Looking Ahead: President Trump, the Overtime Rule, and Other Impacts on the Employment Landscape

November 10, 2016

By: Rachel D. Gebaide

The U.S. Department of Labor’s new overtime rule will take effect December 1st unless a federal judge in Texas issues an injunction after a hearing next week in an action challenging the rule.  In the meantime, employers must continue their plans to implement changes effective December 1st to pay exempt employees on a salary basis of $913/week ($47,476/year) or reclassify those employees as non-exempt, track their hours and pay overtime when those employees work more than 40 hours in any given seven-day work week (hospitals and residential care establishments such as skilled nursing and assisted living facilities may use the “8 and 80” rule).  Additional details for the new rule are discussed here.

Employers must remember that paying an employee on a salary basis does not, by itself, make the employee exempt from overtime.  The “duties” test has not changed.  An employee’s work must satisfy the duties test for the claimed executive, administrative, or professional – including computer professional — exemption.  This remains true for the current salary basis or the increased salary basis as of December 1st.

Donald Trump will become the 45th President on January 20, 2017, after the new overtime rule takes effect.  Trump will appoint a Secretary of Labor who may roll back many of President Obama’s employment-related initiatives, but changes may not be as dramatic as the president-elect’s pro-business stance would suggest.

  • The most anticipated action will be an attempt to repeal, replace or amend the Affordable Care Act.
  • Based on his campaign rhetoric, Trump is also likely to step-up scrutiny of I-9 compliance.
  • As for the overtime rule, Trump told Politico in August that he favors “a delay or a carve-out of sorts,” but only for small businesses.
  • Trump has also staked out a position on wages, sharing his interest in an increase in the federal minimum wage to $10, which is a break from the Republican Congress, which favored no increase.
  • Trump’s platform included a promise of six weeks of paid leave to new mothers and, at the same time, a promise to “end the radical regulations that force jobs out of our communities. . . .”  (www.donaldjtrump.com)

Trump’s distaste for regulations may result in some changes to the new overtime rule and possibly a roll-back of the new rule requiring large employers to include payroll data on their EEO-1 forms.  His appointments to the NLRB may also result in a decreased emphasis within that agency on joint employer relationships, among other aggressive positions the NLRB has taken in recent years in favor of worker’s rights.

Businesses should expect some change in the employment law landscape with the new administration. However, as the country observed during the election, the president-elect has shifted positions on many issues, many times.  Trump’s appointments to the DOL, the EEOC, NLRB, and OSHA, among other cabinets and agencies, will indicate his vision for the relationship between government and business on employment issues.  In addition, Trump’s appointments to the U.S. Supreme Court, regardless of whether he follows through on his promise to nominate “ultra-conservatives,” will have an impact on employer-employee relations long after his administration ends.

As for the looming overtime rule, the federal judge in Texas may issue an injunction to prevent the new rule from taking effect before Trump takes office and allow the new administration to set the course for overtime exemptions under the Fair Labor Standards Act.  Unless that happens, employers must be prepared to comply with the new overtime rule effective December 1st.

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