On Thursday, July 18, the Senate confirmed President Obama's nomination of Thomas Perez as the new Secretary of the Department of Labor (DOL). Perez is a career bureaucrat who most recently was the head of the Department of Justice's Civil Rights Division. Perez also has prior experience in the labor arena as Secretary of Maryland's Department of Labor Licensing and Regulation.
Perez's confirmation comes immediately after the Senate leadership reached a bipartisan compromise to avoid the "nuclear option" threatened by Sen. Harry Reid’s announced intent to eliminate the Senate’s filibuster rule. The bipartisan compromise also will result in full Senate consideration of President Obama's nominees for the National Labor Relations Board and also resulted in the confirmation of Richard Cordray as head of the Consumer Financial Protection Bureau.
Employers can expect an increasing wave of DOL regulation soon after Perez officially takes the helm. Although concerns about unemployment may temper DOL regulatory efforts, Perez is believed to be "tough on enforcement" and penalties. As a result, look for increased DOL activity in the wage and hour, child labor, pension review, and affirmative action areas. It is likely that pending and recently proposed regulations will move forward, including the "persuader" rule, workplace health and safety initiatives, OFCCP rules requiring federal contractors to achieve disability hiring goals, and possibly worker notification regulations that would require employers to explain to employees how they are classified (exempt v. non-exempt) and paid.
All of this suggests that prudent employers should review their compliance posture to ensure that they are following existing requirements.
Specifically, now is a good time to be certain that you are not classifying employees as independent contractors, are applying overtime exemptions and/or tip pool requirements properly, have an effective and legal strategy for combating union organization efforts, and are in compliance with applicable workplace health and safety and FMLA leave requirements. If you have employee benefit plans, be sure you are in compliance with respect to administrative and notice requirements. And, of course, keep thinking about how you will address the employer mandate provisions of the Affordable Care Act, even though the compliance deadlines for some provisions of this Act now have been postponed until 2015.
