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UPDATED JULY 20, 2017
· The USCIS announced the release of a revised version of the I-9, Employment Eligibility Verification. The revised version may be used immediately but must be used no later than September 18, 2017. Employers must continue following existing storage and retention rules for any previously completed I-9. You can read more and access the revised version here:http://www.jacksonlewis.com/publication/uscis-releases-new-form-i-9-and-new-handbook-employers
· The U.S. Supreme Court term that ended June 2017 included a number of decisions involving workplace law. The Court managed to achieve a strong consensus in each of its employment-related rulings. To review a summary of the recent employment law rulings issued by the Supreme Court this term, you can access a summary here: http://www.jacksonlewis.com/publication/us-supreme-court-round-2016-2017
· An employee fired after she tested positive for marijuana on a test administered in the hiring process should be able to proceed with her “handicap discrimination” claim under the Massachusetts’ antidiscrimination statute, the Massachusetts Supreme Judicial Court has ruled on July 17th. The state high court decision means the search continues for clarity in balancing safety in the workplace with the ever-growing number of workers seeking to continue use of medicinal marijuana in accordance with state laws. You can read more here: http://www.jacksonlewis.com/publication/claim-massachusetts-employee-fired-medical-marijuana-use-may-proceed-state-high-court-rules
· A Senate committee approved the nominations of William Emanuel and Marvin Kaplan to the National Labor Relations Board earlier today. The next step is a full vote on the Senate floor. However, given the August recess and the pending health-care bill, it is hard to determine when a vote by the full Senate to confirm the nominees will be scheduled.
· To review the top 5 labor law developments in June, 2017, you can review a summary here: http://www.jacksonlewis.com/publication/top-five-labor-law-developments-june-2017
· On June 26, 2017, the U.S. Supreme Court agreed to review whether the Dodd Frank Act’s whistleblower anti-retaliation provisions protect employees who only complain internally to their employer but do not complain directly to the U.S. Securities and Exchange Commission. In doing so, the Court may resolve a split among the circuit courts over what actions an employee must take in order to be considered a “whistleblower” for purposes of Dodd-Frank’s whistleblower protections. You can read more here: http://www.jacksonlewis.com/publication/supreme-court-set-decide-whether-dodd-frank-protects-internal-whistleblow
UPDATED JUNE 2017
OVERTIME EXEMPTION UPDATE
DOL Will Issue New Rule to Set Salary for White Collar Exemptions, But Asks Fifth Circuit to Reverse District Court Order Granting Nationwide Preliminary Injunction
By Jeffrey W. Brecher, Paul DeCamp, Eric R. Magnus and Noel P. Tripp
The government has asked the Fifth Circuit Court of Appeals to reverse a Texas District Court Judge who issued a nationwide preliminary injunction blocking the Department of Labor’s Final Rule which would have more than doubled the required salary level for the “white collar” overtime exemptions under the Fair Labor Standards Act.
On June 30, 2017, the government argued the district court erred in finding the DOL may not set a minimum salary as a requirement of the exemptions and asked the Fifth Circuit to “reaffirm the Department’s statutory authority to establish a salary level test.” The district court had held the Final Rule was invalid because Congress intended the exemptions to turn on the duties performed by employees, not the salary level.
The government also stated, however, that the DOL “has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time” and that it “intends to undertake further rulemaking to determine what the salary level should be.” The government thus asked the Court to “address only the threshold legal questions of the Department’s statutory authority to set a salary level, without addressing the specific salary level set by the 2016 final rule.” It further noted that a proposed rule would not be issued until its authority to set a salary level has been confirmed, but that it will publish a “request for information” seeking public comment that would “aid in the development of a proposal.”
The government’s latest filing confirms the DOL intends to repeal and replace the Final Rule with a new, trimmed down version, likely setting the required salary level somewhere in the low- to mid-$30,000 range, based on earlier comments from Secretary of Labor Alexander Acosta. That move would undo one of the Obama Administration’s signature achievements and unravel more than two years of rulemaking.
Consistent with that plan, as noted in the filing, the DOL had announced it would issue a “Request for Information” seeking comments from the public on the overtime rule, which will be its first step before a new proposed rule is issued. The Request for Information will be published in the Federal Register after it is reviewed by the Office of Management and Budget.
Background Regarding Final Rule
In May 2016, the Department of Labor issued its long-awaited Final Rule more than doubling the required salary for the white collar exemptions (those individuals employed in an executive, administrative, or professional capacity) from $23,660 to $47,476. The Final Rule also raised the required salary level for the “highly compensated” exemption, from $100,000 to $134,004, and established rules for automatic increases to those levels every three years. Issued after more than 270,000 comments were received by the DOL, the Final Rule was set to take effect on December 1, 2016.
Employers, including state governments and non-profits, however, balked after the Final Rule was issued. They argued the drastic increase to the salary level requirements for the exemptions would result in unacceptable increases in labor costs, loss of flexibility in the workplace, or lower wages and benefits to previously non-exempt employees, whose hours now would be reduced to avoid payment of overtime.
Lawsuit Filed Challenging Final Rule
In September 2016, 21 States and various business groups filed lawsuits in the Eastern District of Texas seeking to block the Final Rule, and the State Plaintiffs sought a preliminary injunction barring the DOL from implementing the Final Rule. While employers were gearing up to implement the Final Rule, either reclassifying workers as non-exempt, raising salary levels to satisfy the new requirements, or restructuring jobs to ensure employees did not work more than 40 hours a week, the court in Texas was mulling over the request for an injunction.
On November 22, 2016, days before the effective date of the Final Rule, District Court Judge Amos Mazzant (an Obama appointee) gave the State Plaintiffs what they asked for — a nationwide injunction barring the Department of Labor from implementing or enforcing the Final Rule. In granting the preliminary injunction, the court found that nowhere in the text of the FLSA was any indication that Congress intended the exemptions for white collar workers to include a salary level requirement. The exemptions, the court found, were intended to be dependent on the duties of the employees. The Final Rule essentially created a “de facto salary-only test,” making approximately 4.2 million workers eligible for overtime even though their duties might qualify them for the exemption, the court held in granting the injunction.
Government Files Appeal to Fifth Circuit
With the inauguration date of Donald Trump looming, the government quickly appealed to the Fifth Circuit Court of Appeals on December 1, 2016, asking for expedited briefing on the appeal. Following the inauguration of a new administration, however, the government no longer sought an expedited appeal, but instead more time. The government asked for three extensions of time in which to submit its final reply brief in support of the appeal in order to give the new administration time to consider the issues. The delayed nomination of a Secretary of Labor, following the withdrawal of Andrew Puzder from consideration, was cited as a reason for the request for more time.
Oral argument. The Fifth Circuit will schedule oral argument on the appeal. But the filing raises several important questions. For example, if the Fifth Circuit reverses the lower court, does the Final Rule become effective immediately (or effective retroactively to the original effective date), or is there an alternative basis for the district court to continue the injunction?
The brief filed by the government on June 30 noted that the district court had not ruled on whether the Final Rule is unenforceable because it was arbitrary and capricious or “unsupported by the administrative record,” which may form the basis to continue the injunction.
Employers faced with this dizzying path of events are justifiably confused. Nonetheless, as it stands now, the preliminary injunction is in place and no new rule has been proposed yet.
We will continue to follow this case. Please contact the Jackson Lewis attorney with whom you work regarding any questions about the decision and compliance with the Final Rule.
©2017 Jackson Lewis P.C. This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between Jackson Lewis and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of Jackson Lewis.
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· Immigration: New guidance explaining the criteria for visa applicants was issued by the Department of State to U.S. Embassies and consulates on June 28, 2017. The guidance will go into effect on June 29th at 8:00 p.m. EDT. The guidance is in response to the U.S. Supreme Court’s June 26, 2017 partial reinstatement of President Donald Trump’s revised Executive Order. You can read more here: http://www.jacksonlewis.com/publication/new-guidance-trump-s-revised-travel-ban-effective-june-29 · EEOC: President Trump plans to nominate Janet Dhillon as the next chair of the EEOC. Dhillon has served as general counsel for three major U.S. Corporations. Dhillon, executive vice president and general counsel of Burlington Stores, Inc., will be appointed to a 5 year term on the EEOC and would become chair upon confirmation by the Senate. Democrats currently hold a 3-1 majority on the commission. · Labor: President Trump nominated a management side labor law attorney, William Emanual, to the NLRB. Within the past week, President Trump also nominated Roger Kaplan to the NLRB. Both nominations are awaiting Senate confirmation. However, given the August recess and other pressing matters, it is unlikely that we will see a Senate confirmation on both nominations very soon. · Wage and Hour: The Department of Labor announced that it is bringing back Wage and Hour Division opinion letters. As you may recall, opinion letters allow employers and workers to ask the department to weigh in on the legal issues in a particular factual situation. Employers can then use those letters in court as a good-faith defense in federal minimum wage, overtime and FMLA cases. · Wage and Hour: As you may recall, the Obama Administration issued a Final Rule raising the salary level for the White Collar exemptions from $23,660 to $47,476 that was to become effective 12/1/16. In November, a federal district court judge in Texas issued an injunction blocking the rule. The Obama Department of Labor appealed the decision to the 5th Circuit, but after the election, instead of pushing the appeal, the Trump DOL asked for several extensions to submit its final reply brief so the new administration could consider (reconsider) the issue, which is now due tomorrow. No request for an additional extension has been filed this week, so it is likely the government will file the brief on Friday and stake out its position. Also, on Tuesday of this week, the DOL submitted a proposed “Request for Information” to the OMB for review. This is likely the first step in issuing a new rule, but the Request for Information has not been published yet. Thus, the brief filed on Friday may provide the first clear statement of what the DOL’s intention is regarding the Final Rule. We will continue to keep you updated. · Wage and Hour: The Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors were withdrawn effective June 7, 2017. · Labor: The House Education and Workforce Committee approved two bills that would dismantle the NLRB’s so-called Quickie Election Rule. The Workforce Democracy and Fairness Act would require a 35 day waiting period after a petition is filed before an election can take place. There is also a bill that would make it easier for employers to file legal challenges to organizing drives before an election would take place. We will keep you updated on any advancements to these bills. · Labor: To read the top 5 Labor Law Developments in May of 2017, please click here: http://www.jacksonlewis.com/publication/top-five-labor-law-developments-may-2017 · Public Sector: The Department of Education regional directors have been given new instructions on sex discrimination protections for transgender students under Title IX of the Education Act of 1972. Two updated internal Office of Civil Rights guidance documents outline changes to the appropriate scope of the OCR investigations and to the Department’s interpretation of Title IX. You can read more here: http://www.jacksonlewis.com/publication/investigating-transgender-student-discrimination-under-new-education-department-directives