It’s no secret that President Obama’s use of executive orders to transform workplace laws was unprecedented. But perhaps even more unprecedented is how quickly those efforts have been derailed by the Trump administration. From NLRB appointments, to safety standards, to persuader-disclosure and joint-employment rules—to name a few—the White House has been systematically reversing workplace rules that President Obama implemented through executive orders, rather than through Congress.

Now, add two more hits to the list.

Obama-Era Overtime Rule Takes Final Hit.

The first hit was the final blow to President Obama’s  controversial overtime rule, which sought to expand the number of workers eligible for overtime compensation. In November 2016, a Texas federal district court preliminarily enjoined the rule just before it was due to take effect. The Department of Justice (DOJ) subsequently appealed that decision to the Fifth Circuit Court of Appeals.

On  August 31, 2017, with the Fifth Circuit appeal pending, the district court made its final determination that the rule was invalid. Specifically the court held, as it had opined in November, that the overtime rule exceeded the Department of Labor’s (DOL’s) rulemaking authority because it focused too heavily on employees’ salary levels—rather than the nature of their job duties—in determining overtime eligibility. The court found that this was contrary to the intent of the Fair Labor Standards Act and granted summary judgment to the plaintiffs.

On September 5, 2017, at the Direction of President Trump and Attorney General Sessions, the DOJ asked the Fifth Circuit to dismiss its appeal of the preliminary injunction. The Court granted the request on September 6 and dismissed the appeal, thus leaving the overtime rule all but permanently invalidated. As a result, the minimum salary for exempt status under the FLSA remains at $23,600.

So what’s next?

Technically, the DOL still has until September 30, 2017 to appeal the district court’s August 31 decision. An appeal is highly unlikely. What is more likely is that the DOL will go back to the drawing board to develop and issue a new revised overtime rule. Current Secretary of Labor Alex Acosta previously stated that he believes the salary threshold should be raised to $33,600 (substantially lower than the Obama overtime rule’s roughly $47,000 threshold), and in July 2017, the DOL issued a request for public comment on potential revisions to the Obama overtime rule. The deadline to submit comments is September 25, 2017, with a revised rule expected to issue thereafter. Employers should stay tuned for further updates.

Obama-Era Revisions to EEO-1 Form Abandoned

The second recent hit  to President Obama’s workplace-law overhaul is the White House’s announcement suspending the Obama administration’s changes to the EEO-1 form. The revised EEO-1 form would have gone into effect March 31, 2018, and would have required employers with 100 or more employees and federal contractors with 50 or more workers to report W-2 wage information and total hours worked for all employees by race, ethnicity and sex within 12 proposed pay bands. The Obama administration had claimed that rewriting the form would help identify and reduce workplace wage discrimination. Opponents argued, on the other hand, that the new form was overly burdensome and would do little to accomplish its stated purpose, primarily because the aggregated pay data required for the form would not have compared people in the same job positions or controlled for the many other non-discriminatory variables that impact compensation. The time for reporting was also problematic, since it did not match the calendar year periods utilized by most HRIS programs.

On August 29, 2017,  the White House Office of Management and Budget agreed with the opponents and stated that the pay collection and reporting requirements “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” The White House explained its reasoning in a letter to the Chair of the Equal Employment Opportunity Commission, Victoria Lipnic.

So what’s next?

As a result of the announcement, the EEOC must publish a notice in the Federal Register announcing the immediate stay of new compensation and hours worked reporting requirements contained in the revised EEO-1 form and “confirming that businesses may use the previously approved EEO-1 form in order to comply with their reporting obligations for FY 2017.” Additionally, employers will not need to submit 2017 data until March 31, 2018.

This decision is welcome news for employers who have been struggling with the practical and potentially expensive challenges of complying with the new EEO-1 Form, including how to merge systems and payroll data to accurately and efficiently collect and calculate the requisite information. Nevertheless, as we previously posted, pay equity is an increasingly scrutinized issue—with more and more states passing laws imposing pay transparency obligations and prohibiting salary history inquiries of applicants. As such, employers should continue to stay abreast of these changes and ensure that compensation determinations are adequately documented and made in compliance with applicable laws.

Are the changes to the overtime rules going to take effect or not? Ever since a federal court issued an injunction in late 2016 stopping major changes to the federal overtime rules, employers have anxiously been waiting for an answer to that question. Last week, the U.S. Department of Labor (DOL) turned the tables, and asked employers and others whether the overtime rules should change and, if so, how they should change. More specifically, the DOL published a formal Request for Information (RFI) in the Federal Register on July 26 acknowledging concerns about the previously proposed changes and asking the public for its help in formulating a new proposal.

The DOL’s RFI poses eleven specific questions and asks interested individuals and organizations to provide written answers to those questions within 60 days. The questions suggest that the DOL may be open to considering increasing the minimum salary level for exempt employees, but perhaps not increasing it as much as the DOL had proposed in 2016. The questions also suggest the DOL may revisit the idea of automatic increases to the minimum salary level and may explore other overtime rule changes.

Many commenters view the DOL’s action as a positive sign for employers, especially given certain business-friendly comments made by Secretary of Labor Alexander Acosta during his March 2017 confirmation hearing. At the very least, this is the first step in a process that will hopefully result in more balanced and reasonable changes to the overtime rules. We will certainly continue to monitor the issue.

BlockedIn a much-welcomed eleventh-hour ruling yesterday, the United States District Court in the Eastern Division of Texas issued a preliminary injunction enjoining the United States Department of Labor (“DOL”) from implementing changes to overtime rules under the Fair Labor Standards Act (“FLSA”) (the “Final Rule”). The Final Rule, which nearly doubles the salary threshold for the overtime exemption, was scheduled to take effect on December 1, 2016. The injunction blocks the Rule, for now. For more information on what the Final Rule would mean for you or your company, click here.

In his Memorandum Opinion and Order, Judge Mazzant found that the Final Rule’s salary increase has the effect of excluding from the exemption some 4.2 million workers who are performing exempt-type work, and that this exclusion conflicts with the FLSA.

The Court imposed the injunction nationwide, not just within its jurisdiction. Thus, the injunction blocks (or at least delays) the Final Rule for all employers.

This is not the end. The judge’s ruling is only temporary, and could be overturned later by the same court or a higher one (including the United States Supreme Court). What is certain, however, is that the Final Rule will not go into effect on December 1, 2016 as previously expected.

So what should employers do now?

If you have already changed your compensation structure to conform to the new rule, it might be unpopular to reverse those changes, although you may have the right to do so-at least temporarily. Conversely, if you were waiting until December 1 to make any changes, you may now wait until the courts (or Congress) render a final decision. It will definitely be worth watching to see what action the new administration takes with regard to defending or disowning the Final Rule, since the litigation is certainly not going to be completed before January 20, 2017.

With the clock counting down toward the December 1, 2016, effective date of the U.S. Department of Labor’s new overtime rules, officials from 21 states have stepped forward to try to stop the DOL in its tracks. In particular, on September 20, 2016, Texas Attorney General Ken Paxton, backed by 21 state officials from across the country, filed a lawsuit in federal court in Sherman, Texas, challenging the DOL’s rules. The lawsuit challenges the rules on several substantive and procedural grounds and seeks an injunction preventing the rules from taking effect. Secretary of Labor Thomas Perez expressed confidence that the rules will survive all legislative, judicial or other challenges. The same day, private sector groups, led by the U.S. Chamber of Commerce, filed a suit seeking the same relief in the same court.

It is clear that both sides of this battle will approach it with vigor, although it is not at all clear in whose favor the court will rule. As a result, employers who are making plans to comply with the rules as of December 1 should not abandon those plans just yet. We will follow the lawsuit closely, and we will be prepared to advise our clients as to any developments that may arise.