Wage and Hour Division 2016 Update

In 2016, two anticipated United States Labor Department’s Wage and Hour Division (“WHD”) actions will significantly impact employers.  This year, the WHD will likely publish the final rule on changes to white-collar exemptions earlier than previously expected and issue guidance regarding employee usage of electronic devices outside of work.  This article discusses the WHD’s anticipated 2016 actions and their effects on employers.

A.        Final Rule on Changes to White-Collar Exemptions Likely Will Issue This Spring.

In November 2015, Campbell Litigation reported on the proposed changes to the White-Collar Exemptions (see related article).  At that time, the Department of Labor (“DOL”) anticipated issuing the final rule in July 2016.  While the DOL’s regulatory agenda continues to mark July 2016 as the anticipated time period for the final rule, DOL Secretary Thomas Perez recently indicated that the WHD is targeting Spring 2016 to publish the final rule to ensure the rule is in place before the end of President Obama’s term.[1] 

The Congressional Review Act allows Congress sixty (60) “legislative days” to review “major” published rules.[2]  A Republican-controlled Congress would likely pass a resolution to block the implementation of the regulation, but the President can veto Congress’ resolution, resulting in the rule’s implementation.[3]  If the WHD publishes the final rule this Spring, it is likely that any Congressional resolution would be vetoed by President Obama.  However, if the WHD does not publish the final rule until July 2016, the Republican-controlled Congress may use its power to set the Congressional schedule to ensure the sixty (60) legislative day review period extends into 2017, allowing the newly elected President to review any Congressional resolution.[4]  If a Republican is elected President in 2016, it is likely he or she would sign the resolution, which would effectively block the proposed changes to the white-collar exemptions.  Accordingly, the WHD is pushing to have the final rule published by March or April 2016. 

Given this timing, employers should take steps to adjust once the regulations take place.  For example, employers should determine the employees who may be affected by the WHD’s change and develop a proposed plan on how the company will handle individuals and/or classes of employees.  For non-exempt employees, employers must decide how they will track employee hours; manage overtime; develop policies for employees to seek prior approval to work overtime; and determine how employees will be disciplined for violating such a policy.

B.        WHD Likely to Issue Guidance on Employee Usage of Electronic Devices.

The WHD will also likely issue guidance this year regarding how employees should be compensated for using their electronic devices to perform work outside of regular work hours.[5]  The WHD anticipates issuing a request for information in February 2016 regarding the time employees spend using their electronic devices, most notably smart phones, while working outside regular hours.  The request for information springs from the proposed changes to the white-collar exemptions, which will result in millions of employees losing their exempt status and having to keep track of their hours worked.[6]  Many employees use their smart phones for work related purposes, such as checking their email and responding to messages.  Often, these tasks take only a few minutes and are often mixed with performing non-work related tasks.  As a result, this time is difficult for employers and employees alike to capture. 

It is expected that the WHD will issue guidance requiring employers to compensate non-exempt employees for work on electronic devices outside regular hours.[7]  Accordingly, employers should be aware of the anticipated guidance and begin to develop strategies to ensure they capture non-exempt employee time spent performing work on electronic devices outside regular work hours.  For example, employers should analyze their non-exempt (or soon to be non-exempt) employees’ current practices, and develop or alter policies regarding how and when employees use electronic devices to perform work outside regular work hours.  For employees in jobs that do not require immediate responses, employers may consider drafting policies that prohibit them from using their electronic devices for any work outside of the eight-hour work day, without first seeking written employer approval.

C.        Conclusion

The WHD will likely issue its final rule on the proposed changes to the white-collar exemptions this Spring, and it is also anticipated to issue guidance on employee usage of electronic devices.  The WHD’s actions will greatly impact employers, and Campbell Litigation will continue to track these actions and report back when further updates are available.

 

[1] Ben Penn, WHD on ‘Fair Day’s Pay’ Mission Via Overtime Rule, Enforcement in 2016, Bloomberg BNA Daily Labor Report 2016 Labor Outlook, S-10 (Jan. 25, 2016).

[2] Chris Opfer, Trade, Overtime Showdown on Deck, as Lawmakers Look to Slow Election Season, Bloomberg BNA Daily Labor Report 2016 Labor Outlook, S-34 (Jan. 25, 2016).

[3] Id. at S-35. 

[4] Id.

[5] Penn, supra note 1, at S-12. 

[6] Id.

[7] Id.

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