White House Aims to Staff Up Wage & Hour Division

April 4, 2018, 10:16 AM

The White House is working behind the scenes to staff the Labor Department with more political appointees for the Wage and Hour Division, sources with knowledge of the matter tell Bloomberg Law.

The WHD, which regulates and enforces minimum wage and overtime laws, is short on political staff as it seeks to overhaul an Obama administration approach that was despised by the business community. Under President Donald Trump, the agency has only two politically appointed officials and is still awaiting the Senate confirmation of a WHD administrator who was nominated more than six months ago.

By comparison, there were nine political appointees at the WHD in the final years of the Obama administration, including Administrator David Weil.

The White House’s willingness to hire more officials at the WHD suggests the calls from business representatives this past year to accelerate the dismantling of the Obama-era wage-hour agenda are now being heard. Officials have already signaled a more business-friendly approach to minimum wage and overtime enforcement.

Sources, who didn’t provide names of candidates under consideration, said the White House has discussed sending both political and career personnel to aid the WHD. Spokespeople for the White House and the DOL didn’t immediately reply to requests for comment.

Long List

The staffing push is fueled in part by several heavy-lifting tasks already underway at the agency. That includes drafting a proposed rule to expand workers’ access to overtime pay, but in a more moderate way than attempted by the Obama administration.

The WHD also restored last year a GOP-favored practice of accepting requests for opinion letters, but has yet to publish new letters responding to requests for legal clarity on specific issues. The division is expected to respond to concerns from Sen. Marco Rubio (R-Fla.) that WHD field investigators are ignoring Labor Secretary Alexander Acosta’s orders and still relying on the prior administration’s protocols on worker classification and joint employment.

A pilot program launched April 3 that lets business self-report wage-and-hour violations is also likely to require significant attention.

The division has been at the center of considerable public controversy in recent months, stemming from a tip pool rulemaking process that is now under investigation by the DOL’s independent Office of the Inspector General. Congressional Democrats in both chambers have called for oversight hearings into why the WHD and White House deleted impact data from the proposed rule, a revelation first reported by Bloomberg Law.

Additional personnel would not only help the WHD execute on the robust policy agenda but also prepare the division for heightened political scrutiny next year. If the House or Senate flips to Democratic control after the fall midterm elections, new congressional committee leadership would be primed to target the WHD’s actions on overtime regulations and minimum wage enforcement for hearings and investigations.

Stanton, Jarrett, Sonderling

Bryan Jarrett is currently running the Wage and Hour Division on an acting basis. He’s slated to become deputy administrator once a permanent WHD chief arrives.

Trump nominated Cheryl Stanton, who is director of the South Carolina Department of Employment and Workforce, as WHD administrator in September. The full Senate has yet to vote on the nomination.

The division’s other political appointment is Keith Sonderling, a senior policy adviser. Sonderling, like Jarrett, formerly represented businesses facing allegations of wage-and-hour violations.

In addition to the top initiatives already underway, the WHD has faced pressure to issue further guidance on how the Trump administration defines employees versus independent contractors. Contractors are exempted from wage-and-hour protections.

The Obama WHD, led by Weil, made it a priority to root out misclassification of employees as independent contractors. Acosta withdrew Weil’s guidance on the topic but hasn’t replaced it with his own interpretation.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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