In a move that should surprise precisely no one who has been paying attention to current U.S. politics, GOP lawmakers in the U.S. House and Senate introduced legislation to block the U.S. DOL’s anticipated overtime exemption rules, just two days after the DOL sent the final rule to the Office of Management and Budget. OMB review is typically the final stage before publication of a new rule.
The legislation, dubbed the “Protecting Workplace Advancement and Opportunity Act,” would:
- Void the DOL’s new rules;
- Allow the DOL to publish updated rules only after conducting a detailed analysis of the rules’ impact on small business, non-profit and public employers;
- Bar the DOL from adopting rules that provide for automatic adjustments of the minimum salary level without going through a formal notice and comment rulemaking process;
- Require any proposed changes to the “duties” tests for the overtime exemptions to be published and subject to public notice and comment.
The legislation is largely symbolic, as the odds of the “PWAOA” becoming law are somewhere between slim and none so long as President Obama remains in office and is able to exercise his veto power. However, the bill closely parallels the arguments that are likely to be advanced in the court challenges that will undoubtedly follow once the final rules are published – i.e., that the DOL failed to adequately consider the economic impact of the new rules; that it lacks the authority to adopt a rule automatically increasing the minimum salary level; and that the DOL cannot make changes to the duties tests because it failed to include such changes in the proposed rules published last June.
Democrats Introduce Legislation to Curb Wage Theft
In what is likely an equally symbolic move, several Democratic lawmakers recently introduced the “Wage Theft Prevention and Wage Recovery Act,” which would increase potential liability and penalties available against employers for wage and hour violations. Specifically, the law would:
- Allow employees to sue under federal law not just for minimum wage and overtime, but also for all wages owed to them by their employer. (Currently, many states have wage payment laws on the books, but there is no such law at the federal level.)
- Require employers to provide written disclosures to employees regarding terms of employment and detailed pay stubs, with civil fines of $50 for first violations, and $100 for each subsequent violation.
- Require employers to issue final paychecks within 14 days after separation, or by the pay day for the pay period, whichever is earlier. Employers that fail to pay on time will be liable to the employee in the amount of the employee’s daily wage for each day that the employee’s final pay goes unpaid, up to a maximum of 30 days.
- Add a new civil penalty of $2,000 for violations of the FLSA, including the new wage payment requirements. Willful or repeated violations could result in civil penalties of up to $10,000. (Currently, the FLSA allows for civil penalties only in cases of willful or repeated violations, and sets the maximum at $1,100 per violation.)
- Increase liquidated damages available under the FLSA so that instead of merely doubling the amount due to employees, employers would have to pay triple the amount of any wages owed, plus interest assessed on the original amount.
- Employees subjected to retaliation for filing a complaint or cooperating in a DOL investigation would be entitled to recover quadruple the amount of wages owed, plus interest.
- Recordkeeping violations would subject an employer to civil penalties of $1,000 for a first violation, and $5,000 for each subsequent violation.
- Employees would be entitled to inspect their payroll records.
- If an employee violates the Act’s recordkeeping requirements, the employee would be allowed to present “reasonable evidence” to establish a rebuttable presumption that they worked unpaid hours, and the exact amount of wages due. The employer would be permitted to rebut the presumption only by “clear and convincing” evidence.
- The statute of limitations for FLSA violations would be increased from two years for non-willful violations and three years for willful violations to four and five years, respectively.
- The procedure for class actions under the FLSA would be switched from an “opt-in” procedure, in which plaintiffs must affirmatively join a lawsuit, to an “opt-out” procedure, in which they are considered part of the class unless they affirmatively elect not to be involved.
- The Department of Labor would be directed to refer certain serious violations to the U.S. Department of Justice for criminal prosecution.
Needless to say, the odds that this legislation will make any headway in the GOP-dominated House and Senate is exceedingly low.