By T. Scott Gilligan, NFDA general counsel
Two new developments in the tortured path of the U.S. Department of Labor’s (DOL) new white-collar exemption regulation were reported in recent weeks. On June 27, the DOL sent a formal request for Information on the white-collar regulation to the Office of Management and Budget (OMB). This filing indicates that the Trump administration will be re-opening the rulemaking with a new proposed white-collar rule that would lower the salary level.
As reported previously, the regulation, which the Obama administration approved and which was scheduled to take effect December 1, 2016, would have required employees who are covered by the exemption to receive annual compensation of at least $47,476 in order to maintain the exemption. This would have required funeral homes in states where funeral directors meet the requirements of the white-collar regulation to pay those licensees at least $47,476 annually to maintain the exemption from the overtime provisions of the Wage and Hour Law.
The DOL white-collar regulation was blocked last November by a federal district court in Texas and never took effect. In issuing the injunction, the federal district judge did not rule on the merits of the $47,476 salary level but instead found that the DOL never had the authority to set any type of salary level even though the department has been doing so for the past 75 years.
In order for the Trump administration to set a lower salary level, like the $33,000 figure proposed by Secretary of Labor Alexander Acosta during his confirmation hearings, it needs to negate the court’s ruling that the DOL has no authority to set a salary level. Therefore, when it filed its reply brief to the Fifth Circuit June 30, 2017, the DOL asked the appellate court to: 1) reverse the trial court’s decision that the DOL has no authority to set a salary level and 2) to dismiss the appeal of the $47,476 salary level because the Trump administration will be replacing it with a new number developed through its new rulemaking.
Once OMB finishes its review of the DOL’s Request for Information, the request will be published and we will learn the details of the DOL’s plans for the white-collar regulation. We are also tracking the ongoing appeal to see what the Fifth Circuit Court of Appeals will do on the DOL’s request to restore the salary level but dismiss the appeal of the $47,476 regulation.
Originally published in the Memorial Business Journal, July 6, 2017.