When President Trump was elected in November 2016, the U.S. Department of Labor (DOL) was fighting multiple legal battles over rules it had promulgated during President Obamas term in office. With President Trumps election, the DOLs commitment to moving forward with those rules is uncertain. We expect to know more if and when Alexander Acosta, the nominee for Secretary of Labor, is confirmed, but here is where the DOL lawsuits and related rules stand:
- FLSA Overtime Rule Last year, the DOL issued a Fair Labor Standards Act (FLSA) rule to increase the minimum weekly salary threshold for the FLSA white collar overtime exemptions from $23,660/year to $47,476/year. The rule was set to become effective December 1, 2016, but, before that date, a federal judge in Texas enjoined the rule. The DOL filed an expedited appeal before President Trump took office. After Trump took office, the DOL filed a request for a briefing extension in its appeal, citing the need to assess the impact of the new Presidential administration on the appeal. The Fifth Circuit granted the DOLs request and its brief is due on May 1, 2017. The DOLs filing signals the possibility that the DOL may abandon or seek to modify its FLSA overtime rule.
- Persuader Rule The DOL also passed the persuader rule last year. This rule would require companies and their consultants (including law firms) to disclose amounts spent on efforts to persuade employees not to unionize. In November 2016, a federal judge in Texas enjoined the rule, and the DOL appealed before President Trump took office. The DOL has not yet taken any action on its appeal since President Trump took office.
- The ACA (aka Obamacare): President Trump issued an executive order on his first day in office related to the ACA. The order doesn't change any legal requirements, but it does require that federal agencies use their discretionary authority to waive or defer requirements that impose a fiscal burden on individuals, states, providers, insurers, purchasers of health insurance, and the like. Interestingly, employers are not specifically mentioned in the order as needing a waiver from fiscal burdens, but many employers fall into the category of purchasers of health insurance. Following the order, the IRS has used its discretionary authority to announce that it will accept individual tax returns even if they dont include information about health insurance coverage. Importantly, employers should remember that, for the time being at least, the ACAs individual and employer coverage mandates are still in effect. As such, GPM is advising employers with 50 or more employees to continue complying with the employer mandate, including the obligation to file Form 1095-C.
- Health-Insurance-Related Proposals: So far in President Trumps first 100 days, there have been a number of proposals for ACA replacements. House Republicans are suggesting increases to the amount that can be contributed to a Health Savings Account (HSA), substituting a per-person tax credit for the need-based subsidies on the exchanges, capping the amount of employer-sponsored health coverage that can be excluded from income (a Cadillac tax by another name?), gradually eliminating the Medicaid expansion under Obamacare, and turning Medicaid into per-person or block grants to the States. Stay tuned these ideas are just proposals at this time.
- Fiduciary Rule: The DOLs fiduciary rule would require all financial professionals who work with retirement plans or provide retirement planning advice to act in a fiduciary role when advising such plans, regardless of whether they are being paid for such advice. On February 8, 2017, a federal judge in Texas upheld the legality of the rule and denied a request for the rule to be enjoined. No appeals have been filed, but President Trump has asked the DOL to delay implementation of the rule to allow time for further analysis of its practical effects. The rule was set to be effective in April 2017, but is now expected to be delayed until at least October 2017. Most commentators anticipate that the rule will be withdrawn, although that process would take some time. So, again, stay tuned.
Megan Anderson is an MSBA-certified employment and labor law specialist and proactively partners with businesses, non-profit organizations, and higher education institutions to ensure employment law compliance and prevent ...
The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.