The Department of Labor (DOL) is currently in state of transition after former Secretary of Labor Alexander Acosta resigned in July amid controversy. Patrick Pizzella, the previous labor deputy secretary, became acting secretary on July 20 and President Donald Trump nominated Eugene Scalia to permanently fill the role.
Given the leadership changes, questions have been raised by employers about what it means for several significant workplace rules proposed by the DOL that have yet to be finalized. The key issues still in flux are the Fair Labor Standards Act (FLSA):
The proposed overtime rule set the salary threshold at $35,308. In its comment letter submitted in May, WorldatWork agreed with the DOL’s proposed rule. In the letter, WorldatWork said it believes the new proposed salary level is “reasonable and workable” and that using a consistent methodology to calculate the salary level is important.
This proposed joint employment rule would revise how businesses can determine whether they are “joint employers” for purposes of the FLSA. The rules govern circumstances in which multiple employers can be held responsible for wage and hour violations. The proposal would ensure employers and joint employers clearly understand their responsibilities to pay at least the federal minimum wage for all hours worked and overtime for all hours worked over the 40-hour workweek.
This proposed regular rate rule was proposed to clarify and update the regulations that govern regular rate of pay requirements under the FLSA. The proposal would confirm that certain types of employer-provided benefits may be excluded from the regular rate, such as wellness benefits and payouts of unused vacation time. It’s the first time in 50 years that a change to the definition has been proposed.
Michael Lotito, an attorney with Littler in San Francisco, said Pizzella’s main charge is to implement these rules as quickly as possible.
“He is deeply, deeply committed to getting those rules finalized and published no later than the end of this year,” Lotito said. “And he wants to do it in a way that the rules are going to withstand the inevitable legal challenges that come from anything the Department of Labor seems to do.”
Scalia is the son of the late U.S. Supreme Court Justice Antonin Scalia and is currently a partner with Gibson, Dunn & Crutcher in Washington, D.C. Scalia is a member of the firm’s labor and employment practice group and is considered pro-business. Scalia has prior government experience, as he was previously the solicitor of the DOL under President George W. Bush, and he also served as special assistant to U.S. Attorney General William P. Barr.
Lotito called Scalia an “astute individual” and said his experience as a practitioner makes him a worthy candidate for the role and one that employers will be satisfied with.
“He understands the impact that rules have on employers — he doesn’t operate in a vacuum,” Lotito said. “He knows that when the Department of Labor says the exempt salary rate is going to be X, that then puts into motion a whole series of decisions for a company. Those insights and sensitivity as to the practicalities of what occurs at a company for compliance purposes when these types of changes take place makes him a very, very good candidate for becoming the secretary.”
Scalia still must be confirmed by the Senate before he can take over as secretary, which could be a slow-moving process based on recent history. Lotito said the process involves significant paperwork, background checks and an initial hearing of the candidate before the Senate Health, Education, Labor and Pensions Committee, all of which must happen before a full Senate vote.
“We just went through a process where it took us seven months to get a new secretary of defense,” Lotito said in reference to Mark Esper’s confirmation process. “There’s been a general lethargy with respect to approving a number of different presidential appointments for tons of reasons, so we’ll see just how quickly Mr. Scalia can get in front of the Senate Help Committee to their vote and then ultimately get on the floor of the Senate for a confirmation, and hopefully that will take place this year.”
About the Author
Brett Christie is a staff writer at WorldatWork.