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Fair Labor Standards Act
2018 Legislative Proposals

The 2018 legislative session is well underway.This year, lawmakers introduced dozens of bills that could impact many different areas of labor and employment law.  For instance, some of these proposals could revise Hawaii law on the following topics:

  • Notice of Work Schedules
  • Paid Sick Leave
  • Hiring Practices
  • Employment Discrimination
  • Paid Family and Medical Leave
  • Pay Secrecy and Transparency
  • Social Media Privacy
  • Workplace TRO’s
  • Independent Contractors
  • Wage Discrimination
  • Minimum Wage
  • Workers Compensation
  • Temporary Disability Insurance

Many of these measures have been heard and passed out by their assigned committees, whereas others may end up on the cutting room floor this week.  The Hawaii Employers Council (“HEC”) will be closely monitoring these bills during the 2018 legislative session.

You can view a listing of bills that HEC will be monitoring here:  2018 Employment Bills Introduced.   An updated list of bills will be issued following the First Crossover deadline.

 
DOL Withdraws Prior Guidance on Joint-Employers

Earlier today, the U.S. Department of Labor withdrew a previous Administrative Interpretation regarding when two or more companies can constitute joint-employers for purposes of the Fair Labor Standards Act.  For my thoughts on what this means for employers, you can read a write-up by the Pacific Business News here:  Department of Labor withdrawal of joint employment guidance “good news” for employers.

 
Expedited Appeal Ok’d for Injunction Against FLSA OT Rules

The Fifth Circuit Court of Appeals has granted a request by the Department of Labor (“DOL”) to conduct an expedited appeal of the injunction that was issued last month against their new FLSA overtime rules.  Under the expedited schedule, briefs for the appellants will be due in December 2016 and January 2017, and thereafter the court will schedule oral argument for the appeal on “the first available sitting after the close of briefing.”

Interestingly, even though the court has expedited the appeals process, it will not be able to issue a decision before the Trump administration takes office.  Therefore, it remains to be seen what a DOL that is run by Trump appointee Andrew Puzder – who has been critical of the FLSA rules – will do with regards to the appeal.

 
Nationwide Injunction Imposed Against New FLSA Rules

It looks like Christmas has come early for employers all around the country.  On November 22, 2016, a federal judge from Texas issued a nationwide preliminary injunction prohibiting the U.S. Department of Labor from enforcing its new rules regarding the executive, administrative, and professional (“EAP”) exemptions under the Fair Labor Standards Act.

Hooray!

hooray

For all those employers who were going to be converted to non-exempt status solely because of the increased salary threshold, those employees can remain exempt.  For those employees who were set to receive a pay increase due to the new FLSA rules, employers will need to make the tough decision on whether they will still increase employees’ salaries.  Some factors to consider are whether the pay increases have already been implemented or announced, the potential impact on morale, and the company’s budget.

To view a copy of the court’s decision, please click on the following link:  FLSA Rules Preliminary Injunction.

 
Two Lawsuits and Several Bills Challenging the DOL’s New FLSA Rules

UPDATE:  OMG!  Contrary to very-widely-held speculation, a federal district court actually did issue a preliminary injunction against the new FLSA rules!  And, the injunction applies nationwide!  Click here for further details:  Nationwide Injunction Imposed Against New FLSA Rules

———–

This has been a busy couple of weeks for the U.S. Department of Labor’s (“DOL”) new FLSA rules.  First, two lawsuits have been filed in a Texas federal court to seek an order preventing the DOL from enforcing its new overtimes rules.  In addition, a House bill - HR 6094 – is making its way through Congress to postpone implementation of the new FLSA rules for six months.  The new rules are currently set to take effect on December 1, 2016, which is just about two months away.

lawsuit

The first lawsuit was filed by 21 states and argues that the DOL overstepped its authority by raising the salary level for the FLSA’s Executive, Administrative and Professional exemptions (“EAP exemptions”).  The lawsuit argues that, instead of raising the salary level, the DOL should have reexamined the duties of the EAP exemptions.  In addition, the 21 states also challenged the automatic increases that are set to increase every three years “without regard for current economic conditions or the effect on public and private resources.”  Finally, the lawsuit posits that new DOL’s rules violate the Tenth Amendment because employment budgetary matters such as the pay requirements of state employees are subject to state sovereignty.

The second lawsuit was filed by a coalition of business groups, including the National Federal of Independent Businesses (“NFIB”) and several Chambers of Commerce.  This lawsuit argues that setting new salary threshold at an exceedingly high level and scheduling automatic increases both violate the Administrative Procedure Act.

(Both lawsuits have been assigned to Judge Amos Mazzant, who was appointed to the bench by President Barack Obama.  So, that’s not exactly great news…)

Finally, there are several bills pending in Congress that seek either (1) a delay of the new rules or (2) a phase-in of the increased salary threshold over several years.  Specifically, HR 6094 and S. 3462 both seek a six-month delay of the effective date of the new rules and HR 5813 and S. 3464 seek to phase-in the increases over several years.

Recently, the U.S. House of Representatives just voted 241-177 in favor of passing HR 6094.  The bill will now go to the U.S. Senate for consideration.  However, President Obama has previously threatened to veto the measure if it is passed and the Office of Management and Budget issued a statement that “strongly opposes” the bill.

Therefore, despite all these legal challenges to the new FLSA rules, employers should plan to implement whatever changes they deem necessary by the December 1, 2016 effective date.