What Will Happen to the Salary-Exempt Regulations Under the New Administration?

In Labor by Coolidge Wall

We have continued to follow the litigation and political maneuvering surrounding last year’s proposed wage and hour regulations. Those regulations, which would have increased the threshold requirement for most salary exempt positions from $455 to $913 per week, were temporarily halted nationwide last November by a federal judge in Texas. Since that time, the case has been appealed to the Fifth Circuit Court of Appeals, while political wrangling over the regulations has continued. Recently, President Trump’s initial pick for Secretary of Labor, Andrew Puzder, withdrew his nomination and was replaced by Alexander Acosta, the dean of Florida International Law School.

Given that Mr. Acosta had not yet been officially confirmed (his Senate confirmation occurred on April 27th ), the United States Department of Justice filed an unopposed motion, which was granted, giving the DOL until June 30, 2017, to file its Reply Brief with the appeals court. The stated reason for the DOL’s briefing extensions has been to “allow incoming leadership adequate time to consider the issue.” While many speculate that Secretary Acosta will be opposed to the Obama administrative regulations in their entirety, comments made by him during his confirmation hearings suggest he might be open to some compromise and change to the regulations rather than withdrawing them outright. Specifically, Mr. Acosta noted that the “world has gotten more expensive” and, if one were to apply an inflationary adjustment, the annual salary level for an exempt employee “would be somewhere around $33,000 give or take.”

While the case remains on hold in the court of appeals, several motions remain pending before the district court which could impact the regulations. These motions include an attempt by the Texas AFL-CIO to intervene as an additional defendant in the case, which could ensure that at least one party to the litigation continues to support the new regulations even if the DOL no longer does, and a motion for summary judgment filed by several of the original plaintiffs, which could result in a permanent injunction against the implementation of the regulations altogether.

Coolidge Wall will continue to closely monitor these developments and their impact on your company. For further advice, please contact a member of the Labor and Employment Department.

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