Obama-Era Employment Initiatives Continue To Come Under Attack

Client Alerts · September 8, 2017

Last week, two important employment initiatives by the Obama administration hit roadblocks from the courts and the Trump administration.  First, on Wednesday, August 30, the White House Office of Management and Budget (OMB) put on hold (temporarily, for now) the Equal Employment Opportunity Commission (EEOC)’s expanded pay data collection requirements, which would have required employers to provide extensive data on their pay practices.  On Thursday, August 31, a Texas federal judge struck down the Obama administration’s highly publicized expansion of overtime protections.  Both of these initiatives had been lauded by labor and certain advocacy groups, while employers and industry groups were generally skeptical about the burdens these policies placed on employers.

The EEOC’s pay data collection rule would have required all businesses with 100 or more workers to submit pay data by gender, race, and ethnicity on their employer information report, known as EEO-1.  The first deadline for the new pay data report was set for March 31, 2018.  The stated purpose of this EEOC initiative was to collect information that would assist employers and the EEOC in addressing instances and patterns of pay discrimination.  It seems likely that the OMB’s review will result in some substantial change to the rule as part of the Trump administration’s effort to reduce regulations on American business.

Under the Obama administration’s new overtime rule, originally scheduled to go into effect on December 1, 2016, the minimum salary for most exemptions would have doubled.  The rule more than doubled the threshold amount that white-collar employees had to earn to qualify for an exemption from overtime, from $455 per week or $23,660 per year to $913 per week or $47,476 per year.  The salary threshold requirement for the highly compensated employee also increased, from an annual salary minimum of $100,000 to $134,004.  In November 2016, the Texas court issued a nationwide injunction, preventing the Department of Labor’s new rule from going into effect.  Now, that same court has taken the next step and invalidated the rule, finding that the agency had improperly focused on the salary level of employees instead of their job duties (as intended by Congress).  Most predictions are that this incarnation of the overtime rule is now dead, at least for the remainder of the Trump administration.

If you have any questions about the information presented here, need assistance updating agreements or policies, or have any other employment law concerns, please contact Daniel S. Tarlow, the chair of the firm’s Employment Law Practice Group, at 617.456.8013 or dtarlow@princelobel.com, or Laurie Rubin, at 617.456.8020 or lrubin@princelobel.com.