Tag: DOL

  • DOL Files Appeal in Overtime Legal Challenge

    DOL Files Appeal in Overtime Legal Challenge

    by CUPA-HR | March 12, 2025

    On February 28, the Department of Labor (DOL) filed an appeal in Flint Avenue, LLC v. U.S. Department of Labor, which previously led a district court to strike down the agency’s overtime final rule set forth under the Biden administration. The action is the second pending appeal from DOL with respect to cases involving the Biden administration’s overtime rule and may be acting as a placeholder to provide time for the Trump administration to determine how they want to move forward with the Biden administration’s overtime rule.

    Background

    As a reminder, the Biden administration’s final rule implemented a phase-in approach to increasing the minimum salary threshold under the Fair Labor Standards Act (FLSA) overtime regulations. Specifically, the rule increased the minimum salary threshold, effective July 1, 2024, from the previous level of $684 per week ($35,568 per year) to a new level at $844 per week ($43,888 per year). This first increase used the same methodology set by the first Trump administration’s 2019 overtime rule to determine the new salary threshold level. The rule also aimed to increase the threshold a second time effective January 1, 2025; however, the Biden overtime rule was struck down in federal court before the second increase could take effect. This increase would have changed the minimum salary threshold again to $1,128 per week ($58,656 per year). Finally, the rule adopted automatic updates to the minimum salary threshold that would occur every three years.

    Shortly after the Biden overtime rule was published, lawsuits were filed challenging the final rule. These lawsuits resulted in two district court orders to vacate the final rule. On November 15, 2024, a federal judge in the Eastern District Court of Texas ruled to vacate the Biden administration’s FLSA overtime final rule in State of Texas v. U.S. Department of Labor. Similarly, on December 30, 2024, another federal judge in the Northern District Court of Texas ruled to vacate the Biden administration’s overtime rule in Flint Avenue, LLC. Both rulings vacated all components of the rule, meaning both the July and January salary thresholds set under the final rule were no longer in effect and automatic updates to the minimum salary threshold would not take place.

    DOL’s Appeals

    Soon after the federal judge ruled in the State of Texas case, the Biden administration’s DOL filed an appeal. The appeal was filed in the 5th U.S. Circuit Court of Appeals, where it remained through the presidential transition. On February 24, the Department of Labor under the Trump administration requested an extension to file its opening brief in the State of Texas appeal. The 5th Circuit Court agreed to the extension, allowing for opening briefs to be filed by May 6, 2025.

    Soon after, on February 28, DOL filed its second appeal to the 5th Circuit Court in the Flint Avenue case. Both actions may be intended to give time to newly confirmed Labor Secretary Lori Chavez-DeRemer to settle into her new role and determine how the Trump administration will move forward with litigation and the Biden administration’s rulemaking.

    CUPA-HR will continue to keep members apprised of legal updates regarding the overtime regulations.



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  • DOL files fresh appeal of a Texas decision vacating its new overtime rule

    DOL files fresh appeal of a Texas decision vacating its new overtime rule

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    Dive Brief:

    • The U.S. Department of Labor has appealed a Texas federal judge’s 2024 decision blocking its Biden-era final rule which sought to expand overtime pay protections under the Fair Labor Standards Act, according to a Feb. 28 court filing.
    • Last December, Judge Sam Cummings of the U.S. District Court for the Northern District of Texas ruled against DOL in Flint Avenue, LLC v. U.S. Department of Labor, vacating and setting aside the final rule. Cummings’ decision came just over one month after another Texas judge similarly vacated and set aside the rule in a separate lawsuit filed by the state of Texas and parties including the Plano Chamber of Commerce.
    • The appeal takes Flint Avenue to the 5th U.S. Circuit Court of Appeals, the same court in which DOL filed an appeal of the decision in the State of Texas case last year. DOL’s public affairs staff did not immediately respond to a request for comment. The U.S. Department of Justice, which represents the DOL, did not respond to a request for comment submitted via its online form.

    Dive Insight:

    The Feb. 28 notice of appeal may come as a surprise to employers who expected the Trump administration to abandon the final rule; attorneys who previously spoke to HR Dive said that the rule was effectively “dead” despite DOL’s State of Texas appeal because of the Trump administration’s conservative policy stance on overtime.

    In fact, the new administration had already filed motions in the 5th Circuit pertinent to overtime rule litigation. On Jan. 22, two days after President Donald Trump’s inauguration, DOJ attorneys sent a letter to the 5th Circuit requesting a 30-day extension on the deadline set by the court to file an opening brief in the State of Texas appeal. The court granted the request and the agency’s filing deadline is currently set to March 7.

    The April 2024 final rule proposed a two-step process that would have eventually raised the minimum annual salary threshold for overtime pay eligibility under the FLSA from $35,568 to $58,656 by Jan. 1, 2025. The rule would then have implemented a mechanism for automatically adjusting the threshold every three years using current wage data beginning in July 2027.

    But a series of Texas court decisions froze the rule. The judge in State of Texas held that the rule exceeded DOL’s authority and was unlawful. Likewise, Cummings said in his decision that he found the State of Texas judge’s reasoning “persuasive,” and he adopted the same reasoning in ruling for the plaintiffs.

    There is some intrigue in how the 5th Circuit might rule on the two appealed judgments given that the court signed off on DOL’s overall use of a salary basis test for determining overtime pay eligibility in last year’s Mayfield v. U.S. Department of Labor. The Mayfield plaintiffs alleged that the salary basis test had no basis in the FLSA’s text, but the 5th Circuit disagreed. The court did hold, however, that DOL “cannot enact rules that replace or swallow the meaning” of the FLSA’s text, adding that particular salary threshold may raise legal issues because of their size.

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  • DOL allows employers to self-correct 401(k) errors

    DOL allows employers to self-correct 401(k) errors

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    Employers can soon self-correct certain retirement plan contribution errors, thanks to federal regulations published Wednesday.

    Beginning March 17, employers may use a self-correction tool to “remedy delays in sending participant contributions, such as employee payroll deductions, and participant loan repayments to retirement plans,” according to a U.S. Department of Labor announcement.

    When the change was proposed two years ago, a business-side attorney said employers would likely welcome the option to self-correct as it would streamline the process.

    The correction program may allow employers and other plan officials to avoid certain civil enforcement actions and penalties under the Employee Retirement Income Security Act and the Internal Revenue Code, DOL said.

    “The Employee Benefits Security Administration is pleased to provide these improvements to our Voluntary Fiduciary Correction Program so that employers and other plan officials can take advantage of streamlined tools to correct legal violations, and America’s workers get full protection for their hard-earned benefits,” said Assistant Secretary for Employee Benefits Security Lisa M. Gomez in a statement.

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  • President-Elect Trump Nominates Lori Chavez-DeRemer for DOL Secretary and Linda McMahon for Education Secretary

    President-Elect Trump Nominates Lori Chavez-DeRemer for DOL Secretary and Linda McMahon for Education Secretary

    by CUPA-HR | December 10, 2024

    Over the past few weeks, President-elect Donald Trump has announced several nominations for leads at federal agencies. Of relevance to CUPA-HR members, Trump has nominated Rep. Lori Chavez-DeRemer (R-OR) to serve as secretary at the Department of Labor (DOL) and Linda McMahon to serve as the Department of Education (ED) secretary. The following analysis dives into how Chavez-DeRemer and McMahon may lead each agency’s regulatory action on a few of the most pressing policy issues.

    DOL Secretary

    FLSA

    Chavez-DeRemer was nominated to serve as labor secretary on November 22. Chavez-DeRemer was viewed as a surprising pick for many in the labor and employment policy space given her Congressional record and support from labor unions. Her nomination raises questions about the direction in which DOL will go under the Trump administration with respect to certain policies and regulations, such as the overtime regulations under the Fair Labor Standards Act (FLSA), joint employer regulations, and independent contractor regulations.

    As a reminder, the Biden administration’s overtime regulations were struck down in federal court on November 15. The ruling strikes down all components of the Biden administration’s rule, including the July 2024 and January 2025 salary thresholds and the triennial automatic updates. On November 26, however, the Biden administration filed a notice of appeal to the 5th U.S. Circuit Court of Appeals in hopes of reinstating the rule before their term ends.

    Chavez-DeRemer has not publicly supported or opposed the Biden administration’s overtime rule, but labor unions have supported the rule through regulatory comments and public statements. Many anticipated that a second Trump administration’s DOL would stop defending the Biden rule in court if the Biden administration chose to appeal. Given organized labor’s support of Chavez-DeRemer, there is a chance that DOL under her authority would continue to defend the rule in court. However, it appears unlikely that the rule in its entirety would be defended, and it is more likely that DOL would attempt to defend the July salary threshold only. As a reminder, the salary threshold increase that took effect on July 1, 2024, used the Trump administration’s 2019 overtime rule methodology to determine the level, which could lead to a possible reasoning for defending the July salary threshold level.

    Joint Employer and Independent Contractor Rules

    Similar to the overtime regulations, the future of other labor and employment regulations relevant to higher ed HR appears uncertain in the face of Chavez-DeRemer’s nomination. Two DOL regulations — the joint employer and independent contractor rules — seem certain to swing back in favor of policies like those implemented under the first Trump administration, but Chavez-DeRemer’s inconsistent record in Congress on both issues makes it unclear how DOL under Trump will regulate them.

    Notably, Chavez-DeRemer is one of three Republican cosponsors of the Protecting the Right to Organize Act, a Democrat-backed bill that would expand organized labor’s power over workers and employers. There are provisions in the PRO Act that a second Trump DOL is not anticipated to implement, including provisions to apply a controversial “ABC” test for worker classification under the National Labor Relations Act and to adopt a broader joint employer standard under the NLRA than the standard implemented by the Trump administration. Given her support for the PRO Act, Chavez-DeRemer could change direction from the anticipated actions expected from the Trump administration with respect to joint employment and independent contractor status, along with other labor policies.

    Education Secretary

    Linda McMahon was nominated to serve as ED secretary on November 19. McMahon’s nomination was also considered a surprise, but for reasons surrounding her previous experience. During Trump’s first term, McMahon served as the administrator of the U.S. Small Business Administration, and most recently, she served as co-chair of Trump’s transition team. She was previously an executive for World Wrestling Entertainment (WWE). With respect to education, McMahon served as a trustee for Sacred Heart University for over a decade, and she also briefly served on the Connecticut Board of Education.

    Title IX

    McMahon’s previous positions and experience do not provide much insight into her stance on higher education policy. That being said, we expect that McMahon will largely follow the education policy direction of President-elect Trump if she is confirmed. With respect to Title IX, it is expected that Trump will seek to reimplement his administration’s 2020 Title IX regulations nationwide, which we anticipate McMahon will follow. It remains to be seen if McMahon and the Trump administration’s ED will attempt to issue new Title IX regulations that may be more conservative than those issued in 2020 to address concerns regarding rights and protections for transgender students.

    Looking Ahead

    Both Chavez-DeRemer and McMahon will face Senate confirmation hearings by relevant oversight committees and votes by the full Senate. During confirmation hearings, more information about the nominees’ priorities at their respective agencies will be revealed. CUPA-HR will keep members apprised of any updates related to the confirmation process of Chavez-DeRemer and McMahon as well as regulatory updates from DOL and ED.



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  • DOL Issues Report on Coercive Contractual Provisions

    DOL Issues Report on Coercive Contractual Provisions

    by CUPA-HR | October 22, 2024

    On October 17, the Department of Labor’s (DOL) Office of the Solicitor (SOL) issued a Special Enforcement Report on “coercive contractual provisions.” The report lists several provisions they have seen included in employment contracts that the department believes “may discourage workers from exercising their rights under worker protection laws.” The report demonstrates recent actions taken by SOL to combat such provisions, but it does not include new enforcement actions against employers that use these provisions.

    In the report, SOL claims the provisions discussed are coercive, violate the law and have significant impacts on the most vulnerable workers. The report details seven types of contractual provisions they find especially concerning:

    1. Contractual provisions requiring workers to waive statutory protections, including those requiring workers to waive their rights to bring claims and recover damages under the Fair Labor Standards Act
    2. Contractual provisions that purport to require employees to agree that they are independent contractors
    3. Indemnification-type provisions and related counterclaims purporting to shift liability for legal violations to workers or other entities
    4. “Loser pays” provisions attempting to require employees to pay the employer’s attorney’s fees and costs if the employees do not prevail in litigation or arbitration
    5. “Stay or pay” provisions, including some training repayment assistance provisions, that purport to require workers to pay damages to their employer for leaving a contract early
    6. Confidentiality, non-disclosure and non-disparagement provisions
    7. Company policies that purport to require workers to report safety concerns to their employer before contacting any government agencies

    The report emphasizes that the Department of Labor is “not bound by private contracts or arbitration agreements between workers and employers” and thus “has a unique role to play in fighting the use of these ‘fine print’ or ‘coercive’ contractual provisions.” It provides examples of cases where the courts have found such agreements unenforceable or where DOL has pursued an injunction in federal court seeking an order blocking one or more contract provisions.

    Importantly, the report is largely a restatement of current law and, for the most part, does not outline new enforcement actions against employers for using these provisions. Instead, the report outlines the work SOL has done recently to fight against the coercive contractual provisions, including cases and amicus briefs filed against employers using such business practices.

    CUPA-HR will continue to monitor for additional resources from the Department of Labor that may impact contractual labor provisions.



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  • DOL Issues Guidance on AI in the Workplace – CUPA-HR

    DOL Issues Guidance on AI in the Workplace – CUPA-HR

    by CUPA-HR | May 8, 2024

    On April 29, the Department of Labor Wage and Hour Division (WHD) issued a Field Assistance Bulletin on “Artificial Intelligence and Automated Systems in the Workplace Under the Fair Labor Standards Act and Other Federal Labor Standards.” The bulletin provides guidance on the applicability of the FLSA and other federal labor standards as they relate to employers’ increased use of artificial intelligence and automated systems in the workplace.

    Background

    In October 2023, President Biden released an Executive Order on the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” and directed agencies across the federal government to take action to address the increased use of AI in all areas of life. With respect to AI in the workplace, the order directed the U.S. Secretary of Labor to “issue guidance to make clear that employers that deploy AI to monitor or augment employees’ work must continue to comply with protections to ensure that workers are compensated for their hours worked, as defined under the Fair Labor Standards Act (…) and other legal requirements.” The Field Assistance Bulletin is the first response from the DOL to the Executive Order’s directive, though additional guidance may be provided in the future.

    Summary of Guidance

    The bulletin discusses existing employer obligations to comply with and avoid penalties under relevant federal labor laws. It also clarifies that the use of AI and other technologies does not absolve employers of their responsibilities to comply with such laws. CUPA-HR’s government relations team has summarized the key points of the guidance below.

    AI and the FLSA

    The guidance highlights employers’ obligations to pay employees at least the federal minimum wage for all hours worked and at a rate of at least one and one-half times their regular rate of pay for every hour worked in excess of 40 in a single workweek. As such, WHD recognizes that employers have implemented AI and other automated systems to comply with these requirements, including implementing systems to help track work time, monitor break time, assign tasks to available workers, and monitor work locations. Additionally, WHD provides examples of AI and other technologies employers use to help calculate wages owed under the FLSA.

    WHD also recognizes that AI has the potential to undercount hours worked or miscalculate wage rates owed to employees. Regardless of the use of AI, WHD states in its guidance that “employers are responsible for ensuring that they are paying employees for all hours worked” under the FLSA and that “employers are responsible for ensuring that the use of AI or other technologies to calculate and determine workers’ wage rates does not cause workers to be paid in violation of” the FLSA and other applicable federal wage standards. As such, WHD suggests that employers exercise human oversight over the technologies to ensure they are not violating the FLSA.

    AI and the Family and Medical Leave Act

    Similar to WHD’s discussion of employers’ obligations to adhere to the requirements of the FLSA, the bulletin provides guidance on employers’ responsibilities to adhere to the requirements of providing Family and Medical Leave Act leave when using AI and other automated systems. WHD once again recognizes that some employers use AI and other tools to process leave requests, determine whether an employee has provided proper certification that supports the need for FMLA leave, or track the use of FMLA leave. As a result, WHD states that employers should oversee the use of AI or automated systems used to implement FMLA leave “to avoid the risk of widespread violations of FMLA rights when eligibility, certification, and anti-retaliation and anti-interference requirements are not complied with.”

    AI and Nursing Employee Protections

    WHD also provides guidance for employers’ use of AI as it relates to nursing employees’ rights to reasonable break time and space to express breast milk while at work, as protected under the FLSA and the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act). The bulletin states that, though employers may use AI to track employee work hours, set work schedules, and manage break time requests, any instance in which automated systems “limit the length, frequency, or timing of a nursing employee’s breaks to pump would violate the FLSA’s reasonable break time requirement.” The guidance also states that systems that score productivity and/or penalize workers for failing to meet productivity standards due to pump breaks would violate the FLSA. Finally, they clarify that automated systems that require nursing employees to work additional hours to make up for time spent during pump breaks or that reduce the hours scheduled in the future for workers because they took pump breaks would be considered “unlawful retaliation” under the FLSA. WHD therefore provides that “employers are responsible for ensuring that AI or other automated systems do not impose adverse actions on employees for exercising their rights to pump at work.”

    AI and the Employee Polygraph Protection Act

    The bulletin provides an overview of the Employee Polygraph Protection Act (EPPA) and most private employers’ prohibition from using lie detector tests on employees or for pre-employment screenings. In light of this law, WHD recognizes that AI technologies have been developed to “use eye measurements, voice analysis, micro-expressions, or other body movements to suggest if someone is lying or detect deception.” As such, WHD reaffirms that EPPA prohibits covered private employers from using AI technology as a lie detector test.

    AI and Prohibited Retaliation

    Finally, the bulletin covers protections against retaliatory conduct provided under the FLSA and other laws administered by WHD to employees who have filed complaints about potential violations of their rights. As a result of these protections, WHD states that “the use of AI and other technologies by employers to take adverse action against workers for engaging in protected activities under one or more laws enforced by WHD constitutes unlawful retaliation.” Additionally, WHD clarifies that the use of AI to surveil the workforce for protected activity and to take adverse actions could violate anti-retaliation protections under the FLSA and other laws. As such, WHD reminds employers in the guidance that they are responsible for compliance with anti-retaliation provisions regardless of whether they incorporate AI technology into their business practices.

    CUPA-HR will continue to monitor for additional guidance from federal agencies as it relates to the use of AI in the workplace.



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  • DOL Increases Overtime Minimum Salary Threshold to $58,656 in Final Rule, Implements Automatic Updates – CUPA-HR

    DOL Increases Overtime Minimum Salary Threshold to $58,656 in Final Rule, Implements Automatic Updates – CUPA-HR

    by CUPA-HR | April 23, 2024

    On April 23, the Department of Labor (DOL) issued the highly anticipated final rule to alter the overtime pay regulations under the Fair Labor Standards Act (FLSA). The rule increases the minimum salary threshold to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. The rule also implements automatic updates to the threshold that will occur every three years. Institutions will need to make all necessary adjustments by July 1, 2024, in order to be in compliance with the final rule.

    The department clarified that the first increase updates the minimum salary threshold using the department’s current methodology, which was used in the 2019 Trump-era overtime rulemaking to set the current standard of $35,568. The second increase then implements the department’s new preferred methodology, which sets the minimum salary threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest wage census region. This phased-in implementation will likely impact how litigation challenging the rule is both pursued and decided over the next six months.

    In September 2023, DOL issued its proposed rule to update the minimum salary threshold, which sought to increase the threshold from its current level of $35,568 annually to $60,209 — a nearly 70% increase. The proposed rule also sought to implement triennial automatic updates based on the 35th percentile.

    CUPA-HR submitted comments in response to the proposed rule and participated in a meeting with DOL and officials from the White House Office of Information and Regulatory Affairs (OIRA) to express our concerns with the proposal. In both the comments and OIRA meeting, CUPA-HR made the four following recommendations for DOL to consider before issuing their final rule:

    1. DOL should not update the salary threshold at this time.
    2. DOL should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    Lawsuits challenging the final rule are forthcoming. In the meantime, CUPA-HR will be hosting a webinar on May 8 covering the provisions of the final rule and its impact on higher education. Registration is open and free to all.



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  • White House Approves DOL Overtime Rule – Rule Release Imminent – CUPA-HR

    White House Approves DOL Overtime Rule – Rule Release Imminent – CUPA-HR

    by CUPA-HR | April 11, 2024

    On April 11, 2024, the White House Office of Information and Regulatory Affairs (OIRA) announced it had concluded review of the U.S. Department of Labor’s (DOL) final overtime pay rule. The rule is expected to increase the minimum salary threshold for the executive, administrative and professional (EAP or white collar) employee exemptions to overtime pay requirements under the Fair Labor Standards Act (FLSA) regulations. OIRA review is the final step in the regulatory process, and we expect DOL will release the final rule any day now. We will send another alert as soon as the final rule is released.

    On April 4, 2024, CUPA-HR’s president and CEO, government relations team and board members met with officials from DOL and OIRA to express our concerns with the September 2023 proposed rule. The proposal sought to increase the threshold from its current level of $35,568 annually to $60,209 — a nearly 70% increase. DOL also proposed increasing the salary threshold automatically every three years to the 35th percentile of weekly earnings of full-time salaried workers. Finally, DOL proposed that all employers would need to implement these changes within 60 days of the final rule’s release.

    During our OIRA meeting, CUPA-HR reiterated the concerns that were addressed in our comments submitted in November 2023. The comments made the following four recommendations for DOL to consider prior to issuing a final rule:

    1. DOL should not update the salary threshold at this time.
    2. If DOL implements an increase, it should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    We expect lawsuits challenging the final rule are forthcoming. CUPA-HR will keep members apprised of all updates related to the overtime regulations. Once the new regulations are released, we will plan and share registration information for a webinar. We will also provide an update for members who attend the spring conference in Minneapolis next week.



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