DOL

Does Title VII Protect Gay & Transgender Employees? The Supreme Court May Soon Decide.

As early as November 30, 2018, the U.S. Supreme Court will decide whether to hear three high profile employment cases that question whether Title VII’s ban on sex discrimination protects gay and transgender employees.  These cases have significant implications on the proper scope of Title VII and the rights of the LGBT community in the workplace.

Under Title VII, an employer has engaged in “‘impermissible consideration of … sex … in employment practices’ when ‘sex … was a motivating factor for any employment practice,’ irrespective of whether the employer was also motivated by ‘other factors’.”

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Listen Up: The DOL Begins Public Listening Sessions on Its Overtime Rule

This week, the United States Department Labor (“DOL”) is conducting its first listening session on the white collar exemptions under the Fair Labor Standards Act (“FLSA”)—more commonly known as the “overtime rule.” Several additional listening sessions will take place later this month. The sessions are expected to focus on public opinion regarding changing the current minimum salary level for exempt employees from its current level of $455 per week ($23,660 annually). There is no fee to attend a session, but registration is required here.

These sessions are just the latest in the ongoing saga over revisions to the overtime rule that began two years ago in September 2016, when twenty-two states and dozens of business groups challenged the Obama administration’s overtime regulation revisions that were finalized earlier that year. The new rule was set to implement several changes, most notably raising the minimum salary level for exempt employees to $913 per week ($47,476 annually), effective December 1, 2016. Before the new rule could take effect, the Texas federal judge hearing the case issued a nationwide injunction preventing the DOL from implementing and enforcing it, based partially on a holding that the new rule exceeded Congress’s delegation of authority to the DOL. The Obama administration appealed, and after requesting additional time to respond, the Trump administration decided to uphold the position that the DOL had the authority to revise the applicable salary level. However, in July 2017, the DOL also issued a Request for Information (“RFI”) on the overtime rule, asking for the public to submit comments by the end of September. The following month, the district court judge granted the states’ and business groups’ motions for summary judgment, invalidating the regulation. The DOL decided to dismiss its appeal and instead to pursue its own regulatory rulemaking process.

The RFI asked broad ranging questions related not only to the salary level, but to other exemption-related requirements, such as the duties test. It elicited over 140,000 public comments, including from major representative and advocacy organizations such as the United States Chamber of Commerce and Independent Sector (representing the nonprofit sector). The Chamber opposed only an “excessive increase,” suggesting that based on data from the Bureau of Labor Statistics, a more modest increase to a minimum salary of $612 per week ($31,824 annualized) was more appropriate. The Chamber also expressed its opposition to any change to the duties test. The Independent Sector highlighted the heavy financial burden the proposed increase would bring to the already-financially-strained nonprofit/charitable organizations nationwide. It suggested that any change be phased in to permit organizations time to adapt, and also expressed concern that any potential change to the duties test would “significantly impact the operations of charitable organizations,” asking that any change be considered through a formal rulemaking process allowing the public time to comment and review.

Last week’s announcement on the listening sessions offered our first glimpse into the DOL’s rulemaking process since the RFI period closed last year. Notably, the agenda questions focus exclusively on the salary test—a much narrower set of questions than those posed in the RFI. Listening Session participants are asked to focus on the four following issues: (1) “the appropriate salary level (or range of salary levels) above which the overtime exemptions for bona fide executive, administrative, or professional employees may apply”; (2) “[w]hat benefits and costs to employees and employers might accompany an increased salary level”; (3) “the best methodology to determine an updated salary level”; and (4) whether the DOL should “more regularly update the standard salary level and the total-annual-compensation level for highly compensated employees.” Noticeably absent is any indication that DOL is considering automatic inflationary updating to the salary level test. This reverts back to the position in the Bush DOL that the Department did not have statutory authority to implement automatic updating. In any event, this suggests that the DOL is shying away from changes to the duties test or other more expansive revisions as the formal rulemaking process rarely expands beyond the scope of the informal information gathering. The answer will have to wait until the Notice of Proposed Rulemaking is released, which is expected in January, at the earliest.

Change of Course? OFCCP Issues Long-Awaited Revised Compensation Guidelines

In a highly anticipated move, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued its new compensation directive on August 24, 2018. Directive (DIR) 2018-05, Analysis of Contractor Compensation Practices During a Compliance Evaluation, replaces the Obama-era compensation guidance DIR 2013-03, Procedures for Reviewing Contractor Compensation Systems and Practices (referred to as Directive 307). OFCCP also included a list of 22 Frequently Asked Questions (FAQs) with DIR 2018-05. READ MORE

OFCCP Director’s Departure Should Not Change Agency’s Priorities

OFCCP recently lost Trump-appointed Director Ondray Harris due to his resignation. Deputy Director Craig Leen takes Harris’s place in the interim. Harris’s departure raises some important questions that covered federal contractors may be asking.

What was Harris able to accomplish during his short tenure?  During Harris’s time at the Agency, there were few policy developments. The Agency extended the moratorium on audits for many health care providers who offer medical coverage under the military’s TRICARE program. In addition, the Agency made good on its promise to provide contractors with additional transparency by (1) publishing its scheduling methodology; and (2) releasing a guidance document titled “What Contractors Can Expect” that stresses good behavior by the Agency and its staff. READ MORE

OFCCP to Change the Way it Assesses Contractors’ Compensation Systems

The Office of Federal Contractor Compliance Programs (“OFCCP”) may soon rescind Directive 307, OFCCP’s current official statement as to how it conducts federal contractor compensation system reviews, according to a story published by Bloomberg Law on April 19, 2018. This announcement comes on the heels of Directive 2018-01, issued by the OFCCP on February 27, 2018, which mandates the use of Predetermination Notices (“PDN”) prior to issuing a Notice of Violation (“NOV”), and further requires national office oversight and approval before a PDN is issued.  OFCCP notes that Directive 2018-01 is consistent with the agency’s focus to increase transparency about preliminary findings with contractors, and encourage communication throughout the compliance evaluation process.  Combined, these two developments illustrate that change is afoot at OFCCP, now that new leadership is in place in Washington. READ MORE

Auto Dealership Sells Supreme Court on Service Advisor OT Exemption

On Monday, the U.S. Supreme Court ruled that service advisers at car dealerships are exempt from the Fair Labor Standards Act (FLSA).  In Encino Motorcars v. Navarro, the majority, Chief Justice John Roberts and Justices Clarence Thomas, Anthony Kennedy, Samuel Alito, and Neil Gorsuch voted to overturn the Ninth Circuit’s ruling on this exemption a second time, deciding that service advisors are “salesm[e]n . . . primarily engaged in . . . servicing automobiles,” and thus are exempt from overtime pay.  READ MORE

OFCCP’s New Directive on Predetermination Notices Gives Contractors a Second Chance

Effective February 27, 2018, the Office of Federal Contract Compliance Programs (OFCCP), which is charged with ensuring federal contractors and subcontractors provide equal employment opportunity, issued Directive 2018-01, announcing that predetermination notices (PDNs) will be sent to federal contractors and subcontractors for all audits and compliance reviews where a finding of unlawful employment discrimination is imminent.  READ MORE

Are Interns Actually Employees? DOL Adopts New Guidance for Assessing Whether Interns Qualify as Employees

As part of its revision of Obama-era policies, the U.S. Department of Labor (“DOL”) recently announced a new test for assessing whether interns qualify as employees under the Federal Labor Standards Act (“FLSA”). The agency’s adoption of a “primary beneficiary” test aligns the DOL with several circuit court decisions and provides greater flexibility in analyzing intern-employer relationships under federal law. READ MORE

The Federal Overtime Rule Stalls and State Minimum Wage and Overtime Rules Rev Up

The Obama-Era Overtime Rule Stalls

As we previously reported, a federal district judge’s invalidation of the Obama-era overtime rules – which proposed a sharp increase in the salary threshold for exempt employees, expanding overtime pay to millions of workers – did not doom the possibility of changes to the minimum salary requirements.  Last week, on October 30, the Department of Labor filed a notice of appeal of the decision.  The notice comes after the DOL started the rulemaking process to replace Obama’s Rule with a new rule increasing the current minimum salary level by about 50% (to around $33,000).  If this became effective, it would be a significant departure from the Obama-era Rule, which doubled the minimum salary level to $47,476.  The DOL is expected to issue the new proposed rule in the coming months. READ MORE

Another One Bites the Dust: DOL Rescinds Obama’s Persuader Regulations

Collective bargaining- boss and worker with thumbs up and down Another One Bites the Dust: DOL Rescinds Obama’s Persuader Regulations

Earlier this month, the United States Department of Labor (“DOL”) announced its intent to rescind the Obama-era regulations regarding persuader activity and reporting requirements pursuant to Section 203(c) of the Labor-Management Reporting and Disclosure Act (“LMRDA”).  Under the Obama administration, persuader activity was considered activity by anyone engaged to help management discourage employees from forming or joining a labor union, including lawyers hired to advise management on how to discourage union organizing activity. The official rescission of the Rule was published in the Federal Register on June 12, 2017.

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