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The Trump administration just changed its overtime guidance — and business cheers

Labor Secretary Alexander Acosta at the White House prior to President Trump’s remarks on tax reform on Wednesday, Dec. 13, 2017.
Labor Secretary Alexander Acosta at the White House prior to President Trump’s remarks on tax reform on Wednesday, Dec. 13, 2017. (Salwan Georges/The Washington Post)

The Labor Department revived 17 opinion letters to employers issued during the final days of George W. Bush's second term, a move that represents a shift in how the department will enforce compliance with overtime and other wage requirements.

The letters from the Wage and Hour Division, which were withdrawn once Barack Obama took office, provide interpretations of how the Fair Labor Standards Act applies in individual cases. The Obama administration stopped issuing these letters altogether, instead releasing broader "Administrator's Interpretations" that laid out how the department viewed employers' specific obligations under the law.

Businesses and labor advocates have sparred over how best to provide guidance on these issues for a decade.

The National Association of Manufacturers and the U.S. Chamber of Commerce welcomed the Trump administration's move, saying it revives a narrowly tailored approach that does not establish new legal precedent. Critics said these individual letters allow employers to skirt paying overtime and complying with other aspects of the far-reaching labor law.

The administration is evaluating other aspects of how to interpret the FLSA, which covers everything from child labor to record-keeping. On Friday the Labor Department announced it was changing the way it evaluates whether interns and students qualify as employees under the 1938 law, to better reflect recent court rulings.

Trump administration cancels hundreds of Obama-era rules

Marc Freedman, executive director of labor law policy at the U.S. Chamber of Commerce, said in an interview that the revived approach was a "far superior way for employers to provide specific advice on compliance questions" than "the sort of broad pronouncements from on high" issued through such interpretations.

"These pronouncements were made with no public involvement, no public engagement," Freedman said.

National Employment Law Project executive director Christine Owens, however, blasted the revival of the nine-year-old letters as "another example of how this administration is siding with big business to make it harder to get paid for working overtime and to make it easier for companies to reap the benefits of young workers' labor without paying a cent for it."

David Weil, who served as wage and hour administrator under Obama, said in an email that opinion letters "are problematic" because they take considerable time and effort to craft, yet only address one company's situation.

"In the past they have been used as 'get out of jail free' cards by some companies and create uneven patterns of expectations among employers," he said, adding that the interpretations he issued while in the job were more comprehensive.

If Labor Secretary Alexander Acosta reverts to opinion letters, Weil added, "I would hope they provide the public transparency on who has requested them," and that workers and their representatives be allowed to make the same sorts of requests.

The letters in question were all posted online in January 2009, but they were never mailed. Obama officials rescinded them immediately upon taking office.

In a similar vein, Acosta withdrew in June two of the most controversial Administrator's Interpretations issued under the Obama administration. One dictated that if a subcontractor failed to comply with FLSA requirements, the company that hired it could be held liable. The second interpretation reset how to classify workers as employees covered by the FLSA, triggering overtime as well as other requirements.

"Because they were issued with no process, they could be withdrawn without a process," Freedman said of the two interpretations.

The letters reissued on Friday address individual cases that arose nearly a decade ago. But allies and opponents of the administration agreed the change could have a major impact, in part because employees have used opinion letters to buttress their case in pending litigation.

Patrick Hedren, vice president of labor, legal and regulatory policy at the National Association of Manufacturers, said in a statement that the letters help employers comply with the law by answering "fact specific questions, and since they are made public, [others] with similar questions can see how the Labor Department interprets the law."