Recently, the United States Department of Labor (“DOL”) issued a white paper or a formal position statement on exemption issues in the financial services industry. I wrote about that in March, when it issued. This was the first in a series of white papers that will replace the longstanding practice of the DOL responding to inquiries from employers and workers and issuing/publishing these responses, so-called Opinion Letters. I bemoan the decision of the DOL to stop this informative and educational process.
The agency believes the opinion letter process utilized too many agency resources. The agency is evidently working on a new initiative that will focus on employee misclassification. There is a new push and urgency from not only the federal DOL but many state agencies to focus on the infamous independent contractor issue.
Nancy Leppink, Deputy Administrator of the Labor Wage and Hour Division, stated that “the cost-benefit was not there and, moreover, the department has a ‘robust regulatory agenda.’ Another factor was that most requests for opinions emanated from the employer community, rather than workers or labor unions. This evidently troubled the DOL but it makes a great deal of sense that most requests come from employers as it is the employer who must make initial (and continuing) decisions on classification (exempt vs. non-exempt) as well as working time policies (e.g. on-call, travel).
Employers seek the guidance so that they may comply with the myriad laws and regulations that apply to the numerous compensation issues in the workplace. Also, the many opinion letters that have been published, on a far reaching and wide array of subjects, give invaluable guidance to employers on such subjects as whether or not the employer must pay exempt employees for snow days to whether the solicitation and sales of mortgages by mortgage brokers qualify as “sales” for purposes of the outside sales exemption. Now that the agency has adopted this white paper approach, it will only address certain “major” issues as it itself defines those issues.
I regret this agency decision. I believe the public, especially the employer constituency, will be adversely impacted by it as employers will be left again to, oftentimes, make reasoned “guesses” on what is legal for them to do. If they are wrong, they pay in overtime and other damages. The inquiry-response channel that had formerly been provided by the opinion letter process took much of the guesswork out of some employer decisions.
Now, it’s back again.