3 Wage and Hour Changes Under the Trump Administration

Lisa Nagele-Piazza, J.D., SHRM-SCP By Lisa Nagele-Piazza, J.D., SHRM-SCP November 14, 2018
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SAN FRANCISCO—President Donald Trump's administration promised to make changes in wage and hour initiatives and to scale back regulations. So what's different after the first two years of Trump's presidency?

Speaking at the American Bar Association's 2018 Labor and Employment Conference Nov. 9, a panel of attorneys identified three areas that employers should note. 

1. Opinion Letters

The Department of Labor (DOL) has resumed the use of opinion letters that describe how the agency would enforce federal wage and hour laws in specific circumstances presented by an employer, worker or other party who requests the opinion. The department stopped issuing these letters in 2010 and replaced them with more general guidance.

Opinion letters are official statements from DOL that "cover a variety of topics, and they are very specific," said Janet Herold, regional solicitor for the DOL in San Francisco.

There is a safe harbor for employers if they can show that they relied on an opinion letter—even if they were not the party that requested the letter.

Employers who have questions about complying with federal wage and hour laws should ask the DOL for an opinion before enforcement agents knock on their door or an employee files a claim, Herold said.

2. The PAID Program

The DOL launched the Payroll Audit Independent Determination (PAID) program this year, which gives employers the opportunity to cooperate with the DOL by conducting self-audits and voluntarily correcting any errors they find that violate the Fair Labor Standards Act.

The DOL wants to encourage employers to figure out if they are violating the law and promptly pay workers any missing wages, Herold said. Employers can bring their self-audit to the department, which will review the audit, ask questions and oversee the calculations to determine any amount due to workers.

Jason Marsili, an employee-side attorney with Posner & Rosen in Los Angeles, supports the PAID program but said the voluntary audit process shouldn't replace the agency's robust enforcement practices.

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

Herold said that workers can decide whether to take the amount offered through the PAID program and sign a release of claims. "The department will not require a release over the worker's objection," she said.

Employers should note that, just as with opinion letters, the PAID program is not available to employers if they are already being investigated by the DOL or involved in litigation with employees. Furthermore, even when employers resolve federal wage claims through the PAID program, workers may still file parallel state wage and hour claims.

"I think it's a good program," said David Fortney, a management attorney with Fortney & Scott in Washington, D.C. The current administration has changed the balance between enforcement and compliance assistance, he added. "I'd say it's more of a 50/50, whereas the previous administration used more enforcement."

The Society for Human Resource Management (SHRM) "welcomes DOL's efforts to incentivize employers to review wage practices and provide compliance assistance. Programs like PAID provide a bridge between government regulators and the workplace," according to Nancy Hammer, SHRM's vice president, regulatory affairs and judicial counsel.

3. Temporary Work Visas

Trump's 2017 "Buy American, Hire American" executive order called for reform of the H-1B temporary work visa process to ensure that visas are awarded to the most-skilled workers at the highest salary levels.

The administration is stepping up enforcement against employers who abuse the nonimmigrant visa process, Herold said.

"There is a real change here," she said. "We've known there is abuse in these programs for some time … and the abuses result in really quite tragic harm."

Immigrants who are hired through these visa programs can be vulnerable and typically don't have much bargaining power, she noted. Furthermore, these visas are only supposed to be issued if there are no domestic workers to fill the jobs, so the department is focused on prosecuting fraud charges against employers that falsify visa applications.

Marsili said he is concerned that heightened federal immigration enforcement activities may interfere with undocumented workers' right to claim earned but unpaid wages. For example, he said, it has recently been reported that Immigration and Customs Enforcement (ICE) agents have waited for undocumented immigrants outside courthouses.

"Workers are scared out there," Herold said.

She noted that employers are not allowed to make immigration-related threats to workers under federal law.

[Visit SHRM's resource page on FLSA exemption classification.]

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