Wyatt Employment Law Report


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Department of Labor – Fiduciary Rule Delay

By Sherry Porter

The U.S. Department of Labor’s (DOL) new fiduciary rule has been in the news for several years.  A portion of the rule relating to impartial conduct standards for employee benefit plans recently went into effect on June  10, 2017.  The remaining standards of the rule will become effective January 1, 2018.  The rule, which is essentially a consumer protection rule, has been quite controversial in that it imposes fiduciary status on many advisors who provide investment advice to retirement plans, IRAs and HSAs who had not been previously considered fiduciaries.  Many advisors have been working diligently to comply with the new DOL fiduciary rule – some investing significant hours and funds to comply.

Last week, the DOL filed a Notice of Administrative Action in a court case stating that it had submitted proposed amendments pertaining to the fiduciary rule to the Office of Management and Budget.  While they are currently in proposed state, the amendments propose to delay the applicability date from January 1, 2018 to January 1, 2019.  The proposed amendments have not yet been publicly released.  Stay tuned for more details, as it is likely the fiduciary rule will be pushed back.


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President Trump Proposes Significant Cuts to DOL

By Courtney Samford

President Trump released his proposed budget for fiscal year 2018 earlier this month.  The proposal, which is entitled “America First: A Budget Blueprint to Make America Great Again,” purports to “put[] the needs of its own people first” by prioritizing national security and public safety.   To account for increases in these areas, the budget acknowledges that many “Government agencies and departments will …. experience cuts …. to achieve greater efficiency and to eliminate wasteful spending[.]”

The Department of Labor (“DOL”) is no exception to President Trump’s proposed cuts.  The America First Budget requests a total of $9.6 billion for the DOL, which equates to a 21 percent decrease from fiscal year 2017.  In particular, the budget seeks to Continue reading


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Persuader Rule Update

By George J. Miller

On July 12th I posted a report on this blog about the U.S. Department of Labor’s “persuader rule” that was set to go into effect on July 1st. This rule would have required employers and their labor consultants—including employers’ attorneys—to file reports with the DOL disclosing in a public record the work the consultants performed, including fees paid, if the work even so much as “indirectly” is undertaken to persuade employees regarding the exercise of their rights to organize or join labor unions. At that time I reported that on June 27th the U.S. District Court for the Northern District of Texas at Lubbock had issued a preliminary nationwide injunction against the DOL, prohibiting it from enforcing the persuader rule, pending a final decision on the merits of the case.  Independent Federation of Business, et al. v. Thomas E. Perez, et al, Case No. 5:16-CV-00016 (N.D. Texas, June 27, 2016).

To bring readers up to date, on August 29th, the DOL appealed the District Court’s injunction order to the U.S. Court of Appeals for the Fifth Circuit, where the case is still pending.  However, this appeal did not divest the District Court of jurisdiction, and the case proceeded there.  Yesterday, November 16th, the court granted the plaintiffs’ summary judgment motion and denied the DOL’s summary judgment motion.  The court said it is of the opinion that its preliminary injunction should be converted to a permanent, nationwide injunction.  However, the court did not enter final judgment today, stating that it first wanted to determine whether the plaintiffs are entitled to recover their attorney fees and costs.  The court has ordered the parties to file briefs on that issue in the next few weeks.

 

 


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House Passes Bill to Delay Overtime Rule

By Michelle High

On Wednesday, September 28, 2016, the U.S. House of Representatives voted 246-177 to delay the implementation of the Department of Labor’s new rule which raises the salary level for exemption from overtime pay from an existing threshold of $455 per week to $913 per week. The new rule is currently scheduled to go into effect on December 1, 2016.  Numerous business groups, including the U.S. Chamber of Commerce, have filed a lawsuit against the U.S. Department of Labor opposing the significant increase.  In addition, a lawsuit challenging the new rule has been filed against the U.S. Department of Labor by twenty-one (21) states.

House Resolution 6094, introduced by Republican representative Tim Walberg, seeks to delay implementation of the U.S. Department of Labor’s Overtime Rule for an additional six (6) months.  According to statements made by Walberg, he and others agree that the country’s overtime rules need to be updated.  However, he believes that lawmakers need to Continue reading


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21 States (Including Kentucky) and Several Businesses File Lawsuits Challenging DOL Final Rule Raising Salary for Exempt Workers

By Sharon L. Gold

money-roll-694667smallThis week, Kentucky, alongside 20 other states, sued the Department of Labor in a Texas Federal Court.  The states’ Complaint, 4:16-cv-00731, attacks the DOL’s Final Rule that raises the salary minimum for exempt workers.  That same day, numerous businesses and the Chamber of Commerce filed a similar Complaint, 4:16-cv-732, challenging the regulation.

The states contend that the Final Rule infringes upon state sovereignty and federalism by dictating the wages that a state must pay its employees.  The states contend that “as a result of the new overtime rules and the accompanying damage to state budgets, states will be forced to eliminate or alter employment relationships and cut or reduce services and programs.  Left unchecked, DOL’s salary basis test and compensation levels will wreck state budgets.”  States’ Complaint at 84.  As to Kentucky, the Complaint alleges that Continue reading


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Are Your FLSA and EPPA Posters Up to Date?

By Courtney Ross Samford

The Department of Labor recently announced revisions to the Fair Labor Standards Act (FLSA) and Employee Polygraph Protection Act (EPPA) posters that must be posted in workplaces across the country.  The updated posters, which are available for download on the DOL’s website, must be posted by August 1, 2016.

All private, federal, state and local government employers employing at least one employee are subject to the requirements of the FLSA.  The EPPA applies to any employer engaged in or affecting commerce or in the production of goods for commerce, but excludes federal, state and local governments, and circumstances covered by the national defense and security exemption.


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Effective Date of Persuader Rule Affects Employers’ Decisions to Retain Advisors

By Mitzi D. Wyrick

The United States Department of Labor’s (“DOL”) “persuader rule,” which requires employers and their advisors (including employers’ attorneys) to disclose publicly any advice that directly or indirectly persuades employees regarding union organizing or collective bargaining activity, took effect on April 25, 2016.  Litigation is pending to enjoin the enforcement of the rule because the broad sweep of the persuader rule now requires public reporting of what had been previously exempted services that are often provided by labor lawyers and consultants to their clients in confidence.  Examples of such activities include providing material or communications to employers for dissemination to employees; conducting union avoidance training; and developing personnel policies or practices that are intended to influence or persuade employees regarding their rights to engage in union organizing activities or other activity protected by the National Labor Relations Act.

It is important to note that the persuader rule applies only to persuader arrangements and agreements made on or after July 1, 2016.  In one of the pending cases to enjoin the enforcement of the persuader rule, the DOL filed a status report taking the position that advice given pursuant to Continue reading