On October 2, 2008, the Department of Labor, Office of Labor-Management Standards (”OLMS”), published a Final Rule that increases annual financial disclosures required of unions by the Labor-Management Reporting and Disclosure Act (”LMRDA”).  

The new Final Rule implements Form T-1, entitled the Trust Annual Report.  Form T-1 requires a covered labor union to provide financial information about various “trusts” affiliated with the union, such as assets, liabilities, receipts and disbursements.  Form T-1 will give employees and employers a more robust picture of a union’s financial situation. 

The new Final Form T-1 Rule only applies to labor unions with total annual receipts of $250,000 or more.  This limited scope continues OLMS’s recent history of targeting larger unions for increased financial transparency.  In addition to the new Form T-1 Final Rule, OLMS recently increased the amount of disclosure in the Form LM-2 filled out by large unions and established procedures for revoking a small union’s privilege of filing the streamlined LM-3 financial disclosure form.  OLMS explained that these changes are meant “to deter potential misuse of union trusts that have occurred in the past and allow union members to know exactly where their hard-earned dollars are being spent.”

In order for an organization or fund trigger a labor union’s duty to file a T-1, the organization or fund must (1) be established by the labor union or have a governing body that includes at least one member appointed or selected by the labor union, (2) one of the trust’s primary purpose must be to provide benefits to the members of the labor union or their beneficiaries, and (3) the labor union, alone or in combination with other labor unions, must appoint or selects a majority of the members of the trust’s governing board or the labor union’s contribution to the trust, alone or in combination with other labor unions, represents more than 50% of the trust’s receipts. 

The Form T-1 final rule will take effect on January 1, 2009.

On September 17, 2008, the House Education and Labor Subcommittee on Workforce Protections held a hearing entitled “Secret Rule: Impact of the Department of Labor’s Work Health Risk Assessment Proposal.”  The hearing examined a proposal from the Department of Labor’s Office of Policy to change and codify the risk assessment process, by which agencies evaluate if exposure to a toxic material poses a significant risk.  Agency decisions about whether to regulate a toxic material take into account risk assessments, as well as whether proposed regulations are technologically and economically feasible. 

This proposed rule has been referred to as the “secret rule” because it was not included in the Department of Labor’s semiannual regulatory agenda, was not originally published in the Federal Register, and the documents or advice that formed the basis of the proposed rule have not been disclosed.

Leon Sequeira, Assistant U.S. Labor Secretary for Policy, testified that the proposed rule merely codifies existing risk assessment best practices into a single easy-to-reference regulation.  The proposed rule would institute two new requirements: (1) agencies developing a health standard regulating occupational exposure to a toxic substance or hazardous chemical would be required to issue an Advanced Notice of Proposed Rulemaking (ANPRM) soliciting input including scientific studies and data, and (2) agencies would be required to post online documents relied upon in developing the risk assessment no later than fourteen days after the conclusion of the relevant rulemaking step that utilized those documents.

Randel Johnson, Vice President of the U.S. Chamber of Commerce, also spoke favorably about the proposed rule.  Johnson pointed out that because courts give risk assessments of federal agencies significant deference, it is important that the initial risk assessment is accurate.  Johnson stated that requiring an ANPRM would not necessarily slow down the regulatory process, but it would allow agencies to gather all relevant data and perfect the risk assessment as early as possible in the process.

Dr. Celeste Monforton of The George Washington University School of Public Health and Margaret “Peg” Seminario, Director of Occupational Health and Safety at AFL-CIO, both testified against the proposed rule.  Monforton characterized the current procedures for issuing occupational health-protective rules as “paralyzed,” and argued that the proposed rule would make it even more difficult and time-consuming to issue such protections.  Seminario argued that the current administration has consistently refused to set any new occupational health standards, but is now rushing to lock in place these new procedures to make it more difficult for the next administration to protect workers from known health risks. Seminario also pointed out that the proposed procedures would apply to rules currently in the regulatory process, none of which have had ANPRMs, but which would now be required.  Seminario also emphasized that even though the proposed rule would require the online publication of documents relied upon in formulating rules, the Department of Labor has yet to publish any of the documents it relied upon in formulating the so-called “secret rule.”

Subcommittee Chair Woolsey (D-CA), Rep. Payne (D-NJ), and Rep. Hare (D-IL) all asked the panel questions indicating their disapproval of the proposed rule.  In her concluding remarks, Chairwoman Woolsey announced her continued commitment to protecting the health of American workers by making sure that “any ill-conceived proposal will not see the light of day - particularly this one.”

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued a new directive to provide guidance to employers when filling out their Employer Information Report, or EEO-1.  Certain private employers and federal government contractors are required to file an EEO-1 report annually, which details its employees’ job categories, race, ethnicity, and gender.

In November 2005, the EEOC, in conjunction with the OFCCP, finalized a revised EEO-1 report form, which contains different descriptions of race, ethnicity, and job categories.  For instance, while the old EEO-1 plan provides a race and ethnicity category for “Hispanic,” the revised form includes a category for “Hispanic or Latino.”  The OFCCP’s new directive is an attempt to reconcile the revised EEO-1 report and the now-outdated OFCCP regulations that have not yet been changed to reflect the new EEO-1 categories.

The new directive clarifies that federal contractors will not be cited for noncompliance for using either the old or new EEO-1 race and ethnicity categories when preparing their affirmative action plans and provides further guidance on the use of the new categories in specific affirmative action plan requirements such as workforce, job group, utilization and other analyses.

The filing deadline for the EEO-1 report is September 30, 2008.

On August 29, 2008, the DOL’s Office of the Assistant Secretary for Policy issued a notice of proposed rulemaking (NPRM) that changes the methods used to measure workplace exposure to toxic substances and hazardous chemicals. Under this proposed rule, agencies must seek out and receive all relevant data before proposing a health standard. 

In particular, the proposed rule makes two significant changes to the existing regulations:

• When developing a health standard regulating occupational exposure to a toxic substance or hazardous chemical, agencies must issue an Advance Notice of Proposed Rulemaking (ANPRM) soliciting input on studies, scientific information, data describing the frequency, intensity and duration of exposure of workers in affected industries and occupations, key default factors and assumptions, and other relevant information.
• Agencies must post electronically all documents relevant to a rulemaking addressing occupational exposure to toxic substances and hazardous chemicals no later than fourteen days after the conclusion of the relevant rulemaking step that relied upon or utilized those documents. The rulemaking steps include, but are not limited to, publishing an ANPRM, concluding the Small Business Regulatory Fairness Act (SBREFA) process, publishing of the NPRM, concluding any public hearing, and publishing a final rule.

The Office for the Assistant Secretary for Policy has also asked for public comments in connection with this proposed rule. The comment period will remain open until September 29, 2008. Comments may be submitted in two ways:  1) post the comments electronically through the Federal eRulemaking Portal at http://www.regulations.gov/ or 2) mail or hand deliver to the Office of the Assistant Secretary for Policy, 200 Constitution Ave., NW, S-2312, N.W., Washington, D.C., 20210, Attention: Risk Assessment Policy. 

Core Provisions: Rep. Miller (D-CA), along with eleven Democratic co-sponsors, introduced legislation on July 30, 2008 that would prohibit the Secretary of Labor from issuing, administering, or enforcing any rule, regulation, or requirement derived from a proposal submitted to the Office of Management and Budget (OMB) entitled “Requirements for DOL Agencies’ Assessment of Occupational Health Risks.”

The draft rule reportedly changes the process Department of Labor (DOL) agencies follow when preparing risk assessments related to health standards governing occupational exposure to toxic substances and hazardous chemicals by challenging OSHA’s current assumptions that there is no threshold carcinogen exposure below which the cancer risk is zero, and that permissible exposure levels should be based on exposure to a toxin over a career lasting 45 years.

The proposed bill comes after Rep. Miller and Sen. Kennedy (D-MA) sought documentation related to the rule’s development after the rule was referenced on the OMB website despite the fact that it was not included in the DOL’s semiannual regulatory agenda. The proposed rule has not yet been published in the Federal Register.

Status:  Rep. Miller’s legislation, the “Prohibiting the Department of Labor’s Secret Rule Act of 2008″ (H.R. 6660) has been referred to the House Committee on Education and Labor.

On July 28, 2008, the Department of Labor (”DOL”) announced a Notice of Proposed Rulemaking to revise existing regulations under the Fair Labor Standards Act (”FLSA”). Billed as “clean-up” amendments, the new rules are an attempt to bring the regulatory regime into accord with new judicial and legislative developments. The proposed rules are the culmination of a decade-long initiative begun in 1996.

The proposed rulemaking would change the existing FLSA regulations in a number of ways:

Tips credits. The FLSA allows employers to use the money an employee receives in tips to count towards that employee’s total compensation for minimum wage purposes.  The proposed rules would incorporate 1974 and 1977 amendments to the FLSA’s tip credit provisions. Specifically, the proposed regulations specify that an employer could not take a tip credit unless “(1) [its] employee has been informed by the employer of the provisions of this subsection and (2) all tips received by such employee have been retained by the employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.” The proposed regulations would also allow an employer to claim credit against wages for the reasonable cost of providing employees with meals and may require their acceptance as a mandatory condition of employment.

Compensatory Time. In 1985, Congress changed the FLSA to allow public sector employees to receive compensatory time instead of overtime payments. Compensatory time can be used as leave; a typical compensatory time arrangement allows an employee to take every other Friday off if that employ accrues nine hours of overtime every two weeks. The proposed regulations would incorporate several Courts of Appeal decisions interpreting compensatory time. Specifically, the regulations outline an employer’s duty to grant an employee compensatory time off “within a reasonable period after [the employee] mak[es] the request” if the use of compensatory time does not unduly disrupt the agency’s operations.

Commute Time. The proposed regulations define certain circumstances when pay is not required for employees who use vehicles provided by their employers for home-to-work commuting purposes. Specifically, travel time is to be considered noncompensable if the use of the vehicle is ‘‘conducted under an agreement between the employer and the employee or the employee’s representative.” The agreement may be a formal written agreement, a collective bargaining agreement, or an understanding based on established industry or company practices.

Youth Opportunity Wage. The proposed regulations would also incorporate a youth opportunity wage that allows an employer to pay an employee under 20 years of age a minimum wage of $4.25 per hour during the employee’s first 90 consecutive calendar days of initial employment with the employer. The amendment also protects current workers by prohibiting employers from taking action to displace employees, including reducing hours, wages, or employment benefits, for the purpose of hiring workers at the opportunity wage.

Salesmen Exemption. The proposed regulations would incorporate developments in the salesmen exemption to the FLSA. Generally, salesmen are exempt from the FLSA’s overtime requirements. The proposed regulations would incorporate a 1974 Congressional amendment to extend the overtime exemption to include any salesman primarily engaged in selling boats and eliminated the overtime exemption previously provided for partsmen and mechanics servicing trailers or aircraft. The proposed regulations would also change the language to include “any salesman, partsman, or mechanic primarily engaged in selling and servicing automobiles.”

Minimum Tipped Wage. The proposed regulations would establish the minimum cash wage required to be paid to tipped employees at $2.13 per hour and would limit the allowable hourly tip credit to the difference between $2.13 and the applicable minimum wage required by section 6(a)(1) of the FLSA.

Agricultural Workers on Water Storage/Irrigation Projects. The proposed regulations would expand an existing FLSA overtime pay exemption for workers on ditches, canals and reservoirs to cover employees who spend 90 percent (rather than 100 percent) of the water is used for agricultural purposes.

Food Bank Workers. The proposed regulations would incorporate a 1998 amendment to the definition of “employee” that excludes individuals who volunteer solely for humanitarian purposes to private non-profit food banks and who receive groceries from those food banks.

Firefighters. The proposed regulations would add a new definition for employees engaged in “fire protection activities.” The new definition would include “a firefighter, paramedic, emergency medical technician, rescue worker, ambulance personnel, or hazardous material worker, who-(1) is trained in fire suppression, has the legal authority and responsibility to engage in fire suppression, and is employed by a fire department of a municipality, county, fire district, or State; and (2) is engaged in the prevention, control,  and extinguishment of fires or response to emergency situations where life, property, or the environment is at risk.”

Stock Options Not Part of Regular Rate. The proposed regulations would specify that stock options meeting certain criteria were an additional type of remuneration that could be excluded from the regular rate when computing overtime pay.

Higher Minimum Wage. The proposed regulations would reflect the current tiered increase minimum wage: $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.

Fluctuating Workweek. The proposed regulations clarify the regulations governing the “fluctuating workweek” method of computing overtime pay for salaried nonexempt employees whose weekly work hours vary or fluctuate, and who receive a fixed salary as compensation (apart from overtime premiums) for whatever hours they are called upon to work in a workweek, whether few or many. The proposed clarifying revision would eliminate language that discourages employers from paying bonuses or premium payments in addition to salary (e.g., nightshift differentials or hazard pay) by sometimes invalidating the fluctuating workweek method of overtime computation where such payments are made.

The DOL will be accepting comments on the proposed regulations until September 11, 2008.

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has launched two initiatives to aid veterans seeking jobs.

The first initiative, called Ensuring the Accessibility of Online Application Systems, is designed to ensure that federal contractors provide equal opportunities to qualified applicants with disabilities to compete for jobs when using an online application system. Electronic job application systems must be accessible to and usable by applicants who have disabilities. If the online systems are not accessible, the contractor must provide a reasonable accommodation that allows an equal opportunity to compete for a job, unless such an accommodation would cause undue hardship. All OFCCP compliance evaluations will now include a review of the contractor’s online application systems and whether reasonable accommodations are made when requested. Where a complaint is filed involving a federal contractor’s online application system, OFCCP will investigate the complaint rather than referring it to the EEOC.

The Good Faith Initiative for Veterans Employment (”G-FIVE”), creates an incentive for federal contractors to increase their employment of and affirmative action for covered veterans under the Vietnam Era Veterans’ Readjustment Assistance Act (”VEVRAA”) by creating factors by which a contractor can earn recognition as a G-FIVE contractor. Contractors that qualify for a G-FIVE rating will be excluded from an OFCCP compliance evaluation for three years following the date the recipient receives the rating.  Some factors include:

• Evidence of covered veterans in the contractor’s labor force;
• Evidence of an increase in the number of covered veterans in the contractor’s labor force;
• Number of partnerships with local veterans’ service organizations to employ or advance covered veterans;
• Recruitment efforts at educational institutions to reach students who are covered veterans;
• Number of job advertisements in the local community targeting veterans;
• Number of on-the-job training opportunities for covered veterans.

Based on the outcome of a full compliance review, each year the Regional Director will recommend contractors to the National Office that have demonstrated outstanding achievements in the employment of covered veterans.  Contractors may also self-nominate for recognition.

The three-year exclusion from OFCCP compliance evaluations will not apply where a complaint or investigation by the EEOC or a state agency suggests equal employment opportunity issues that warrant an evaluation.

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 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 19, 2008, the Department of Labor issued a final rule changing the annual reporting requirements for veterans hiring by federal contractors. The rule was part of the implementing regulations for the Jobs for Veterans Act (”JVA”) (Pub. L. 107-288, 116 Stat. 2033).

Passed in November 2002, the JVA amended the Vietnam Era Veterans’ Readjustment Assistance Act by changing the substantive criteria for determining veterans’ eligibility and by changing the procedural mechanism federal contractors must use to comply with the law. The JVA increased the threshold amount for qualifying contracts from $25,000 to $100,000. In addition, the JVA eliminated presumptive coverage of Vietnam-era veterans and expanded coverage to include (1) “veterans who, while serving on active duty in the Armed Forces, participated in a United States military operation for which an Armed Forces service medal was awarded;” (2) veterans who had been discharged or released from active duty within the past three years; and (3) veterans who were discharged or released from active duty because of a service-connected disability.

Under the new rule, federal contracts entered into on or after December 1, 2003 will be governed by the new 41 C.F.R. § 61-300.  Contracts entered into after that date worth more than $100,000 will require an annual filing of the new VETS-100A form with the DOL’s Veterans’ Employment and Training Service (”VETS”).  Older contracts will continue to be subject to the old 41 C.F.R. § 61-250, which requires filing of the VETS-100 form for any contract of $25,000 or more.

VETS acknowledges that the new rule will require some contractors to file both the old and new forms, but asserts that such a result is mandated by the statutory language.  VETS estimates that less than twenty percent of current contractors will have dual filing requirements.

Federal contractors covered by the JVA must file their first VETS-100A annual report by September 30, 2009.  Because the VETS-100A annual report requires federal contractors to collect data for the preceding 12-month period, covered contractors must start compiling information for the newly covered veterans starting October 1, 2008.