Judge Strikes Down Obama-Era Federal Overtime Rules

A federal judge in Texas last week struck down an Obama-era federal rule on overtime pay that would have added to the regulatory burden and increased the salary threshold for overtime-eligible workers – thus increasing employers’ labor costs.

The rule would have made about 4 million people eligible for overtime that were not previously eligible and would have impacted the “white collar exemption” of the Fair Labor Standards Act.

Mike Ripley, Indiana Chamber vice president of health care and employment law policy, pointed to the overreach of the previous administration’s Department of Labor (DOL) rule and that the judge’s decision makes way for more reasonable agreement and discussion between employers and the DOL.

U.S. Chamber of Commerce President and CEO Thomas J. Donohue released this statement about the judge’s decision:

“(The) decision is another victory for the effort to free our economy from the regulatory stranglehold of the last eight years. We have consistently said that the last administration went too far in its 2016 ­overtime rule, and we are pleased that Judge Mazzant granted a final judgment that makes permanent his previous ruling against the overtime rule.

“This means that small businesses, nonprofits, and other employers throughout the economy can be certain that the 2016 salary threshold will not result in significant new labor costs and cause many disruptions in how work gets done. The Obama administration’s rule would have resulted in salaried professional employees being converted to hourly wages, reduced workplace flexibility and remote electronic access to work, and halted opportunities for career advancement. 

“We look forward to working with the Department of Labor on a new rule to develop a more appropriate update to the salary threshold.”

A coalition of national and local business groups challenged the rule in 2016 and the Indiana Attorney General’s office filed on behalf of the state of Indiana.

The Department of Justice this week dropped an appeal to save the rule after the judge’s decision.

Know the Laws Regarding Minors and ‘Hazardous Duties’ in Internship/Mentorship Programs

Employers often have questions about allowable internship activities. Some of the questions that typically surface include: Are students legally allowed to operate certain machinery? Even if they are, what is my liability for taking on a minor?

While both Indiana and federal laws deem certain duties as hazardous (and thus typically out of the reach of minors), it is often still possible to place minors in roles that expose them to their chosen occupation of interest. In fact, minors determined to be apprentices or student learners are exempt from existing legal barriers and may perform certain hazardous duties.

Student Learner Exemption:
Requirements for hosting a student learner include the following:

  • Enrollment in a course of study and/or training in a cooperative vocational training program in a public school (or in a similar program conducted by a private school).
  • Written agreement between the student, employer, and school coordinator or principal.
  • Work component of the program conducted under the close supervision of an experienced employee.
  • Correlation of safety instructions with the on-the-job training.
  • Schedule of organized and progressive work process to be performed on the job by the student learner

Liability Concerns:
Student learners are no different than any other employee. Employers should call their respective insurance companies with any questions they may have, and individual coverage will vary. Nothing in Indiana law requires a different designation, with respect to liability, for student learners in comparison to regular employees.

More information:
See the Child Labor Checklist  and visit the Indiana Department of Labor page for more information related to federal and state requirements for employing minors, restrictions to work hours, expanded information on what constitutes a “student learner,” and how to obtain work permits. These regulations must still be followed for all employed minors, including student learners.