By A. Scott Hecker and Noah A. Finkel

Seyfarth Synopsis: On June 13, 2023, the Biden Administration announced the release of its Spring 2023 Unified Agenda of Regulatory and Deregulatory Actions (the 2022 Fall Agenda was issued in January 2023). In connection with the Administration’s new regulatory agenda, the U.S. Department of Labor’s Wage and Hour Division continues to pursue a number of significant rulemakings, many of which have experienced delays to their target publication dates. These include a potential increase in the minimum salary level for the white-collar exemptions, the proposal for which is now scheduled for August 2023.

Even though the judiciary seems primed to continue chipping away at the authority of what some call the “administrative state” — is Chevron still a thing? — the Biden Administration’s executive agencies remain focused on rulemaking. When we posted on the 2022 fall agenda, we noted the Department of Labor’s Wage and Hour Division (“WHD”) had a number of impactful standards on its plate. That remains the case, as none of the rules we discussed have issued in the meantime.

DOL’s most recent deadline to issue a Notice of Proposed Rulemaking (“NPRM”) on “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” had been May 2023, and “we anticipate[d] WHD will strive to timely meet its goal” after a number of delays. We’re sure there was plenty of striving, but WHD has — again — pushed its NPRM target, this time to August 2023. If we were betting men, we might take the over. But the NPRM has to issue someday, right? We may see changes to other parts of the rule, but one likely change we should all bet on is an increase in the minimum salary for exempt status — currently $684 per week, which annualizes to $35,568.

Given the interest in this rule, DOL will likely receive a ton of input once the NPRM is issued, so a final rule could be months (or even years) away. At this point, the Administration needs to worry about potential Congressional Review Act implications, an upcoming presidential election, and legal challenges if and when WHD publishes a final rule.

WHD’s “Employee or Independent Contractor Classification Under the Fair Labor Standards Act” has moved from the proposed to final rule stage. After receiving more than 54,000 comments to its NPRM, DOL also pushed its target for this rule from May to August. On June 9, the U.S. Court of Appeals for the Fifth Circuit granted DOL’s unopposed motion for a 120-day stay to allow the Department to complete this rulemaking, making it more likely DOL will publish the rule by fall. The parties must submit a status report within 60 days, so further movement on publication remains possible. For more information on what to expect when you’re independent contracting, see our prior blog.

Government contractors should also stay mindful of the following WHD activities:

  1. WHD is still working on regulations to implement Executive Order 14055, “Nondisplacement of Qualified Workers Under Service Contracts,” requiring contractors and their subcontractors awarded Federal Government service contracts “to offer jobs to qualified employees who worked for the previous contractor and performed their jobs well.” The regulatory agenda now suggests a final rule should issue this month.
  2. WHD’s rule “Updating the Davis-Bacon and Related Acts Regulations,” designed “to update and modernize the regulations implementing the Davis-Bacon and Related Acts to provide greater clarity and enhance their usefulness in the modern economy,” remains with the White House’s Office of Information and Regulatory Affairs (“OIRA”). While OIRA has had the rule since mid-December 2022, before the 2022 fall agenda came out, the 2023 spring agenda suggests DOL could publish a final rule this month. We previously blogged and podcasted on the issuance and impacts of this proposed rule, so we commend you to the preceding resources for more on how the rulemaking may change DOL’s Davis-Bacon prevailing wage processes. You’re probably already aware the proposed revisions are likely to increase prevailing wage rates.

Why so many delays? First, that’s the nature of rulemaking. The targets in regulatory agendas aren’t binding, i.e., they are not deadlines, but estimates. Various factors impact timing, including how many comments the Department receives on any given rule. As noted above, WHD’s independent control NPRM received 54,000+ comments.

Second, the Office of Information and Regulatory Affairs (“OIRA”) seems to be reviewing rules, e.g., the Davis-Bacon rule, longer than it has in the past, and rules need OIRA clearance before final publication.

Finally, Acting Secretary of Labor Julie Su is in the middle of a bruising confirmation process to ascend to the permanent Secretary role. It’s been suggested that the Department does not want to negatively impact her already-tenuous nomination status by issuing controversial rules before she receives Senate approval.

Whatever the case, the regulated community should remain aware of these rulemakings to ensure ongoing compliance.