Beltway Buzz - September, 2017

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

2016 Overtime Rules Invalidated. U.S. District Court invalidates 2016 changes to overtime rules. Steven F. Pockrass has the details here.

OMB to Review and Stay EEO-1 Pay Data Collection. As readers of the Buzz undoubtedly know, we’ve been reporting on rumors of whether the administration would address, in some fashion, the compensation and hours worked reporting requirements of the amended EEO-1 form that the Equal Employment Opportunity Commission (EEOC) and the White House finalized in 2016. So even though the Buzz is on vacation, we’d be remiss in failing to report that on August 29, the Office of Information and Regulatory Affairs (OIRA) indefinitely stayed these requirements while keeping the original EEO-1 in place (to be filed by March of 2018). T. Scott Kelly, Kiosha H. Dickey, and Hera S. Arsen have more here. Hopefully, the stay comes in time before too many employers have invested resources in compliance efforts.

The Buzz thinks this is a sound reading of the Paperwork Reduction Act’s (PRA) requirements for information collections. These standards, which are often brushed aside, have allowed policymakers to enact de facto regulations by amending government forms under the PRA, rather than by going through the Administrative Procedure Act and the protections it provides for the regulated community (such as a private cause of action). It will be interesting to see how—or if—this decision impacts the U.S. Department of Labor’s (DOL) proposed changes to the Labor Condition Application (LCA) for H-1B visas, as well as other matters. Regardless, here’s hoping that OIRA’s actions on EEO-1 will discourage future attempts of this type of policymaking.

Senate Announces Plans to Hold September Bipartisan Hearings on ACA. On Tuesday, August 22, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) announced that the committee will hold two bipartisan hearings in early September, with more to follow. At the first hearing, senators will hear testimony from state insurance commissioners, while at the second they will bring in state governors for their input. In the wake of failed Affordable Care Act (ACA) repeal-and-replace efforts, the immediate goal is to stabilize premiums and shore up the individual private insurance market—the most pressing issues at this time. It is estimated that up to 13 million U.S. residents can procure health insurance only by means of the individual exchanges. In their statements, both senators emphasized the urgency that Congress act by September 27—the date (recently delayed) on which insurers must contract with the federal government in order to participate in the 2018 exchanges. Were a significant number of insurers to choose not to participate—because, for example, government subsidies were nonexistent or too small in 2018—the result could be widespread geographical areas where insurance would be unavailable (although currently all U.S. counties are reported to be covered for 2018), significantly fewer insured individuals, and/or drastically raised premiums for many. After months of bickering and closed-door deals that led nowhere, true bipartisan efforts to accomplish much-needed reforms to the ACA are indeed welcome—if perhaps a bit late. There will surely be more to report on this front in the near future, so watch for continuing developments. (Hat tip to Stephanie A. Smithey, Timothy G. Verrall, and Richard C. Libert.)

2017 Labor and Employment Regulatory Review. With Congress’s August recess coming to a close, we at the Buzz thought it might be helpful to take a look back at the labor and employment policy accomplishments that have been achieved in the first half of the year. Of course, no major piece of legislation was signed into law (with the exception of various Congressional Review Act resolutions, as noted below), with the Republicans’ ignominious failure to address the ACA being the prime example. And while the administration finally landed appointees at the DOL (Secretary Acosta) and the National Labor Relations Board (NLRB) (Marvin Kaplan), there are still many important agency roles that remain vacant. In contrast, the administration has made significant strides in the regulatory arena, using various tools to help ease the regulatory burden on employers. Below is a brief outline of the current labor and employment regulatory landscape.

I. Completely Rescinded Regulations

  • Blacklisting Regulations. These regulations would have required government contractors and subcontractors to report alleged, unproven violations of 14 federal labor and employment laws—“administrative merits determinations” such as NLRB complaints—for consideration by government contracting officers in awarding federal contracts, among other onerous requirements. The regulations were rescinded via Congressional Review Act resolution signed on March 27, 2017.
  • OSHA “Volks” Regulation. This regulation was the Occupational Safety and Health Administration’s (OSHA) attempt to overturn a federal court ruling by unilaterally extending the statute of limitations for recordkeeping violations from six months to five years. The regulation was rescinded via Congressional Review Act resolution signed on April 3, 2017.
  • Savings Arrangements Established by States for Non-Governmental Employees. This regulation would have forced employees into state government retirement accounts with fewer protections and less control over their savings. The regulation was rescinded via Congressional Review Act resolution signed on May 17, 2017.
  • Savings Arrangements Established by Qualified State Political Subdivisions for Non-Governmental Employees. This regulation also forced employees into state government retirement accounts but extended coverage to cities and municipalities, forcing employees into city government retirement accounts with the same problems. The regulation was rescinded via Congressional Review Act resolution signed on April 13, 2017.

II. Completely Rescinded Subregulatory Actions

  • Administrator’s Interpretation on Independent Contractors. On July 15, 2015, then-Wage and Hour Administrator David Weil issued an “administrator’s interpretation” (AI) detailing how workers were to be classified between employees and independent contractors for purposes of coverage under the Fair Labor Standards Act (FLSA). The AI deemphasized the control factor and instead promoted the multi-factor “economic realities” test. This AI was rescinded on June 7, 2017.
  • Administrator’s Interpretation on Joint Employment. On January 20, 2016, the DOL’s Wage and Hour Division issued an interpretation detailing when a joint-employment relationship would exist under the FLSA such that both employers would be liable for violations. The AI stretched the bounds of the law by introducing the concepts of vertical and horizontal joint employment. This AI was rescinded on June 7, 2017.
  • OSHA Walk-Around Letter. This document granted union representatives the right to enter nonunion workplaces when requested by an employee. The document was rescinded on April 27, 2017.

III. New Subregulatory Actions

  • Return of Opinion Letters. On June 27, 2017, the DOL announced that it would once again be issuing opinion letters, a process that allows stakeholders to ask the DOL’s Wage and Hour Division (WHD) to explain, in writing, how federal law would apply in specific circumstances. This cooperative approach to compliance was scrapped in 2010 in favor of generalized Administrator’s Interpretations, so this is welcome news for employers.

IV. Rulemakings Currently Under Way

  • DOL’s Overtime Changes. On July 26, 2017, the DOL published a Request for Information (RFI) relating to the 2016 overtime rule, which had increased the salary threshold for the “white collar” exemptions from $23,660 per year, to $47,476 per year. The RFI is the first step in what will likely be a formal rulemaking process to set the salary basis level somewhere around $33,000.
  • DOL’s “Persuader” Regulation. The final 2016 persuader rule narrowed the scope of the advice exemption so that virtually all interactions with labor lawyers and consultants would be subject to the disclosure requirements. The current DOL began the process of rescinding the 2016 rule on June 12, 2017. Written comments were due by August 11, 2017.
  • DOL’s Fiduciary Rule. The DOL finalized its rule on the definition of “fiduciary” on April 8, 2016. Certain elements of the rule went into effect on June 9, 2017, while other provisions will not take effect until January 1, 2018. At the end of June of 2017, the DOL’s Employee Benefits Security Administration issued an RFI seeking feedback from the public on whether to further extend that January 1 effective date, among other inquiries. The DOL has since proposed extending this deadline to July 1, 2019. Like the overtime RFI, the fiduciary RFI is the first step in what could be a lengthy rulemaking process (though this RFI is a result of President Trump’s executive order from February 3, which ordered a regulatory review of the final 2016 fiduciary rule).
  • OSHA Beryllium Rule. On June 27, 2017, OSHA issued a proposed rule to modify its beryllium regulation for the construction and shipyard sectors. The proposal maintains the lowered exposure limits of the 2016 final rule, but proposes eliminating ancillary provisions relating to exposure monitoring, protective equipment, and medical surveillance, among others. Written comments on the proposed rule were due by August 28, 2017.

V. Delayed Regulations

  • OSHA Tracking of Workplace Injuries and Illnesses. In 2016, OSHA published a rule requiring electronic submission of injury and illness records and online public access to such records. The current OSHA has proposed extending the initial submission deadline of these reports from July 1, 2017, to December 1, 2017. Also, see below for future action on this regulation.
  • OSHA Silica Rule. In 2016, OSHA finalized a rule that lowered the permissible exposure limit for silica in the workplace. On April 6, 2017, OSHA announced that it would delay the enforcement date for compliance by the construction industry from June 23 to September 23, 2017.

VI. Future Rulemakings

  • Wage and Hour Division—Tip Pooling. In August of 2017, the WHD is expected to issue a notice of proposed rulemaking (NPRM) that will propose rescinding the previous administration’s restrictions on tip pooling practices. Obviously, the administration will miss this predicted deadline, which is not uncommon.
  • OSHA Tracking of Workplace Injuries and Illnesses. In addition to postponing until December 1 the date on which certain employers are required to electronically submit their completed Forms 300A, OSHA intends to issue a proposal to reconsider, revise, or remove provisions of the Improve Tracking of Workplace Injuries and Illnesses final rule issued in May of 2016. OSHA intends to issue an NPRM on this subject in October of 2017.
  • Employment and Training Administration—Apprenticeships. Pursuant to President Trump’s recent executive order on apprenticeships, the Employment and Training Administration (ETA) intends to issue regulations to “streamline the Apprenticeship Standards to expedite the registrations approval process, and to establish industry recognized third parties to provide high-quality industry recognized apprenticeship programs and other updates and conforming changes as appropriate.” A NPRM is expected in May of 2018.
  • OSHA—Lockout/Tagout Update. In April of 2018, OSHA will issue an RFI (or hold a stakeholder meeting) to explore how recent technological advancements that employ computer-based controls of hazardous energy will impact OSHA’s existing lockout/tagout standard.
  • Department of Defense, General Services Administration, and National Aeronautics and Space Administration—Anti-Trafficking Provisions. Intended to supplement the final Federal Acquisition Regulation (FAR) anti-trafficking rules for federal contracts and subcontracts, which were finalized in 2015, a final rule defining the prohibited practice of collecting ‘‘recruitment fees’’ will be issued in September of 2017.

VII. Notable Omissions

Thus far, the administration has given no signal one way or the other on how or if it intends to address a myriad of existing labor/employment regulations. Set forth below are some prominent examples:

  • Paid sick leave for federal contractors
  • Increased minimum wage for federal contractors
  • OFCCP-administered requirements regarding hiring of veterans and individuals with disabilities, and LGBT and pay transparency protections
  • Overtime protections for homecare workers
  • FAR anti-trafficking regulations
  • Executive orders and implementing regulations relating to:
    • Nonreimbursement for labor relations costs (EO 13494)
    • Non-displacement of workers under service contracts (EO 13495)
    • Notice of employee rights under labor laws (EO 13496)
    • Project labor agreements for federal construction projects (EO 13502)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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