For a taste of how complex it can be to comply with federal employment law, take a look at this week's opinion from the U.S. Court of Appeals for the District of Columbia Circuit in the case of Mortgage Bankers Association v. Seth Harris.
Mr. Harris is the acting secretary of labor. The case involves whether, under the Federal Fair Labor Standards Act, mortgage loan officers qualify as exempt professionals, or whether they must be paid overtime if they work more than 40 hours a week. From the opinion:
Whether mortgage loan officers qualify for this "administrative exemption" is a difficult and at times contentious question. So difficult, in fact, DOL has found itself on both sides of the debate. In 2006, the agency issued an opinion letter concluding on the facts presented that mortgage loan officers with archetypal job duties fell within the administrative exemption. Just four years later, in 2010, Deputy Administrator Nancy J. Leppink issued an "Administrator's Interpretation" declaring that "employees who perform the typical job duties" of the hypothetical mortgage loan officer "do not qualify as bona fide administrative employees." The 2010 pronouncement "explicitly withdrew the 2006 Opinion Letter."
The opinion was by Judge Janice Rogers Brown, a George W. Bush appointee, who was joined by Judge David Tatel, a Clinton appointee, and senior Judge David Sentelle, a Reagan appointee. It said the labor department can't change its mind like that without going through a more elaborate notice and comment procedure. So at least for now the banks don't have to pay overtime to the loan officers. Had the banks not had a trade association, a legal budget to take the case up to the D.C. Circuit, and the time and energy to fight, they might have been stuck paying overtime on the basis of a basically arbitrary decision by some federal bureaucrat.
Anyone who thinks these rules and dozens of others like them have no effect on job-creation or economic growth in America is kidding himself. Companies would rather outsource tasks to contractors overseas who don't have the burden of complying with such laws.
It's not the first time that a court has struck down Obama administration overreach in labor law enforcement.
