Return of the Opinion Letters
Months after it announced it was bringing back opinion letters, the Department of Labor reissued 17 letters that were originally written in the final days of the George W. Bush administration.
The letters cover a variety of circumstances, from the narrowly defined, such as civilian helicopter pilots who work for the state police, to more broad, including how to handle salary deductions for exempt employees for time missed.
“This is like pressing the restart button from when the Obama administration took over,” says Kyle Ferachi, the managing member of McGlinchey Stafford’s Houston office. While he notes that the letters, reissued verbatim from 2009, are “nothing new,” he adds that the reissuance signals the Trump administration “is going back to a more employer-friendly, business-friendly attitude.”
In June, Secretary of Labor Alexander Acosta announced the department would reinstate opinion letters. Bryan L. Jarrett, the acting administrator of the DOL’s Wage and Hour Division, signed the reissued letters, which were dated Jan. 5. Experts wondered whether the division would wait to issue new letters until a permanent administrator is seated; the DOL did not answer a request for comment.
Not only did the Obama administration rescind the Bush letters soon after taking office in 2009, but its DOL shifted away from issuing specific letters in favor of more general guidance. Opinion letters have been used by both administrations from both parties for 70 years. The letters themselves are pretty scarce; the department averaged about 32 a year from 2004 to 2009.
“Reinstating opinion letters will benefit employees and employers, as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” Acosta said in a statement.
(Acosta was the last of the current administration’s cabinet members to be approved, more than three months after Trump took office in late January 2017.)
Daniel Pasternak, a partner with Squire Patton Boggs, agreed with Acosta’s statement. “In a broader sense, the Department of Labor is engaged again. That’s good for business and good for employees.” While the letters aren’t legal rulings, courts would consider them in a case, the lawyer adds.
He did caution companies from making requests about existing conditions because a letter could be used against employers depending on the ruling. He suggests the best way for a company to make a request is to seek guidance when considering a change in policy. Learning whether a new overtime system is legal before implementation would help HR officials avoid trouble, he adds.
“I like the letters,” Ferachi says. “They tell me how an administration may deal with a particular problem my client might face.”
While the reissued letters were greeted with mostly a yawn from labor lawyers, University of Illinois law professor Michael LeRoy said the action was significant for what it was not, an attempt to “blow apart the regulatory framework that’s been an accepted paradigm.” Referencing Trump’s earlier claim that he would eliminate two regulations for every new regulation, LeRoy says, “That would be catastrophic in the realm of wage-and-hour administration. Nobody wants uncertainty.”
LeRoy and others mused about how important these issues were for the Trump administration. “The administration hasn’t made a priority of wage-and-hour regulations as it has with allowing coal to be mined everywhere,” he adds.
Pasternak notes that the changes made in December from the National Labor Relations Board were much more significant that the reissued letters. The new board members overturned five union-friendly rules that had been created or bolstered during the Obama administration.
One upcoming key issue for the wage-and-hour division is how to handle overtime for employees who may be classified as exempt. Obama’s administration created a new rule that attempted to raise the minimum salary requirement for such individuals to $47,000, nearly double its current level of $23,660. It would have allowed a much broader range of workers, such as fast food-restaurant managers, to collect overtime. A federal judge overturned that ruling last year.
Pasternak says it’s likely the original salary level will need to be increased. The current salary level is about $11.38 per hour, lower than the minimum wage in some areas. “At some point, it’s a tough sell to deny OT based on that salary,” he adds.
A variety of other issues are covered in the 17 reissued letters, including whether salary deductions are permissible for exempt employees, year-end non-discretionary bonuses and whether “on-call” hours for ambulance personnel constitute hours worked.
The department lays out how to request a new opinion letter on its website.