May 29, 2020
In a bid to beat the clock as the potential of a Democratic Congress and presidency looms, the U.S. Department of Labor finalized regulations regarding pay in retail or service establishments, overtime for workers with fluctuating workweeks, and the Labor Secretary’s oversight authority.
The first rule concerns Section 7(i) of the Fair Labor Standards Act, which allows overtime-exempt status to be conferred on certain employees of retail or service establishments who are paid mostly on commission. To provide clarity in determining whether the exemption applies, the rule strikes lists of industries that “have no retail concept” and businesses which “may be recognized as retail” from existing regulations, items DOL notes has led to inconsistent court rulings.
The second rule allows employers to give incentive-based payments to non-overtime exempt workers who have fluctuating workweeks, in addition to fixed weekly salaries. In addition, employers must include such added payments in the calculation of the worker's regular rate of pay.
Finally, under the third rule DOL secretaries will be granted review over decisions issued by the Board of Alien Labor Certification Appeals and the Administrative Review Board. DOL Secretary Eugene Scalia said in a recent interview the move is intended to “promote accountability” by increasing oversight within the agency.
Outlook: Republicans made ample use of the Congressional Review Act (CRA) in 2017, wiping out several rulemakings made under the Obama administration. (The CRA enables Congress to send to the President joint resolutions revoking certain final regulations through expedited procedures that avoid a Senate filibuster.) If Democrats take the Congress and the White House in November, they will likely not hesitate to do the same if they are able. However, the CRA limits the windows in which lawmakers can overturn regulations to 60 legislative days after they were issued. By issuing final regulations now, it is likely these three regulations would avoid any CRA action.