The president-elect’s nomination of Andy Puzder for secretary of labor may very well be the final nail in the coffin for the new overtime rules.
Puzder, CEO of CKE Restaurants, has been an outspoken critic of President Barack Obama’s employment initiatives for years. Several of those efforts, especially the overtime rules, are dead given Puzder’s appointment, says John Husband, a partner at Holland & Hart LLP and an editor of Colorado Employment Law Letter.
The overtime regulations, which would have required employers to pay overtime to all employees earning less than $913 per week ($47,476 annually), were scheduled to take effect December 1. With just days to spare, a federal district court judge issued a temporary injunction halting the rules’ implementation. The U.S. Department of Labor (DOL) appealed the injunction order to the U.S. 5th Circuit Court of Appeals, which agreed to fast-track its review. Still, the expedited schedule puts final briefings after the inauguration.
Once Donald Trump takes office, the DOL probably will withdraw its appeal before the court makes a decision. His choosing Puzder for secretary of labor makes that even more likely, Husband said.
H. Juanita Beecher, of counsel with Fortney & Scott and a contributor to Federal Employment Law Insider, said the rules were dead either way. “There was a lot of unhappiness among Republicans anyway,” she stated. If anything, the nomination just emphasizes that unhappiness, she said.
Puzder has criticized the overtime rules since President Obama directed the DOL to draft them in 2014. And as recently as May, he said in an op-ed for Forbes that the rules wouldn’t benefit workers as the DOL had claimed. In the real world, he wrote, employers will just make changes to offset the cost of compliance. “This means reduced opportunities, bonuses, benefits, perks and promotions,” he said.
In various op-eds and blog posts, Puzder also has been an outspoken supporter of automation in business (such as ordering at restaurants) and immigration reform. And he has been critical of the National Labor Relations Board’s (NLRB) recent efforts to create “joint employer” relationships between companies and their franchises.
Representative Virginia Foxx (R-North Carolina), the incoming chair of the House Committee on Education and the Workforce, called Puzder a terrific choice. He will help the country recover from “years of extreme regulations and sluggish economic growth,” she said in a statement.
Employee advocacy organizations had a different take. “It’s hard to think of anyone less suited for the job of lifting up America’s forgotten workers—as Trump had campaigned on—than Puzder,” said Christine L. Owens, executive director of the National Employment Law Project. “Puzder will be there for his low-wage-industry CEO buddies, who are now salivating over the prospect of rolling back the Obama administration’s efforts to raise pay for low-wage workers, improve workplace safety, and increase corporate accountability for wage theft and other violations.”
Confirmation hearings can begin before Trump is sworn in, but nominees can’t be confirmed until after the inauguration. For example, a hearing on Senator Jeff Sessions (R-Alabama), whom Trump nominated for attorney general, is scheduled for January 10 and 11, according to the Senate Judiciary Committee.
Puzder’s hearing has not been scheduled, but Beecher said he likely would be part of a second round of confirmations. For example, Trump probably will prioritize the U.S. Department of State and the U.S. Department of Defense, she said.
Puzder’s confirmation could be delayed if he proves controversial, Beecher said. “I don’t think it’s going to take too long,” she added. Republicans have a majority, and in the end, the votes are probably there, she said. She estimated that Puzder could be installed in February.
If Puzder is confirmed, Husband says there’s a good chance the DOL will try to overhaul wage and hour laws. Those laws are outdated and don’t reflect the current state of business in the United States, Husband added.
Beecher said Puzder’s opinions on immigration could mean an increase in nonimmigrant visas, for which the DOL has authority. He has very strong opinions on immigration and has raised eyebrows among conservatives, Beecher said, adding that the topic will likely come up during his confirmation hearing.
Regardless of whether Puzder is confirmed quickly (or at all), Trump has promised to rescind various Obama Executive Orders on his first day in office. It may not happen quite that quickly, Beecher said, “but by the first of February, we’ll have a pretty good idea which will stand.”
Need to learn more? Listen to the on-demand webinar The Trump Presidency: What Will Survive—and What Won’t—from the Obama Regulatory Agenda. A number of regulations are scheduled to go into effect in the next couple of months, so it’s very important for employers to know what they should expect to be enforced under President Trump. During this in-depth webinar, featuring a live Q&A, Beecher and David Fortney, also of Fortney & Scott, will explain how employers can manage their regulatory requirements amid the transfer of presidential power. For more information, click here.