USDOL Headquarters in DC
USDOL Headquarters in DC

Late Monday, several reports on Twitter indicated that the Department of Labor would be announcing and releasing the final version of the revisions to the white-collar overtime regulations.  You can see my prior posts on the subject here and here.

This has been a long time coming. It was way back in 2014 (!) that the President indicated that he wanted the USDOL to revisit them.

And the anticipation on Twitter has been breathless with so-called experts predicting for months that the new regulations would be released any day. Or last week.  Or in July.  And speculation on what would be in the final overtime rule has run rampant.

So, rather than predict what will be in the final regulations, I want to highlight three areas that I’ll be looking at in my initial review of the regulation.

  1. Salary Test: The proposed rule last year raised the salary test to $50,440 from its current level of $23,660 (which the vast majority of employees meet in Connecticut due to minimum wage being high.)  The latest thinking is that the final rule will set that threshold at $47,000.  (UPDATED: News reports on Tuesday afternoon indicated that the threshold will be set at $47,476 and be updated every three years.)  What does that mean? It means that any employee who is paid less than that amount regardless of his or her duties would need to be paid overtime for any work over 40 hours.  That would indeed be a big change.  So, when we look at the new rule, first item to look at is the salary threshold set by the USDOL.  There is no question it will be high; it’s just a question of how high.  Bonus item to look at: Will the salary test be tied to inflation? In other words – will the threshold keep up with inflation automatically in future years? The proposed version tied it to the 40 percentile of income; will that remain in the final rule?
  2. Duties Test: The proposed rule did not explicitly change the duties test for overtime — meaning that the administrative, professional and executive exemptions would still apply as current framed — albeit at a higher salary threshold.  However, the proposed rule solicited input from the public about how best to alter the duties part of the test.  Would the USDOL be so bold as to introduce changes to the duties test without first floating it in a proposed rule? The prevailing wisdom is no, but keep an eye on that and any hints about future revisions to this rule. (UPDATED: News reports on Tuesday suggest that no changes to the duties tests will be forthcoming.)
  3. Timing: Another thing to look for in the final rule: How much time will employers have to comply? And how long until the rules go into effect? Back in November 2015, a government official suggested that employers would have 60 days to comply. Will that hold up? (UPDATED: News reports on Tuesday also indicated that employers will have until December 1, 2016.) 

For employers in Connecticut, the new rules will make things particularly challenging. For years, Connecticut’s stricter overtime rules have been the go-to source for employers. However, with the new federal rules being even stricter (or, more favorable to the employee) than the state rule, we may see a return to federal dominance.  So a bonus thing to look for in Connecticut: How will these rules interact with Connecticut’s rule? Don’t just read the federal rule in isolation.

And to be clear, there are other aspects of this rule that we will undoubtedly have to look for.  But I’m not going to make predictions about a rule we haven’t seen.

I will make one overall prediction, however: Publications, blogs and people on Twitter are going to be hysterical over the pronouncements of the new rule. My suggestion? Ignore them.  The hype is designed, in part, on scaring employers into a frenzy.

What to do instead? Employers should view this new overtime rules with a bit of detachment.  Get the facts.  Then, figure out what applies to your business and start work on a plan to meet those requirements.

U.S. Department of Labor Headquarters
U.S. Department of Labor Headquarters

Over the last few days, Twitter has been a-twittering with buzz that the Department of Labor has sent the final overtime rules to the OMB.

This is the equivalent of one department sending another one an e-mail with the new rules. Why? Because it’s just the next step in getting the rules approved.  But nothing more than that. Moreover, this step always happens in the issuance of regulations.

And here’s the really important point: We still don’t know what these final rules will be.

So ask yourself, is it really worth getting excited about one department sending the rules to another?

That said, SHRM had some additional information from a speaker at a conference this week about when we can actually expect to see the new rules:

At the SHRM Employment Law & Legislative Conference yesterday, Tammy McCutchen, an attorney with Littler in Washington, D.C., and a former administrator of the DOL’s Wage and Hour Division, advised attendees to keep an eye on reginfo.gov, which tracks government agencies’ regulatory actions as they are submitted for review to OMB. Sure enough, the rule appeared on the site late March 14.

At the conference, McCutchen told attendees she believed the rule would work its way quickly through OMB and most likely be published by July 7, and take effect on Labor Day, Sept. 5. Alternatively, she said, the rule would be published the Friday before Labor Day, Sept. 2, to take effect Nov. 1—just prior to Election Day.

If you recall, I first reported on the timing of this back in November 2015.  In that post, I reported on what I heard at the ABA Labor & Employment Law conference — “late 2016”.

Despite all the Twitter posts this week: Things are still on target.

For employers in Connecticut, this is really wait-and-see territory.  First, we don’t know what the new overtime rules are going to be. And second, Connecticut has it’s own rules and we will need to analyze the interaction between existing state laws and these new federal overtime regulations.

Remember: Keep Calm & Carry On.

Suppose an employee files a complaint against your company and it’s quickly dealt with.  Now suppose, ten months later, that you, the employer, fire that employee  — ostensibly for financial reasons.  Is the timing between the original complaint and the termination enough to support a claim for retaliation?Courtesy Library of Congress, Flickr "office"

Previous federal court cases in Connecticut have concluded, in general, that the timing — standing alone — is not enough.  I discussed one such case here.   

But a new Second Circuit decision, released as a summary order yesterday, suggests a way around that limitation — at least in some distinct circumstances.

The case, Brenes v. City of New York, arises out of First Amendment retaliation claim brought by a New York school teacher who had gone to the New York Post months before his eventual termination.  The court suggests that an employer can be liable for retaliation if they waited to retaliate, so long as there was a reason why the employer may have delayed its action.

The Wait a Second blog fills us in on the rest of the details:

"A reasonable jury could infer from these facts that [the supervisor] expected that [employee]’s position would disappear in June, and that she therefore had no incentive to further retaliate against him until it became clear that he would be returning to [the school]. When considered in this light, [the employee]’s series of negative performance evaluations at the start of the next school year is suspicious and could plausibly support an inference of retaliation, particularly given that [the employee] previously received only satisfactory evaluations from prior supervisors and [his supervisor]."

This case allows retaliation plaintiffs to overcome the presumption that, without direct evidence of retaliatory intent ("You’re fired because you blew the whistle six months ago"), an adverse action needs to take place more than a few months after the protected activity. 

For employers, this case — while a rare example of the court finding a possible link of retaliation many months after the original complaint — demonstrates the importance of documentation and consistency in evaluations and discipline.  Retaliation cases are among the most difficult to defend and this new Second Circuit decision might give some employees another way to establish a retaliation claim that might not otherwise survive.