(This Legal Alert from Fisher Phillips provides an overview of agency positions and predictions. It is not intended to be, and should not be construed as, legal advice for any particular fact situation.)
President-elect Donald Trump has announced that he plans to nominate Andrew Puzder to be the next Secretary of Labor. This cabinet-level position heads the U.S. Department of Labor (DOL), one of the federal agencies that has the widest and deepest impact on employers across the country.
Assuming that Puzder’s selection is confirmed by the Senate, what should employers know about him in order to predict what life will be like under his tenure as part of the Trump administration?
Fisher Phillips has assembled the opinions of some of the firm’s foremost thought leaders when it comes to this question, offering you a glimpse into what to expect for the next several years.
Puzder is the CEO of CKE Restaurants, the parent company of Carl’s, Jr., Hardee’s and Green Burrito quick-service restaurant brands. He was an early supporter of the president-elect and served as a senior policy advisor to the Trump campaign.
He has been a frequent media commentator on the state of the American workforce, and therefore, we can glean much about how he is expected to run the Labor Department. In most instances, he can be counted on to favor management over labor, although he often takes pragmatic positions when it comes to balancing the interests of workers and employers.
DOL’s Role Over Employers
The DOL impacts the inner workings of the American workplace on a daily basis. The department enforces laws involving employers and unions, and more importantly, develops binding regulations and directives for a variety of workplace laws. It encompasses over 30 agencies, boards, offices and programs that each have a specialized role when it comes to labor and employment law.
The three most commonly known agencies and offices within the DOL are the Wage and Hour Division (WHD), the Occupational Safety and Health Administration (OSHA) and the Office of Federal Contract Compliance Programs (OFFCP). However, the DOL also has a role to play with respect to immigration law, and with the selection of Puzder, employers may also be interested to follow the goings-on that will take place at the Office of Labor-Management Standards (OLMS) – an office that could play a vital role over unionized workplaces in the coming years.
Wage And Hour Division
Most employers are sitting in limbo at the moment, wondering whether an appeals court will resurrect the DOL overtime rule that recently was blocked by a federal court judge. But taking a longer-term view, many also wonder about the future of the rule once Jan. 20, 2017 arrives, with President-elect Trump occupying the oval office and Secretary Puzder heading the Labor Department.
While it is difficult to gauge how Trump feels about the overtime rule, Puzder’s feelings on the matter are very clear. “He is not a fan,” says Lori Armstrong Halber, a leader in the Fisher Phillips Wage and Hour Law Practice Group.
She points to the fact that Puzder wrote an op-ed in Forbes magazine earlier this year where he broadcasted his opposition to the rule. He predicted that it would “not deliver as promised,” and was an ill-conceived effort by the government to regulate its way to economic prosperity.
“Puzder said that he did not believe it would be helpful to turn management positions into hourly jobs where employees are compensated for ‘time spent rather than time well spent,’ which is a pretty good indication that he will want to scrap or substantially rework the rule once in charge,” said Armstrong Halber.
Another area where Puzder has signaled his position is with respect to federal minimum wage. Armstrong Halber points to an interview he gave to Fox Business in May where he plainly stated that “raising the minimum wage is not the best solution” to solving economic woes of the middle class. If Trump cedes decision-making power to Puzder with respect to this issue, employers can expect that any increase to the federal minimum wage of $7.25 will be slow, measured and cautious.
In that same interview, Puzder advocated for a tiered system that retained a lower minimum wage for entry-level workers, while raising the standard federal minimum wage to about $9 per hour.
“His selection to the top post in the Labor Department can’t be seen as a positive to those in the ‘Fight for $15’ movement and others who want to see a quick and dramatic increase to the minimum wage,” says Armstrong Halber.
“Overall, you can expect decreased wage and hour enforcement from the Department of Labor under Puzder,” concludes Armstrong Halber. His appointment seems to be in line with President-elect Trump’s promises to promote a less burdensome environment at the federal government for employers.
Occupational Safety And Health Administration (OSHA)
The stated purpose of OSHA is to assure safe and healthy working conditions for working men and women by setting and enforcing standards and by providing training, outreach, education and assistance.
Under the Occupational Safety and Health Act (OSH Act), OSHA is required to promulgate safety and health standards designed to protect employees from safety and health hazards in the workplace. The agency is required to go through an extensive rulemaking process in order to promulgate a new standard. During the Obama Administration, OSHA has set a number of safety and health standards that have been a concern to the business community and employers.
In addition to complying with OSHA’s safety health standards, the OSH Act requires employers to follow or comply with Section 5(a)(1) of the OSH Act, known as the “General Duty Clause.” This clause requires employers to keep their workplaces free from serious recognized hazards and is cited when no specific OSHA standard applies to this hazard.
In addition to promulgating safety and health standards, OSHA is required to conduct inspections of worksites throughout the country, which can lead to citations and fines for businesses found to be out of compliance.
Starting on Jan. 20, 2017, Secretary of Labor Puzder will be charged with reviewing a number of OSHA standards and directives that had been issued over the last eight years of the Obama Administration.
According to Edwin Foulke, Jr., co-chair of the Fisher Phillips Workplace Safety and Catastrophe Management Practice Group and a former head of OSHA, these standards and regulations have been the subject of a number of criticisms from employers, many believing that they are overly broad and unduly burdensome. “We anticipate that there will be a number of standards and regulations that will be reviewed within the first six months of the Trump administration,” says Foulke.
According to Foulke, there are quite a few that could be under Puzder’s microscope.
First and foremost, the agency’s Recordkeeping and Reporting of Occupational Injuries and Illnesses rule could be rolled back by Puzder. OSHA's new recordkeeping standard was revised in 2016 and went into effect on Dec. 1. In those changes, OSHA required that employers provide a reasonable reporting policy for employees to report injuries and illnesses, as well as revising the recordkeeping retaliation provisions directly impacting safety incentives and drug testing. “There has been a lot of concern raised by employers about these changes,” says Foulke, which require employers covered by the standard to electronically file injury and illness information to the government.
Another recent change impacting employers has been the increase in OSHA penalties. In 2016, the agency increased their fines by approximately 78 percent. There is a continuing provision in the budget bill that allows OSHA to update or increase the penalty amounts each year based on the cost of living.
“We anticipate that the Trump administration will look to Congress to revoke that provision and perhaps reduce the current penalties,” says Foulke.
Another area that Puzder might focus on is the standard by which OSHA enforces the collection of more than 22 whistleblower statutes enforced by the agency’s whistleblower protection program. Employees are protected from retaliation if they face adverse action as a result of participating in safety and health activities or reporting work-related injuries, illnesses or fatalities. In the past several years, OSHA revised the whistleblower investigation manual by lowering the employee’s burden of proof necessary to prove retaliation. Puzder could ratchet that standard back up to a level more acceptable to employers.
Other areas that are likely to be addressed by Puzder include:
The respirable silica standard has drawn criticism from a number of industry and business groups who claim that key components of the standard – particularly ones that relate to exposure assessments, monitoring of respiratory silica levels by a competent person and medical examination for employees – are burdensome. “Some employers believe that compliance is nearly impossible,” says Foulke, which is why this standard is likely to be scrapped or radically revised under Puzder.
In 2012, OSHA issued an interpretive letter, which stated that the OSHA Compliance Officer could allow non-company personnel, such as union representatives, plaintiffs’ lawyers or community activists, to participate in the walk-around inspection of a non-union facility during an inspection. According to Foulke, the Trump administration will look closely at this policy and most likely reverse it, especially because it is not supported by the OSH Act itself.
Foulke believes that OSHA will move away from the sole focus of enforcement to more of an “enforcement and compliance assistant” mode that was prevalent in not only the Reagan administration but also both Bush administrations and the Clinton administration. “I believe that Secretary of Labor Puzder will look at the use of the joint employer doctrine in the OSHA setting, scaling back some of the aggressive positions taken by the Obama administration,” says Foulke.
Finally, the Occupational Safety and Health Review Commission currently has a vacancy and is operating with only two members. Foulke anticipates that the Trump administration will move to appoint the current Republican commissioner, Heather McDougal, as chair, and move to fill the other remaining position with a like-minded individual in order to ensure a Republican majority at the commission.