Labor Secretary Acosta Talks About Deregulation, Gig Economy

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​The U.S. Department of Labor's (DOL's) priority is to create jobs, said Secretary of Labor Alexander Acosta at the American Bar Association's 11th Annual Labor and Employment Law Conference on Nov. 9.

Under President Donald Trump's executive order on reducing regulations, Acosta said the department can focus on freeing up money and creating efficiencies to "unleash jobs."

It is important that DOL looks at rules that impact economics and government impingement on liberty, he said. Some of the rules the department is closely examining include:

  • The persuader rule. This rule required consultants or attorneys to report indirect advice they give to employers about unions. The U.S. District Court for the Northern District of Texas  blocked the persuader rule last year, and the DOL plans to formally withdraw it.
  • The tip credit rule. Employers can pay tipped workers less than the standard minimum wage if certain conditions are met—including that tipped workers can't be required to share their tips with back-of-the house workers, such as cooks and dishwashers. "Some feel that menu prices have risen over time, causing tips to rise, but wages for back-of-the-house employees have not risen proportionally," so restaurateurs would like to be able to distribute tips among all, said Susan Schaecher, an attorney with Fisher Phillips in Denver, to SHRM Online in August.
  • The overtime rule. The salary threshold for the Fair Labor Standards Act's white-collar exemption hasn't changed since 2004. The $23,660 threshold "certainly needs to be updated," Acosta said, but the $47,476 threshold planned by President Barack Obama's administration "created a shock to the system, so we put out a request for information and are looking at the comments that were submitted."

[SHRM members-only platform: SHRM Connect]

Gig Economy

ABA Section of Labor and Employment Law Chair Don Slesnick asked Acosta to share his thoughts about how the DOL will approach independent contractors and the gig economy.

The U.S. Bureau of Labor Statistics (BLS) will be coming out with a new study on the gig economy for the first time since 2005, Acosta said. If the BLS data indicates that the gig economy is changing, maybe it's time to update the laws on independent contractors.

"So many of our laws presuppose a traditional employer-employee relationship," he said. Should that still the case? "BLS data will give us substantial insight into that."

At some point the economy does change, he added, noting that "we need to ask if those laws are still right for the modern economy." But he stressed that Congress should take the lead because laws should be made through the legislative process, not through agency guidance.

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