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Status Update: Minimum Wage & Overtime Executive Orders

After Donald Trump won the November presidential elec- threshold for the white collar worker exemption, holding
tion, President Obama’s labor and employment legacy was that any salary threshold for purposes of the exemption vio -
left seriously in doubt, in part because Trump promised lated the intent of the FLSA. The DOL is appealing this rul -
during the campaign to undo most of Obama’s executive ing, and has obtained an expedited hearing request from the
orders—and arguably, Trump’s promise could extend to over- Fifth Circuit Court of Appeals, but there will not be a hearing
turning Obama’s regulations attempting to raise the mini- until after Trump has been sworn in on January 20. Simply
mum wage and paid sick leave for federal contractors, as well put, the new administration could, by then, reverse the exec-
as his order to raise the salary threshold for the white collar utive order and the appeal would be moot. However, one of
employee overtime exemption. the nice things about having a salary threshold for purposes
There are a number of ways that Trump and Republicans of the white collar worker exemption is that it gives busi -
can undo these initiatives. First, Trump has appointed nesses an easy-to-meet benchmark (as long as the threshold
Andrew Puzder, the chief executive of the CKE Restaurants, is reasonable).
which operate the fast food chains of Hardee’s and Carl’s Third, with regard to President Obama’s executive order
Jr. Pudzer has been a loud critic of state and federal efforts raising the federal minimum wage for federal contractors
to raise minimum wages and extend overtime. He believes (including ski areas on USFS land), Congress passed a tem -
that higher minimum wages hurt smaller businesses and porary government funding bill on December 9, 2016, which
lead businesses to find ways to automate low-skilled jobs continues previous riders in appropriations bills that prohib-
(McDonald’s, for example, is developing self-service kiosks ited federal agencies from implementing or enforcing this
at some restaurants in high minimum wage states to avoid higher minimum wage. This short-term government financ-
these higher costs). Puzder is also a vocal opponent of the ing bill continues until April 28, and in that interim, federal
Affordable Care Act. Simply put, with his appointment, busi- agencies will be prohibited from seeking to insert this $10.10
nesses are likely to have fewer DOL audits, and a more busi - minimum wage clause into special permits. By then, Trump
ness-friendly approach to regulations involving minimum will likely have acted in some fashion to reverse this exec-
wage, overtime, and paid sick leave. However, we will likely utive order, as well as Obama’s executive order requiring
see a shift to states to push higher minimum wages, paid sick seven days of paid sick leave for federal contractors (includ -
leave, and more overtime for workers, since a Trump adminis - ing ski areas on USFS land).
tration is going to be opposed to such measures. One important caveat: The Trump administration is
Second, on November 22, a federal judge in Texas tem - unlike any this country has ever experienced. It will be a fluid
porarily enjoined Obama’s executive order raising the salary environment politically, so stay tuned.—DB

If a ski area offers extensive summer operations (e.g., an establishment engages only in activities such as maintenance
mountain biking, zip lines, concerts, and weddings), it operations or ordering supplies during the dead season, it is not
becomes harder to meet this test. Again, it’s based on considered to be operating for purposes of the exemption.”
monthly operations, so if the area is closed in April, May,
September, October, and November—but open in June, What strategies come into play with
July, and August—it may nevertheless satisfy this test. the two-thirds receipts test?
Again, these tests are very fact-intensive for each business. On its face, this test appears confusing, but some basic
Even if a ski area is generating revenues in the off-season understandings will help many ski areas satisfy this test.
through, for example, a season pass promotion in May, this still First, the test is based on a calendar year, not a fiscal year.
likely would not constitute that the business was operating for That means your CFO or accountant should look at the pre-
purposes of this test, since the ski area is closed to the public. vious calendar year, and break out each month’s receipts
One key to understanding this exemption is that even if a and compare the six highest months with the six lowest
ski area maintains a year-round staff (like an HR director, lift months. The months do not need to be consecutive. In other
maintenance, marketing, and other operational employees), words, typically for ski areas, you could look at November,
that does not undermine the test. The DOL has stated that “if December, January, February, March, and maybe May or

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