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This week’s stories include ...
(1) DOL Will Not Defend Salary Levels in Obama-Era Overtime Rule
Our top story: The Department of Labor (DOL) will not defend the salary levels in the Obama-era overtime rule. In a long-awaited reply brief to the U.S. Court of Appeals for the Fifth Circuit, the DOL stated that it will not seek to defend its overtime rule, which was the subject of a November 2016 nationwide injunction. The DOL did, however, ask the appeals court to affirm that the agency has the authority to set an overtime exemption salary threshold level. According to the brief, the DOL plans to undertake further rulemaking to establish a revised exempt salary threshold. That threshold is likely to be lower than the $913 per week minimum in the rule that was enjoined. Jonathan Brenner, from Epstein Becker Green, has more:
“If the Fifth Circuit reverses the district court's injunction ruling, it’s not clear what will happen to the prior administration's rule on the exemption test. The picture, if anything, has become even murkier now, with the government’s reply submission, than it was before. It is possible that the injunction being lifted will cause the rule to become effective, either immediately or in due course. It’s also possible that based on how the Fifth Circuit rules and how far-reaching its decision is, that something else might occur. What will be important as well is what the district court may do following any such decision.”
(2) Trump Taps Janet Dhillon to Head EEOC
Trump has tapped Janet Dhillon to be Chair of the Equal Employment Opportunity Commission (EEOC). Dhillon is currently General Counsel at Burlington Stores—a position she previously held at JC Penney. If confirmed, Dhillon will take over for Victoria Lipnic, who is currently serving as Acting Chair. One more vacancy is expected to open up on the five-member EEOC when former Chair Jenny Yang’s extended term ends.
(3) DOL Will Reinstate Issuance of Opinion Letters
The DOL will bring back opinion letters. Prior to 2010, Wage and Hour Division opinion letters addressed specific questions presented by employers or employees requesting an opinion regarding the application of the Fair Labor Standards Act or Family and Medical Leave Act to specific circumstances. In 2010, opinion letters were replaced with “Administrator’s Interpretations,” which offer general clarification on the interpretation of a statute or regulation. Opinion letters are direct, public responses to fact-specific questions that can be used in court to help prove a “good faith” defense.
(4) Tenth Circuit Creates Split on Tipping Rule
The Tenth Circuit has created a split on tip credits. A 2011 DOL wage rule states that tips are the property of the employee who receives them, regardless of whether the employer takes a tip credit. In this case, a worker was paid an hourly rate above the minimum wage in addition to tips. She sued her employer for violating the rule by allegedly withholding her tips. The Tenth Circuit affirmed the dismissal of the employee’s claim, finding that the DOL exceeded its authority in protecting tips when the tip credit was not used to meet the minimum wage obligation. This decision is at odds with a Ninth Circuit ruling on the same issue. With a Supreme Court appeal pending in the Ninth Circuit case, it’s likely that the High Court will take up this issue and resolve the split on tips.
(5) Tip of the Week
Ira Hammerman, EVP and General Counsel for SIFMA, shares some tips on how to advise business partners when dealing with the financial regulatory environment:
“My best piece of advice right now, given the change that we’re going through with the new administration, is not to get obsessed over every tweet, over every speech, over every press comment, and take a long-term perspective. This is a very highly regulated industry, and it’s going to take time for any regulations to change. So, I would tell people to take a long-term view and temper their expectations on the pace of change.”
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