Menu Wessels Sherman Joerg Liszka Laverty Seneczko P.C.
Protecting Employers for Over 30 Years
Office Location
St. Charles, IL Chicago, IL Office Davenport, IA Office Minneapolis, MN Office Milwaukee, WI Office
St. Charles, IL Chicago, IL Office Davenport, IA Office Minneapolis, MN Office Milwaukee, WI Office
St. Charles, IL Chicago, IL Office Davenport, IA Office Minneapolis, MN Office Milwaukee, WI Office

The Department of Labor Begins its Pro Business Agenda with its Requests for Information on the Overtime Rule

The DOL has started to implement its pro-business policies, which should create a better environment for businesses. Although it took the DOL some time to hit its stride, we are now seeing some key policies being implemented.

On Wednesday, July 26, 2017, the DOL Wage and Hour division ("WHD") issued a request for information ("RFI") regarding the overtime regulations that were finalized in 2016. The WHD is once again seeking comments from the public on the appropriate salary level for the executive, administrative and professional exempt employees under the Fair Labor Standards Act ("FLSA").

In 2016, under the Obama administration, the Department of Labor ("DOL") substantially increased the salary level test for the executive, administrative and professional exemptions from $23,660 per year to $47,476 per year. A U.S. district court issued a nationwide injunction preventing the DOL from enforcing the new salary level, which was supposed to go into effect on December 1, 2016. The injunction is currently being appealed, halting the increase to the salary test that the previous administration had implemented. In its reply motion, the DOL did not simply abandon the previous DOL's argument on whether or not the DOL actually has the authority to increase the salary portion of the test. Instead, the New DOL continued the argument that the DOL does have authority to change the salary basis test.

Now, the DOL intends to engage in further rulemaking on what the appropriate salary level should be. This could be a victory for companies who were opposed to the substantial increase that the previous administration issued and it appears at this point, the DOL will increase the salary level portion from the current $23,660, but simply won't be a substantial increase. But again, does the DOL even have the authority to increase the salary test?

The DOL specifically requested input to a set of eleven (11) comprehensive questions dealing with the changes in the amount of the salary level test from $455 per week, which was established in 2004. The DOL has allowed for a comment period of sixty (60) days. Therefore, the comment period ends September 25, 2017.

The DOL is reviewing the impact of the 2016 final rule change to the overtime regulations. The RFI indicates an intent to lower the substantial increase to the salary level that was proposed in 2016 back to a salary of $455 per week or to set a different salary level that will work in conjunction with the duties test to identify employees eligible for these exemptions.

DOL Opinion Letters are also back in play. DOL opinion letters are key tools that businesses can use, in order to determine whether or not its pay practice is legal. Typically, the business reviews its pay practice with an attorney and they jointly draft a letter to be sent to the DOL. The DOL will then issue an opinion letter as to whether or not the pay practice is legal. This is key, because under the Portal-to-Portal Act, an employer can use DOL opinion letters to have a "good faith" defense that eliminates the liquidate damage portion, if a violation is found later. The business essentially states that "we had good reason to use this pay method, because we listened to the DOL". The previous administration eliminated this policy, so businesses were left in the dark as to determine whether or not their certain pay structure were legal or not. Again, any business who wants to have a DOL letter should discuss it with an attorney first and jointly draft the letter to ensure that the pay method is legal, otherwise, the DOL opinion letter may deny that the pay method is legal.

Joint Employer/Independent Contractor. The DOL also withdrew its guidance on joint employment and independent contractors. The withdrawal of the joint employment relationship is a welcome change for many in the business community, as the business community continues to be inundated with joint employer claims by plaintiffs. Also, the guidance on the joint employer came shortly after the National Labor Relations Board issued an opinion that businesses and its contractors can be considered one employer. The Independent Contractor guidance is also a good change; however, case law has well established what business need to follow, in order to determine if an individual is an employee or independent contractor. As provided by our colleague, Nancy Joerg, in a recent article "U.S. Department of Labor Withdraws Obama-Era Guidance on Independent Contractor and Joint Employment Status", businesses must properly set up the relationship and abide by the factors that are used by courts. Now this does not mean that the DOL will stop enforcing the Independent Contractor relationship, but I would suspect that the New DOL will make a push toward compliance compared to enforcement.

The DOL has also discussed changing the "tip-pooling" rules and re-implementing a previous DOL policy where employees who make more than 50,000 won't be investigated as to being misclassified. Businesses should be prepared for less regulations and more business oriented policies in the coming years.

Questions? Contact Attorney Sean Darke in our Chicago office at (312) 629-9300 or by email at sedarke@wesselssherman.com or Attorney Joe Laverty in our Davenport office at (563) 333-9102 or by email at jolaverty@wesselssherman.com.

No Comments

Leave a comment
Comment Information

Office Locations

140 S. Dearborn Street
Suite 404
Chicago, IL 60603

Phone: 312-629-9300
Map & Directions
Chicago, IL Office

9800 Shelard Parkway
Suite 310
Minneapolis, MN 55441

Phone: 952-746-1700
Map & Directions
Minneapolis, MN Office

1860 Executive Drive
Suite E-1
Oconomowoc, WI 53066

Phone: 262-560-9696
Map & Directions
Milwaukee, WI Office

101 West Second Street
Suite 307
Davenport, IA 52801

Phone: 563-333-9102
Map & Directions
Davenport, IA Office

Dunham Center
2035 Foxfield Road
St. Charles, IL 60174

Phone: 630-377-1554
Map & Directions
St. Charles, IL Office

Wessels Sherman Joerg Liszka Laverty Seneczko P.C.

Privacy Policy | Business Development Solutions by FindLaw, a Thomson Reuters business.