American Ukase?

 
 
 


An “ukase” (Russian: ukaz ) in Tsarist Russia was a proclamation of the tsar (sometimes transliterated as “czar”), that had the force of law. Its connotation among English speakers is that of an arbitrary, authoritarian decree. In recent United States history, some Presidential executive orders seem the equivalent of that connotation. His ability to issue such decrees is what President Obama meant with his “I have a pen and I have a phone” indicating he would implement policies he favored without Congressional action.

The federal courts, including the United States Supreme Court, have taken a dim view of a number of ukases emanating from this administration, including those affecting immigration and some environmental regulations. The most recent slapdown came this past week from U. S. District Judge Amos Mazzant of the Eastern District of Texas.

In March 2014, the President directed the Secretary of Labor to “modernize and streamline the existing overtime regulations for executive, administrative, and professional employees.” This has been known as the “EAP” or “white-collar” exemption, whereby employees are exempt from having to pay salaried employees with such duties overtime rates for hours worked in excess of 40 per week. As a result, in May 2016 the Department of Labor issued a “Final Rule” increasing the minimum salary level for exempt employees from $455 a week to $921 per week or $47,892 annually — doubling the threshold. There were estimates that over four million employees would be affected.

Needless to say, many businesses, and business organizations, were distressed by this new rule. For one thing, flexibility in assignment of many employees with managerial duties would be lost. Some businesses have varying or seasonal degrees of busyness, and are really paying their employees for accomplishing a task, rather than merely putting in time. Many employees were not happy about it either. Being a salaried, rather than hourly, employee gives a certain higher status to many workers. Status is important to the motivation and morale, as well as to an employee’s self-image. Many in academia might pooh-pooh, but, of course they have it. Like money, status becomes less important when one has it. Furthermore, flexibility in taking occasional time off during the workday for personal and other non-business-related activities without having to worry about being docked is a benefit of being a salaried employee.

Nevertheless, one may argue as to whether a legally mandated number of hours in a workweek is good policy — I happen to believe it is not — that a government should impose on private businesses. What appears to be abundantly clear is that an executive department decree, without authority from a legislative body, in this case United States Congress, should be permissible at all. It amounts to an ukase, which is a hallmark of a dictatorship or absolute monarchy, not that of a democratic republic.

Believing that the President and the Department of Labor lacked the Constitutional and statutory authority to issue this regulation, twenty-one states, a number of businesses, and business organizations filed suit in the United States District Court for the Eastern District of Texas challenging the Final Rule. These plaintiffs also sought an emergency preliminary injunction prohibiting enforcement of the Rule pending full adjudication on the merits of the suit.

In State of Nevada, et al vs. United States Department of Labor, et al (docket number 4:16-CV-00731, U.S. District Court Eastern District of Texas, memorandum opinion and order, 11/22/2016, available at many sites online) Judge Mazzant, in a 20 page opinion, carefully analyzed the text of the federal labor standards act, and the Department of Labor’s new regulation together with the contentions of the Plaintiffs and Defendants. The court concluded that the Department of Labor probably lacked statutory authority to define the exemptions in terms of salary level. The law, as passed by Congress, only gave authority to define the exemption in terms of job function. The court also found that the other requirements for issuing a temporary injunction were met, and thus restrained the Department of Labor and the executive branch from enforcing the new rule pending a full trial on the merits.

Because of the political situation, and the advent of a new administration and Congress, this Final Rule is probably a dead letter. Under the Administrative Review Act, Congress is set to disapprove the regulation, and the new President is unlikely to veto that disapproval. Anyway, there will be a new Secretary of Labor, who will doubtless have less enthusiasm for social engineering under the guise of regulating business.

One of the opposition points to the Final Rule was that, rather than paying overtime rates to employees that would otherwise be exempt under the work duties test, employers would limit their hours rather than paying them for overtime. The Department of Labor’s response was that, then they will have more time off to spend on other pursuits. As far as that goes, the current czar, oops, I mean Secretary, as well as the President, in less than two months will have an abundant amount of time to spend on other pursuits. I wish them well.

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