Overtime Rule May Be Issued Faster Under New DOL Leadership

By Allen Smith, J.D., Roy Maurer and Dana Wilkie July 15, 2019
Overtime Rule May Be Issued Faster Under New DOL Leadership

​Employers can expect to see change more quickly at the Department of Labor (DOL), including issuance of a final overtime rule perhaps as soon as year's end, under the new leadership of Acting Labor Secretary Patrick Pizzella, who will likely move ahead with his efforts as the nomination process for Eugene Scalia proceeds.

Pizzella is completely committed to ensuring the rule is finalized by year's end, said Michael Lotito, an attorney with Littler in San Francisco, "knowing that once 2020 begins, all focus turns to the election and any new rules take on heightened politization." 

Former Labor Secretary Alexander Acosta resigned July 12 after he came under fire for having secured a plea deal for convicted pedophile and newly indicted Jeffrey Epstein.  

Since the new indictments, "All the news about the DOL has been about Epstein and nothing about what it's doing," said Tammy McCutchen, an attorney with Littler in Washington, D.C., and former administrator for the DOL's Wage and Hour Division. Acosta's resignation means the Epstein controversy won't "distract from everything good the DOL has accomplished."

Paul DeCamp, an attorney with Epstein Becker Green in Washington, D.C., and a former administrator with the Wage and Hour Division as well, said, "Pat was at DOL when I was there and I know him pretty well." He said Pizzella "is very focused on getting things done. He is the kind of leader who will quickly develop an understanding—if he has not already done so—of what the department can realistically achieve during the remainder of this term, and he will push to ensure that the various agencies at the department continue to make progress along that path."

McCutchen observed that Pizzella provides continuity, as he was labor deputy secretary, which should help speed rule-making.

Status of the Overtime Rule

Employers are particularly interested in the overtime rule. In it, the DOL has proposed raising the salary threshold for white-collar exemptions to $35,308 annually. The proposed level is a compromise between the current $23,660 threshold and the now-blocked $47,476 cutoff that was adopted by President Barack Obama's administration in 2016.

Of the 115,000 comments filed on the overtime rule from March 22 to May 21, only 200 are substantive, McCutchen said. Most of the filed comments are the same form letter. The DOL is already reviewing the comments. Employee advocates are saying the DOL should defend the 2016 final rule that was blocked by the courts and not go below $47,476. Some are saying the salary threshold, correcting for inflation, should be set at $51,000 and are "very much opposed" to the proposed $35,308 level, McCutchen observed. The Society for Human Resource Management (SHRM) stated in comments that it supports the threshold being set at $679 per week, or $35,308 annually.

"Certainly there are employers, particularly in rural or southern markets, that feel that the new proposed salary threshold for exempt status is too high," DeCamp said. "But overall the sense in the business community seems to be that the proposed rule is more or less in line where things have been historically."

[SHRM members-only toolkit: Complying with U.S. Wage and Hour Laws and Wage Payment Laws]

McCutchen said employers also are interested in the proposed rule on the regular rate of pay and the proposed rule on joint employers. Under Pizzella, she said, she is "more confident the DOL now will be able to complete all three regs this year or maybe in the first quarter of next year."

In its proposed overtime rule, the DOL projected that the final rule would take effect by January 2020. If that winds up being the case, the final rule might be issued as early as September or October, noted Alfred Robinson Jr., an attorney with Ogletree Deakins and former acting Wage and Hour Division administrator in Washington, D.C. But the proposed rule's estimation is only a projection.


Pizzella also will oversee other DOL agencies, including the Office of Federal Contract Compliance Programs (OFCCP).

During Acosta's and OFCCP Director Craig Leen's tenure, "The OFCCP has become more transparent in its dealings with government contractors," said Alissa Horvitz, an attorney with Roffman Horvitz in McLean, Va. Horvitz said she hoped Pizzella would let Leen continue implementing the changes, including explaining how the OFCCP selects organizations for audits, that Leen has begun.

Connie Bertram, an attorney with Polsinelli in Washington, D.C., said, "Pizzella is known as an ally of management who may be more aggressive than Acosta in imposing a more business-friendly agenda." She predicted Pizzella may be less deferential to the actions of career staff members.

Workforce Development and Immigration

Acosta stepped down just as Kentucky workforce chief John Pallasch has been confirmed to lead the DOL's Employment and Training Administration, responsible for administering two big policy areas important to the White House—workforce development and foreign labor certification for the nation's immigrant workers. Pallasch will finalize the department's new industry-led apprenticeship rule.

The DOL also has appropriated funds to expand its registered apprenticeships. "The majority of this money that has been spent already has gone to states, with a lot of flexibility in how they spend it," said Katie Spiker, director of government affairs at the National Skills Coalition, a Washington, D.C.-based public-policy research and advocacy group. "Congress is likely to add to that investment and continue funding apprenticeships at least at those levels this year, too."

It is unclear if Acosta's departure will result in any changes to the DOL's responsibilities for foreign labor certification, a necessary first step in hiring workers for employment-based visas and guest worker visas such as the H-1B, H-2A and H-2B.

During his tenure, demand had grown exponentially for the temporary visas, prompting the DOL to start holding lotteries for available slots. Acosta had said he would support an overhaul of the H-2B system that would take into consideration the needs of highly seasonal regional economies.

Allen Smith, J.D., is SHRM's manager of workplace law content. Roy Maurer is SHRM online manager/editor for talent acquisition. Dana Wilkie is online manager/editor for employee relations.



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