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BPAA Biweekly Federal Policy Updates - October 4, 2019

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  • The Labor Department released a final rule Tuesday, October 1, that will expand overtime eligibility to 1.3 million additional workers. Under the rule, virtually all workers making less than $35,568 per year must be paid time and a half whenever their workweek exceeds 40 hours. The current salary ceiling has been stuck at $23,660 since 2004.
    • Under the new rule, DOL is: 
      • Raising the “standard salary level” from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
      • Raising the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year;
      • Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices; and
      • Revising the special salary levels for workers in U.S. territories and in the motion picture industry.
    • The rule has been applauded by business groups and Republicans as a "reasonable update" and a "workable solution." But, Democrats and worker advocates complain that an Obama administration rule would have lifted the wage ceiling to $47,476 and expanded coverage to 4.2 million workers—more than three times as many as under the Trump administration's new overtime standard. That Obama-era rule was enjoined by a federal court in Texas shortly before it was to take effect in December 2016. If you forget about the never-enforced Obama rule, which was enjoined before Trump even entered office, then the new overtime rule will actually cost employers $142.0 million annually. The rule. Read more about the overtime rule at Forbes.


  • Bloomberg Government - Tip Credit Rule Nears Release After Clearing White House Review: A Labor Department rule to revise wage requirements for restaurants and other businesses with tipped workers cleared the White House regulatory review shop, bringing it a step closer to public release. The proposed rule would clarify a 2018 policy rider passed into law in a government spending bill that prohibits employers—including supervisors and managers—from participating in tip-pooling arrangements. The rule also would walk back an Obama-era “80/20" policy that forced businesses to pay the full minimum wage to tipped workers for time spent on tasks that don’t generate tips, like prep work. The DOL previously had said workers should get the higher minimum wage for those tasks, as long as they account for at least 20% of weekly hours. Federal law allows tipped workers to be paid $2.13 per hour, rather than the $7.25 minimum rate for other workers. A draft proposal of the regulation had been under review at the White House Office of Information and Regulatory Affairs, before being removed from the OIRA website today. This typically signals the back-and-forth editing process between DOL and OIRA is complete, and the rule is ready for publication in the Federal Register. The exact timing remains unclear. DOL representatives didn’t immediately respond to a request for comment.
    • News reports suggest the DOL's proposed rules concerning tipped employees cleared review by the White House Office of Management and Budget (OMB).


  • New Opinion Letter: The DOL released opinion letter FLSA2019-13 concerning the FLSA's 7(i) overtime exception. Under 7(i), overtime provisions do not apply to a retail or service establishment employee whose regular rate of pay exceeds 1.5 times the federal minimum wage, and where more than half the employee’s compensation for a representative period (not less than 1 month) represents commissions on goods or services. The opinion letter addresses what “not less than one month” means.


  • WSJ - Senate Confirms Eugene Scalia as Labor Secretary: WASHINGTON—The Senate confirmed Eugene Scalia as Labor secretary on Thursday, installing a well-known corporate attorney at a department that handles a range of workplace matters. Mr. Scalia, a 56-year-old partner at the law firm Gibson, Dunn & Crutcher, succeeds Alexander Acosta, who stepped down from the position in July. The Senate confirmed Mr. Scalia in a party-line vote, 53 to 44, just two days after a Senate panel greenlighted his nomination, also along party lines. A son of the late U.S. Supreme Court Justice Antonin Scalia, Mr. Scalia is well-regarded within the conservative legal community. He built a practice over the past decade challenging Obama-era regulations on the grounds that policy makers failed to thoroughly review the costs and benefits of a postcrisis overhaul restricting Wall Street activities. He previously served as solicitor of the Labor Department during the administration of President George W. Bush. “Eugene Scalia is well-qualified to the lead the Labor Department with a steady hand at a time when workers’ wages are up and unemployment is near record lows,” said Sen. Lamar Alexander (R., Tenn.), chairman of the Senate Health, Education, Labor and Pensions Committee.


  • Bloomberg Government - South Carolina Lawyer Boone Tapped as Wage-Hour Deputy: The Labor Department has appointed South Carolina employment attorney Susan Boone as the Wage and Hour Division’s No. 2 official. Boone is rejoining WHD Administrator Cheryl Stanton, for whom she served as chief legal officer when Stanton directed the South Carolina Department of Employment and Workforce. Her first day was Sept. 23. The DOL announced Boone’s arrival as part of a Sept. 25 statement on new personnel joining the department’s regulatory reform task force. As WHD deputy administrator, Boone will serve on the task force along with Deputy Assistant Secretary for Policy Jonathan Wolfson, Principal Deputy Assistant Secretary for Policy Jonathan Berry, and Associate Deputy Secretary Nathan Mehrens, among others. The task force, which has been in place since early in the Trump administration, recommends to the labor secretary which regulations should be repealed or modified.


  • More Rules Coming: The Labor Department is also working on final rules to limit “joint employer” liability for businesses in staffing and franchise arrangements and to update the requirements for calculating an employee’s “regular rate” for overtime purposes. The DOL is finishing a regulation to create a new, industry-led apprenticeship program than would give businesses more control over job training.



  •  In Congress, Representative Brian Fitzpatrick (R–PA) introduced H.R. 4443, which seeks to amend the FLSA to increase the federal minimum wage, minimum cash wage for tipped employees, and the training wage. 



  • The Department of Justice’s Antitrust Division is, as we have notified BPAA Members, conducting a review of the consent decrees which govern ASCAP and BMI. Comments were filed in August, and those comments have now been posted to the Division’s website and are available for review here (they are organized alphabetically in groups of 100 under the “Public Comments” heading – click on one batch of 100, and a new screen will open with links to each of the comments in that group).
    • There are 878 comments, most advancing concerns about any potential change in those decrees. While many appear to be form letters from individual businesses who play music in their establishments and are afraid of the new costs that could be imposed were the decrees to be abolished, there are also comments from many others who more thoroughly address the issues. 
    • BPAA’s public comment letter can be viewed here:


  • ASCAP & BMI Consent Decrees Review Expected to Conclude This Year While Both Sides Argue Worst-Case Scenarios U.S. Department of Justice's ongoing review on whether the ASCAP and BMI consent decrees should be amended, sunsetted or simply left alone will likely be concluded before the end of the year, according to a comment made Aug. 13 by Makan Delrahim, the DOJ assistant attorney general for the antitrust division. Delrahim talked about a potential timeline at the "Music Licensing in the 21st Century" symposium, staged by the Hatch Center, the policy arm of the Orrin G. Hatch Foundation, in Park City, Utah. (There is a recording of the seminar on YouTube here.) ASCAP CEO Elizabeth Matthews, BMI President Mike O'Neill, Delrahim and former U.S. senator from Oregon and current National Association of Broadcasters president Gordon Smith spoke at the event. Read more at Billboard.
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