as important as the update to the amount itself. Before this change, the salary threshold had been last updated in 2004 and before that in the mid 1970s. The new rule will ensure the salary threshold doesn’t diminish via inattention and inflation.

Republicans and industry groups will attack the new rule with everything they have. The New York Times seems to think Republicans may have to reconsider their normal opposition to anything that might help working people.

“With Donald J. Trump as their presumptive presidential nominee, however, the issue is fraught with risk for Republicans. Any attempt to repeal the regulation could exacerbate an already palpable split between Mr. Trump’s blue-collar supporters and the party’s establishment donors and politicians.”

This different political dynamic might mean the rule can be implemented on schedule without serious legislative or judicial delays.

Please see the DOL’s fact sheet here.