Department of Labor Moves to Overturn or Modify Several Obama-Era Rules and Guidance Statements


By: William H. Buechner, Jr.

The Department of Labor has taken steps to reverse or modify several controversial rules and guidance statements issued by the Obama administration. These developments are favorable to employers.

1. Labor Secretary Signals That DOL Will Pursue Modification Of 2016 Overtime Rule 

Secretary of Labor Alexander Acosta testified before a House Subcommittee last week and signaled potential changes to the 2016 final rule increasing the threshold salary level for white-collar overtime exemptions from $23,600 to $47,476. Acosta testified that the DOL intends to file a Request for Information within the next few weeks to seek information in connection with the 2016 final rule and the salary level.  Acosta testified that the manner in which the salary level of $47,476 was determined “created a shock to the system.” Acosta also stated that it is a “problem” when the salary level is not updated “because life gets a lot more expensive.” During his confirmation hearing in March, Acosta stated that the increase to $47,476 was excessive and indicated that he was open to a more modest salary increase “somewhere around $33,000.”

Based on these comments, it appears that the DOL may be contemplating  issuing a notice of proposed rulemaking that may propose a more modest adjustment in the salary level and perhaps removal of the automatic salary adjustment provision contained in the 2016 final rule.

In the meantime, in the litigation challenging the 2016 final rule, the Department of Justice’s appeal to the Fifth Circuit (filed by the Obama administration) challenging a Texas district court’s preliminary injunction blocking enforcement of the rule is in a holding pattern. Since President Trump took office, the DOJ has been granted three extensions of time to file a reply brief in support of the appeal, with the latest extension giving the DOJ until June 30, 2017 to file a reply brief.

2. DOL Withdraws Controversial Guidance Statements Concerning Joint Employers And Independent Contractors

The DOL issued a press release last week announcing the withdrawal of two controversial guidance statements issued during the Obama administration. First, the DOL rescinded its guidance regarding joint employers under the FLSA and the Migrant and Seasonal Agricultural Protection Act. In the guidance, the DOL took the position that “[t]he concept of joint employment, like employment generally, should be defined expansively under the FLSA and MSPA.” Second, the DOL rescinded its guidance regarding the classification of independent contractors as employees under the FLSA. The guidance stated that “most workers are employees under the FLSA’s broad definitions.”

These two guidance statements have been removed from the DOL website. The press release stated that the DOL “will continue to fully and fairly enforce all laws within its jurisdiction.” During his confirmation hearing in March, Secretary Acosta expressed his view that the “direct and immediate” control standard (which is considered the traditional standard) should be utilized in determining when an entity is an employer. Secretary Acosta also expressed his preference for issuing opinion letters as opposed to the guidance statements. Accordingly, it is possible that the DOL will further clarify its views on both the joint employer and independent contractor issues in opinion letters.

3. DOL Proposes To Rescind “Persuader” Rule

In addition, the DOL published in the June 12, 2017 Federal Register its proposal to rescind regulations that would have required employers to file public reports with the DOL when they use consultants, including lawyers, to provide labor law advice for the purpose of persuading employees in connection with union organizing and collective bargaining. This “persuader” rule would have required consultants to provide details as to the services and advice provided and the amount received. The “persuader” rule was enjoined by a Texas district court in November 2016. The purported purposes of the proposed rescinding of the “persuader” rule is to give the DOL an opportunity to further consider the effects of the rule on the regulated parties. Comments on the proposed rescinding of the “persuader” rule are due by August 11, 2017.

For questions, please contact Bill Buechner at