President-elect Donald Trump has nominated Andrew Puzder to be the next Secretary of Labor. The U.S. Department of Labor (DOL) has jurisdiction over several agencies, the most significant being the Wage and Hour Division (WHD) and the Occupational Safety and Health Administration (OSHA).
Given Puzder’s background as the CEO of the parent company of Carl’s, Jr., Hardee’s, and Green Burrito as well as his early support for Trump during the presidential campaign, many suspect he will be counted on to favor management over labor; most expect his nomination will be confirmed by the Senate.
What does this mean for the American employer?
In the near term, it appears the recent temporary injunction issued by a Federal judge in Texas halting the implementation of changes to the Fair Labor Standards Act (FLSA) will survive with the new administration. The rule, which was scheduled to become effective on December 1, 2016, requires payment of overtime for all workers who earned less than $47,500 per year even if their job descriptions qualify them to be salaried workers.
In a Legal Alert published by Fisher Phillips, Puzder predicted the rule would “not deliver as promised.” Lori Armstrong Halber (a member of the firms Wage and Hour Law Practice Group) pointed to an op-ed in Forbes Magazine earlier this year that stated,
“Puzder said he did not believe it would be helpful to turn management positions into hourly jobs where employees are compensated for ‘time spent rather than time well spent’, which is a pretty good indication that he will want to scrap or substantially rework the rule once in charge.”
Also, in the near term at least, it seems unlikely that any significant changes will be made to the federal minimum wage, which is currently $7.25. Many news sources have reported that Puzder favors a federal minimum wage of $9, which would be higher than most states, but considerably less than the $15 threshold favored by some labor groups.
What will the future impact be?
Long-term impacts are more difficult to determine at this point. While Puzder’s positions generally favor management, it’s unclear what President-elect Trump’s influence on these matters might be. Employers should watch for the changes that may take place within the Office of Labor-Management Standards, which could play a vital role in unionized workplaces.
Given the change in administration, and with the Republicans in control of both the House and Senate, it is clear that it will not be “business as usual” at the DOL. Employers would be well-served to be aware of what may be profound changes in the years ahead. Only time will tell.
