Department of Labor reconsiders overtime expansion, joint-employer rules

In March and April, the U.S. Department of Labor issued notices of proposed rulemaking on two of the most hotly contested issues of its predecessor Obama department, overtime for junior managers and the joint-employer rule. Tammy McCutchen:

The DOL proposes to increase the minimum salary for exemption from $455 per week ($23,660 annualized) to $679 per week ($35,308 annualized)…. If adopted, the proposed rule would replace the final rule issued by the DOL on May 19, 2016, but enjoined by the Eastern District of Texas just weeks before its December 1, 2016 effective date. The 2016 final rule would have increased the minimum salary for exemption to $913 per week ($47,476 annualized)

Earlier here and here. In addition, DoL is proposing to clarify what times of compensation and benefits employers must include in the overtime calculations.

Separately, DoL’s proposed rule on joint employment

would replace the January 2016 Administrator’s Interpretation on joint employment, which did not go through the notice-and-comment rulemaking process and was withdrawn in June 2017.

Under the FLSA, companies found to be joint employers are jointly liable for all minimum wage and overtime violations. The statute does not include a definition of joint employment and has left this determination to the courts.

The joint employment issue has become increasingly important since the National Labor Relations Board (NLRB) dramatically expanded the definition during the Obama administration in the Browning Ferris decision, recently partially affirmed but remanded to the NLRB by the D.C. Circuit. The Trump NLRB has undertaken a rulemaking of its own, proposing to narrow the joint employer definition under the National Labor Relations Act, so as to restore the law, essentially, as it stood prior to Browning Ferris. The NLRB is currently poring over thousands of comments filed for and against its proposed rule. A final joint employer rule is expected from that agency by year end.

The joint employment concept is important because, among other matters, it determines when one employer (typically larger) can be held liable for the actions of another, such as a contractor or franchisee. The proposal would adopt a definition of joint employer originating in a 1983 Ninth Circuit decision in Bonnette v. California Health and Welfare Agency, which does not sweep as broadly as the later definition adopted by the NLRB in Browning-Ferris and by the Obama administration. More: McCutchen podcast on all three issues.

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