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The Impact of the Trump Administration on Wage-Hour Law
For the first time in over a decade, the United States has a Republican president and a Republican majority in the Senate and the House of Representatives.
The federal government has been operating at a stalemate over the past few years, unable to reach consensus on many issues of relating to worker protections. As a result, President Barack Obama has issued numerous executive orders and the U.S. Department of Labor has been aggressive, and some might add controversial, in their implementation of policy and in their method of enforcement. Now that there is a Republican president and a Republican-controlled Congress, there will most likely be major policy and enforcement shifts, according to John Sarno, president of the Employers Association of New jersey.
Sarno points out that fast food executive Andy Puzder is awaiting confirmation as the new Secretary of Labor but his hearing has been adjourned indefinitely. His own restaurant businesses were the subject of a wage-and-hour investigation in 2006 and 2007 and Mr Puzder publicly opposes the new white collar overtime rule that is presently stayed while its legality is litigated before the Fifth Circuit of Appeals.
Puzder, in post-nomination interviews, stated that he believes workers are overprotected and that it is time to undo the "extensive regulatory maze the President Obama administration has imposed on employers."
But with Puzder’s confirmation hearing stalled indefinitely and with the spotlight moving to a Supreme Court appointment, Sarno does not anticipate any shifts in policy at the DOL in the near term.
“The [labor] department will be rudderless for a while until a new person is nominated and I think that stalemate will go on for a long time due to sheer stubbornness. I get the feeling that Democratic resistance is taken personally by the new president,” he says.
For one thing, the new president has said he supports exempting small businesses from the new overtime rule.
Sarno believes that there will likely be a two-prolonged approach.
First, he says that the DOL is likely to take a different position before the court of appeals. “Rather than seeking a reversal of the stay, it is likely that the new solicitor [of labor] will argue that the trail court was correct, that the Department exceeded its authority when it produced the new rule.”
“But that 360 may hamper the ability to change rules going forward that exempt small business,” he adds.
Therefore, Sarno believes that Congress will be active legislating new laws that give the DOL wide rulemaking authority.
Also, in line with the new president and a growing number of members in Congress, Mr. Puzder had voiced his disagreement with having an established federal minimum wage, which dates back to 1940. In his view, the states alone should set minimum wages.
Although Puzder is still unconfirmed, “the new president has been on the record several times about giving the states exclusive authority over the minimum wage,” says Sarno.
Fresh from his historic landslide victory to a second term - 523 electoral votes to 8 - President Franklin D. Roosevelt pushed for the first national minimum wage during the Depression. The bill was highly controversial. It was debated in Congress, shelved and debated again. As the months passed FDR added a child labor amendment that he thought would finally push the bill over the top because of its popularity.
Roosevelt sent the bill to Congress and called it to special session to consider it. With a message that America should be able to give "all our able-bodied working men and women a fair day's pay for a fair day's work" he also chided the Congress, stating that “a self-supporting and self-respecting democracy can plead no justification for the existence of child labor, no economic reason for chiseling worker's wages or stretching workers' hours." Congress passed the bill, called the Fair Labor Standards Act, in the special session.
“Those were dramatic times and our own time could be as dramatic. I think everything will be on the table, including elminating the federal minimum wage,” says Sarno.
But to make that kind of paradigm shift happen, you need strong leadership. “Right now, there is no leadership. It will be drift at the DOL. But that may not be a bad thing for business and industry because drift is better than enforcement penalties,” he says.