United States: You're Hired: What Would Puzder's Selection As Labor Secretary Mean For Employers?

If Andrew Puzder's selection as secretary of labor is confirmed by the Senate, a new age of the U.S. Department of Labor (DOL) will be upon us – and there could be significant ramifications for both our workforce and the economy.

As an early supporter of the Trump administration, Puzder has usually favored management over labor, although he often takes pragmatic positions when it comes to balancing the interests of workers and employers. Upon taking office, we can expect that Labor Secretary Puzder will focus his priorities on immediate rollback of recent or looming policy changes and gaining specific knowledge of the DOL's institutional operations. By halting further scheduled progression and taking inventory, Puzder will then consider options to systemically "right-size" the DOL into an agency that reflects greater deference to the marketplace on regulatory matters and more certainty for businesses.

The Future of the DOL
As labor secretary, Puzder's administration would have several methods to move the DOL to a momentary standstill during his first 100 days in office. Whether he creates this breathing room or jumps right into implementing change may signal the depth and longevity of the policy changes he plans to initiate. To the extent he momentarily idles the DOL and takes time to understand its inner-workings, he could more meaningfully examine how to act in a manner that minimizes collateral attack or future challenge.

An Overhaul of the NLRB
Across the nation, companies are eagerly awaiting to hear Puzder's approach to the tremendous shift in National Labor Relations Board (NLRB) policy that occurred under the Obama administration. Over the past eight years, unions have gained a significant advantage on the organizing front and secured greater power at the bargaining table. The permanence of current union-leaning regulation in the areas of expedited elections, employee handbook compliance, franchisor liability and enforcement case handling would all stand in the line of fire under Puzder. Further, it's likely that DOL resources would be diverted back to the Office of Labor-Management Standards (OLMS), which enforces union disclosure requirements. Its staffing suffered an approximate 44% reduction under the Obama administration. We can expect that Puzder would likely work to once again beef up the OLMS – which could spell trouble for unions by heightening transparency.

Changes to Wage and Hour Regulations
As labor secretary, it's likely that Puzder would scrap or substantially rework the pending "white collar" overtime exemptions in 2017. Many predict he will withdraw the DOL's pending appeal of a Texas District Court's national preliminary injunction on the implementation of these regulations, so a decision for the case can be more quickly reached. Regardless, Puzder would likely use the rulemaking process to return to prior handling of the overtime exception issue. In addition, Puzder favors a tiered system that retains a lower minimum wage for entry-level workers and raises the federal minimum wage to $9 per hour. Overall, employers could expect decreased wage and hour enforcement from the DOL under Puzder.

A Rollback in OSHA's Power
Within the first several months of taking office, Puzder would undoubtedly review numerous OSHA standards and regulations implemented during the Obama administration. The corporate world hopes for considerable relief from OSHA's new injury and illness reporting requirements and the increases in OSHA fines and penalties. An overhaul to the agency's whistleblower protection program could occur, as well as a rollback in standards for which compliance is nearly impossible or highly impractical. Many also expect the recent empowerment of worker representatives with OSHA-like access power will be curtailed under Puzder.

EEO-1 Reporting Requirements
While it's quite possible that Puzder would ultimately eliminate the new EEO-1 reporting requirements on pay equality practices that take effect in March 2018, companies with more than 100 workers should continue to review their compensation plans to ensure compliance with federal anti-discrimination laws. When first introduced, this new reporting requirement met significant backlash from employers, given the undue burden and expense that would result. Considering Puzder's public criticism of overly burdensome administrative compliance reporting in the past, recordkeeping of this type would likely be viewed as unnecessary and disposable.

Rest assured, the current political landscape presents a unique opportunity for Puzder. At the helm and with the momentum of Trump-esque politics, he would be well positioned to implement the type of institutional and systemic changes that could not only eliminate gains achieved for unions and workers under the Obama administration, but also re-create the identity and future workings of the DOL moving forward. Whether the marketplace will self-regulate on the labor and employment matters that Puzder would remove from the DOL's regulation or enforcement remains to be seen. However, one thing is certain – there would be greater clarity and certainty for businesses under Puzder's watch.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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