On May 22, 2008, the Employment and Training Administration (ETA) of the Department of Labor (DOL) published proposed regulations that would amend the process for obtaining temporary, nonagricultural foreign employees under the H-2B program. The proposed changes would streamline the H-2B visa process and give the DOL a role in the enforcement of the H-2B process. 

Under § 101(a)(15)(H)(ii)(b) of the Immigration and Nationality Act (INA), an H-2B worker is a nonimmigrant admitted to the U.S. on a temporary basis to perform temporary nonagricultural labor or services. Employers seeking to obtain H-2B visas have to fulfill a two-step process. First, they have to secure a DOL certification that there are not enough able and qualified U.S. workers available for the position and that the employment of the foreign workers would not adversely affect the wages and working conditions of similarly employed U.S. workers. Second, once they have obtained a certification, employers have to work with the Department of Homeland Security (DHS) to obtain the H-2B visa.

Under the proposed rule, employers would attest that they had complied with all H-2B program requirements, but would not have to submit documentation supporting their recruitment efforts.  However, employers would be required to retain evidence of such efforts for five years from the date of certification. Employers would also be subject to fines and other penalties, including program debarment, for failing to comply with all H-2B program requirements. This process would replace the current process where employers must receive certification from the relevant state workforce agency that the program requirements have been satisfied.

The proposed rule also eliminates the duplication of effort between state workforce agencies and ETA. Employers would file H-2B applications directly with ETA rather than filing with the state workforce agencies first. In addition, employers would obtain applicable prevailing wage determinations for their specific job opportunities directly from the DOL rather than from the state workforce agencies. 

The proposed rule enhances protection for U.S. and foreign workers. Employers would be prohibited from passing on to H-2B workers the costs associated with participation in the program, including application and recruiting costs and attorney fees. 

Finally, the proposed regulations describe a potential DOL enforcement role in ensuring that employers comply with the H-2B provisions. In 2005, Congress vested DHS with H-2B enforcement authority. The proposed regulations contemplate the “DHS and the Department [of Labor] work[ing] out a mutually agreeable delegation of enforcement authority from the DHS to the Department [of Labor].” If an agreement is reached, the DOL Wage and Hour Division would be authorized to assess civil fines of up to $10,000 per violation for willful violations and refusal to cooperate in DOL audits or investigations.

Employers or interested persons who wish to comment on the proposed regulations must do so by July 7, 2008. If parties wish to comment on the proposed draft forms included in the proposed rule, then they may do so until July 21, 2008.

On May 21, 2008, Rep. Andrews (D-NJ) introduced the Employee Misclassification Prevention Act (H.R.6111), which would amend the Fair Labor Standards Act (FLSA) to penalize employers who misclassify workers as independent contractors. 

The legislation would impose a maximum fine of $10,000 per violation for an employer who “repeatedly or willfully” failed to accurately classify a worker. Furthermore, where an employer’s misclassification accompanied violations under the FLSA’s maximum hours or minimum wage requirements, a worker could recover double his or her liquidated damages.

Under the legislation, employers would be required to keep records of workers’ employment or independent contractor classification. The bill would also require employers of individuals classified as “non-employees” to notify them in writing of (1) their classification, (2) that their rights to “wage, hour, and other labor protections” depend upon proper classification, and (3) directing them to the Department of Labor if they suspect they have been misclassified or need further information.

The Employee Misclassification Prevention Act would also strengthen classification monitoring by requiring state unemployment insurance agencies to conduct audits and establish penalties for employers who misclassify employees, or fail to properly report or record their compensation for unemployment compensation purposes. Meanwhile, the Secretary of Labor would be directed to ensure that at least 25 percent of the Wage and Hour Division’s audits are focused on potential misclassifications, with an auditing focus on employers in those industries that most frequently misclassify employees as non-employees.

Several unions and employee rights groups have endorsed the legislation, which has 23 cosponsors and has been referred to the House Committee on Education and Labor and the House Ways and Means Committee.

The recent enactment of the Genetic Information Non-Discrimination Act (H.R. 493), which passed both houses of Congress by overwhelming margins and was signed by President Bush on May 21, 2008, also included separate provisions increasing penalties against employers who violate child labor laws. These provisions, which amended the Fair Labor Standards Act (”FLSA”), increased the penalty from $11,000 to $50,000 for each FLSA violation leading to the serious injury or death of a child worker. Further, the increased fines are subject to doubling for repeated or willful violations.

Prior to their inclusion in the Genetic Information Non-Discrimination Act, the child labor provisions were contained in H.R.2637, a bill introduced by Rep. Lynn Woolsey (D-CA) and passed by the House via voice vote in June 2007.

On May 20, 2008, the Senate Health, Education, Labor, and Pensions Committee (”HELP Committee”) held a hearing over pending legislation that would provide additional worker protections and toughen employer penalties under the Worker Adjustment and Retraining Notification Act (”WARN Act”).

Introduced in the Senate (S.1792), The Forewarn Act of 2007 would require companies to provide notice 90 days in advance of large layoffs or plant closures, a 30-day increase from the current WARN Act requirements. The House version of the Trade and Globalization Assistance Act of 2007 (H.R.3920), which passed the House on October 31, 2007, contained comparable language amending the WARN Act.

The additional notice is intended to give displaced workers additional time to search for new jobs and seek out available benefits, including job training and unemployment insurance. S.1792 also stiffens penalties for employer violations of the notice requirement, gives the Department of Labor enforcement powers, and covers additional employers currently exempt from WARN Act requirements.

AFL-CIO Secretary-Treasurer Richard L. Trumka testified in favor of S.1792, noting the bill’s removal of “loopholes” used by employers to circumvent current WARN Act requirements “with impunity.” Although Trumka praised the proposed lengthened notice period and increased penalties, he contended that a six month-notice period for layoffs and closures would be preferable.

John Philo, legal director for the Sugar Law Center for Economic and Social Justice in Detroit highlighted perceived problems with the current WARN Act, which he claimed provides inadequate coverage and penalties. Philo urged a 120-day notice period for plant closings and layoffs.

The testimony of Joe Aguiar, a laid-off fabric company employee, illustrated alleged current deficiencies in WARN Act enforcement. Aguiar described being laid off without notice after his plant was unexpectedly shuttered. Aguiar, a class representative in a WARN suit against his former employer, noted that he and his fellow employees stand to gain only 60 days of backpay and benefits if they prevail.

Testifying against S.1792, Baltimore-based attorney Stefan Jan Marculewicz explained that the bill would lead to “significant hardship” for small businesses, which often lack the financial wherewithal to continue operations or maintain the current level of their workforces for 60 to 90 days. Marculewicz urged the Senate panel to avoid the punitive aims of S.1792 and approach the issues of plants closings and worker displacement by getting at root causes, such as improving workforce training and job creation.

On May 5, 2008, the DOL published its semi-annual regulatory agenda and highlighted two items to be undertaken by the Employment Benefits Security Administration (EBSA) in the remainder of 2008. 

First, EBSA intends to publish a final rule in November 2008 concerning when employee benefit plan contributions paid to or withheld by an employer constitute “plan assets” for ERISA and tax code purposes. Under the current Plan Assets-Participant Contributions regulation, all employers must forward employee contributions to pension plans as soon as they can reasonably be segregated from the general assets of the employer, but no later than the 15th business day of the month following the month in which the contributions are received or withheld by the employer.     

Under the proposed safe harbor amendment published on February 29, 2008, contributions to a “small” benefit plan (a plan with fewer than 100 participants) will be treated as having been made to the plan “on the earliest date on which such contributions can reasonably be segregated from the employer’s general assets” when contributions are deposited with the plan no later than 7 business days after the day on which the amount was received by the employer or withheld by the employer from the participant’s wages. The public comment period for this proposed regulation closed on April 29, 2008.  Public comments may be reviewed on the DOL website.

Second, EBSA intends complete by December 2008 a review of the existing Plan Assets-Participant Contributions regulation, 29 C.F.R. § 2510.3-102, to examine, among other things: (1) the continued need for the rule; (2) the nature of the comments received from the public regarding the rule; (3) the complexity of the rule; and (4) the extent to which the rule overlaps, duplicates or conflicts with other federal, state, and local rules. The review is being undertaken under section 610 of the Regulatory Flexibility Act, 29 U.S.C. § 1135, which requires periodic review by agencies of rules “which have or will have a significant economic impact upon a substantial number of small entities” to determine if a rule should be continued without change, amended, or rescinded.  EBSA’s review commenced in March 2006.

On May 21, 2008, OSHA announced its Site-Specific Targeting (‘SST”) program for 2008. The SST program is part of OSHA’s programmed inspection plan for non-construction workplaces with 40 or more employees. OSHA implements a new SST program every year.

This year’s SST program adopts the same provisions as last year’s program, but with the following significant changes:

• OSHA increased the number of establishments it will randomly select and inspect from 100 last year to approximately 175 this year. OSHA will select establishments from industries that have a DART rate (days away from work, restricted work activity, or job transfer for every 100 full-time employees) and DAFWII rate (days away from work injury and illness) above the national average;
• The threshold DAFWII rate to qualify for the Secondary List of programmed inspections will change from between 4.0 and 9.0 to between 5.0 and 9.0. The DART rate to qualify for the Secondary list will remain at between 7.0 and 11.0. The threshold rates to qualify for the Primary List will remain at a DART rate at or above 11.0, or a DAFWII rate at or above 9.0;
• OSHA now requires each area office to use a web-based application to create SST inspection cycles and to update the inspection lists; and
• To obtain a 90-calendar day deferral, an establishment must request an initial full-service comprehensive consultation visit for safety and health. In 2007, an establishment only had to request a consultation for safety or health.

On May 21, 2008, President Bush signed the Genetic Information Nondiscrimination Act (H.R. 493) into law. The bill prohibits employers from discriminating against employees on the basis of genetic information in hiring, firing, and other activities. It also prohibits health insurers from discriminating against individuals on the basis of genetic information and is intended to encourage individuals who might otherwise fear genetic discrimination to seek potentially beneficial genetic testing.

The Senate unanimously passed the bill on April 24 and the House of Representatives followed suit on May 1 by a vote of 414-1.

On May 15, 2008, NLRB General Counsel Ronald Meisburg issued a memorandum describing the Board’s application of the holding in The Guard Publishing Company, d/b/a The Register-Guard, 351 NLRB No. 70 (Dec. 16, 2007) (”Register-Guard“). In Register-Guard, the Board determined that an employer who prohibited the use of the employer’s email system for non-job-related solicitations did not violate section 8(a)(1) of the National Labor Relations Act (”the Act”) when it applied this rule to Section 7 activity. The Board majority held that an employer’s email system is company property that employees have no statutory right to use.

After Register-Guard, Regional Officers were directed to submit discrimination cases involving company property to the Division of Advice. The Division of Advice reached the following determinations:

• An employer did not violate the Act by enforcing a rule that barred union officials from sending emails to company managers outside of the facility. The union used the company’s email system to send broadly distributed emails to company managers outside the facility. The Division determined that the company’s rule was lawful because it concerned how the union was permitted to use the employer’s email system and did not otherwise prohibit the union from engaging in protected communications.
• An employer’s rule that prohibits solicitation for any purpose during work hours was unlawful when applied to union activity. The employer inconsistently enforced this policy by permitting non-union-related solicitation activity including institutional and individual commercial solicitations, school fundraising solicitations, and personal solicitations. The Division reasoned that an employer may not discriminatorily enforce a facially valid no email solicitation rule.
• A rule that was re-promulgated after union organizing activities began at the employer’s site was a violation of the Act. After an employee sent emails about a union meeting, the employee was disciplined for misusing the employer’s email system. Prior to sending the email, the employee checked with the employer’s IT director to determine what is considered abuse of the employer’s computer system. The IT director did not inform the employee that personal email or email solicitation was against employer policy. The case initially settled after an investigation revealed that the employee was disciplined because of union activity. Subsequently, the employer again disciplined the same employee for sending another email with union-related content. The Division concluded that the employer re-promulgated its email rule for anti-union reasons, and discriminately enforced the rule against union activity.
• An employer violated the Act when it discriminatorily enforced its electronic communications policy against an employee. The employer terminated the employment of an employee after the employer learned that the employee was the author of an email sent to the employer’s Board of Directors that listed concerns that employees had about working conditions. The employer alleged that the employee was terminated for inappropriately using the employer’s computers in violation of its policy. The Division found that the employer unlawfully discharged the employee for engaging in protected activities. The Division noted that the employer’s email policy allowed reasonable personal use of the employer’s computer and the employer permitted employees’ use of the internet, email, and other company equipment for personal purposes. Thus, the Division concluded that the employer disparately enforced its email policy.
• An employer violated the Act when it discriminatorily prohibited use of its employee bulletin board. A union organization event was held at one of the employer’s stores during which union material was placed on a bulletin board within the store designated for employees. The bulletin board was used for personal and general non-work related matters. The union material was taken down, and the employer later turned the bulletin board into a management only posting site. The Division concluded that the facts established an anti-union motive because the timing of the employer’s conduct and the actions themselves were directly in response to the union activity.

These decisions make clear that, after Register-Guard, the Board will not find an employer’s use of facially valid rules lawful when the facts demonstrate that the employer discriminatorily enforced the rules to prohibit protected activity, or when the employer’s actions are motivated by anti-union animus.

Core Provisions: This Act would amend Title VII, ERISA, and other laws to prohibit employers and health insurers from discriminating against individuals on the basis of genetic information. Under the Act, employers may not discharge, refuse to hire or otherwise discriminate against employees on the basis of genetic information. Further, the Act prohibits health insurers from adjusting premiums on the basis of genetic information, requiring genetic testing or collecting genetic information for underwriting purposes. The Act provides that genetic information includes results of genetic testing of the individual or his/her family members, as well as the manifestation of a disease or disorder in family members of such individual.

Status: On April 10, 2007, Sen. Kennedy (D-MA) from the HELP Committee submitted Report No. 110-48 recommending passage of S.358. The House passed H.R.493 on April 25, 2007.  The Senate unanimously passed H.R. 493, as amended, on April 24, 2008. The House passed H.R.493, as amended, on May 1, 2008 by a 414-1 vote. President Bush signed the amended bill into law on May 21, 2008.

Core Provisions: This act would amend the Fair Labor Standards Act (FLSA) to strengthen enforcement and penalties of employers who misclassify employees as independent contractors. The bill would impose a maximum fine of $10,000 per violation for an employer who “repeatedly or willfully” failed to accurately classify a worker. Where an employer’s misclassification accompanied violations under the FLSA’s maximum hours or minimum wage requirements, a worker could recover double his or her liquidated damages.

An employer would also have to keep records of workers’ employment classification and notify those classified as “non-employees” in writing of (1) their classification, (2) that their rights to “wage, hour, and other labor protections” depend upon proper classification, and (3) directing them to the Department of Labor if they suspect they have been misclassified or need further information.

The legislation would require state unemployment insurance agencies to conduct auditing and investigative programs to detect employers that misclassify or fail to properly report compensation to workers with the effect of excluding employees from unemployment compensation coverage. The Secretary of Labor would also ensure that at least 25 percent of the Wage and Hour Division’s audits would focus on potential classification violations, especially in industries with frequent incidence of misclassifying workers.

Status: H.R. 6111 was introduced by Rep. Andrews (D-NJ) on May 21, 2008, and referred to the House Committees on Education and Labor and Ways and Means.