On January 20, 2017, shortly after Donald Trump became the 45th President of the United States, his Chief of Staff, Reince Priebus, issued an Executive Memorandum mandating a 60-day freeze on published federal regulations that have yet to take effect to allow Trump's appointees time to review the regulations. Although such action is fairly standard during a change of administration, the impact could be significant if certain regulations set to take effect in 2017 are delayed or ultimately replaced. Regulations potentially affected by the 60-day freeze include the Department of Labor's ("DOL") overtime and fiduciary rules, and the Equal Employment Opportunity Commission's ("EEOC") EEO-1 pay reporting requirements.
DOL Overtime Rule
In May 2016, the DOL announced significant changes to the overtime rules under the Fair Labor Standards Act ("FLSA"). As we've previously blogged about here, the overtime rules mandated that, beginning December 1, 2016, the salary requirement for exempt employees would increase by nearly double - from $23,660 to $47,476 per year. Under these new rules, employees who earn less than $47,476 would no longer meet the overtime exemption from the FLSA, and would be entitled to overtime compensation for all hours worked over 40 in a workweek.
The new overtime rules made headlines late last year when a federal district court in Texas issued a preliminary injunction enjoining its implementation. The decision was issued on November 22, 2016, just days before the new rules were set to take effect.
Between the ongoing litigation over the legality of the overtime rules and the recent 60-day regulatory freeze, the future of the overtime rules remains uncertain. Other than publicly advocating a small-business exemption, Trump has remained non-committal about the overtime rules and has not signaled whether he will ask the Department of Justice ("DOJ") to drop its defense of the matter. Notably, the DOJ has sought a stay in the ligation while the new administration reconsiders its position. As a practical matter, this places employers in a difficult position. Many employers already implemented changes to comply with the new overtime rules in anticipation of the December 1, 2016 effective date, by increasing salaries, reducing workforces, cutting benefits, and changing employees' schedules. In addition, the language in the Executive Memorandum could also muddy the waters. The Executive Memorandum provides for postponing, for 60 days, published...