Tag: DOL

DOL Proposes New LCA, H-1B Complaint Form

Following through on its April 3, 2017, announcement that it was considering changes to the Labor Condition Application (LCA), the Department of Labor (DOL) published a notice in the Federal Register on August 3, 2017, of its proposed revisions to the ETA 9035 or LCA. A certified LCA must be included with every H-1B petition filed with the U.S. Citizenship and Immigration Services.  DOL’s Employment and Training Administration posted the proposed LCA on its website saying the changes would “better protect American workers, confront fraud, and increase transparency.” DOL said it would accept comments until Oct. 2, 2017.

The revisions in the form reflect the focus of the Trump Administration on increased enforcement of third-party placement and on H-1B dependent employers. The new LCA asks whether the sponsored worker will be “placed with a secondary employer” and, if yes, asks for the legal name of the secondary employer. The new LCA also requires H-1B dependent employers to complete an additional list of questions set out in an appendix if the sponsored worker is exempt from H-1B dependency obligations. In addition, the attestation language in the form is more expansive. For example, the wage attestation in the new LCA specifies that employers may not deduct attorneys’ fees or costs in connection with a visa petition.

At the same time it released its new LCA form, the DOL also posted its revised WH-4, Nonimmigrant Worker Information Form, which is the form individuals may use to submit complaints to DOL about fraud or misconduct in H-1B, H-1B1 or E-3 visa programs. This form is utilized by DOL’s Wage and Hour Division, which is the office that conducts LCA audits.

This post was written byRebecca B. Schechter of  Greenberg Traurig, LLP.
More information on Department of Labor at the National Law Review.

Department of Labor Signals Move to Limit Definition of “Employment”

On June 7, 2017, U.S. Secretary of Labor Alexander Acosta announced the immediate withdrawal of the U.S. Department of Labor’s (DOL’s) 2015 and 2016 Administrative Interpretations regarding joint employment and independent contractors. While this withdrawal signals the current administration’s attempt to limit the expansive definition of “employment,” the DOL made clear that it does not relieve companies of their legal obligations under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act.

Many businesses had argued these obligations were unduly burdensome on employers. For the past several years, the Wage and Hour Division (WHD) has worked with the IRS and numerous states to combat employee misclassification and to ensure that workers receive all the wages, benefits and protections to which they are entitled. In Fiscal Year 2015, for example, WHD investigations resulted in some $74 million in back wages for more than 102,000 workers, many of which were concentrated in traditionally low-wage industries such as janitorial, temporary help, food service, day care and hospitality. Withdrawal of the Administrative Interpretations may be the first step to rein in these enforcement efforts.

Specifically, the DOL has withdrawn guidance regarding:

  • The Presumption That Most Workers Are Employees: The withdrawn guidance on independent contractors stated that “most workers are employees” under the FLSA. United States Supreme Court precedent makes clear that there is no single rule or test for determining whether an individual is an employee or an independent contractor for purposes of the FLSA. Thus, even now, the inquiry into independent contractor status remains complex and fact-intensive.

  • The Expansion of the “Joint Employer” Definition: The withdrawn guidance on joint employment distinguished between “horizontal” joint employment and “vertical” joint employment scenarios. Under this guidance, the joint employment inquiry focused on the “economic realities” of the relationship between the employee and the potential joint employer. Its withdrawal signals a shift back to applying joint employer status only when a business has direct control over another business’s workplace.

More is expected from the Trump Administration and the courts on the ever-changing law surrounding independent contractors and joint employment.

This post was written by Angela M. Duerden and Elisabeth (Lisa) Shu of Wilson Elser Moskowitz Edelman & Dicker LLP.

The U.S. Department of Labor Rolls Back Obama-Era Guidance on Joint Employers and Independent Contractors

The U.S. Department of Labor (“DOL”) announced today that it was rolling back an Obama-era policy that attempted to increase regulatory oversight of joint employer and contractor businesses.

Courts and agencies use the joint employer doctrine to determine whether a business effectively controls the workplace policies of another company, such as a subsidiary or sub-contractor. That control could be over things like wages, the hiring process, or scheduling.

Legal IT ConsultantIn a short statement, the DOL signaled that it was returning to a “direct control” standard. “U.S. Secretary of Labor Alexander Acosta today announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors. Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law.”

Until 2015, the DOL interpreted the joint employer doctrine to apply only to cases in which a business had “direct control” over another business’s workplace. In 2015 and then again in 2016, under then-Labor Secretary Tom Perez (currently the Democratic National Committee Chair), the DOL changed its interpretation to state that a business may be a joint employer even if it exerted “indirect control” over another’s workplace. The 2015 and 2016 guidance effectively expanded the conditions for when one business can be held liable for employment and civil rights law violations at another company. Critics of this “indirect control” language argued that it was ambiguous and threatened to throw franchise, parent-subsidiary, and independent contractor relationships between businesses into disarray. Companies, particularly franchises, were particularly concerned that they could face liability at workplaces they did not directly oversee or control.

However, the DOL’s announcement today rescinded its guidance on “indirect control” and also rescinded guidance on independent contractors, which essentially stated that the DOL considered most workers to be employees under the Fair Labor Standards Act and that it was likely to apply a broad definition of “employee” and “employer” when investigating a company’s practices. This decision is a big win for businesses and business groups.

Despite the DOL’s reversal, the Obama-era standard can still be applied to businesses through the National Labor Relations Board (“NLRB”), an independent agency that serves as the government’s main labor law enforcer. The NLRB considers a company jointly liable for its contractors’ compliance with the National Labor Relations Act if they have “indirect” control over the terms and conditions of employment or have “reserved authority to do so.” The NLRB has not rescinded its interpretation. President Trump has yet to pick nominees for the five-member board’s two open seats, which will likely affect the NLRB’s interpretation of the joint employer doctrine and many other NLRB rules, interpretations, and guidance.

The DOL’s guidance does not affect actions taken by other federal agencies.

This post was written by James R. Hays and Jason P. Brown  Sheppard Mullin Richter & Hampton LLP.

The ERISA Fiduciary Advice Rule: What Happens on June 9?

This is an update on the upcoming effective date of the “fiduciary rule” or “fiduciary advice rule” (the “Rule”) that was issued under the US Employee Retirement Income Security Act of 1974 (ERISA). The Rule was published by the US Department of Labor (DOL) in April, 2016. The purpose of the Rule is to cause a person or entity to become a “fiduciary” under ERISA and the US Internal Revenue Code of 1986 (the “Code”) as a result of giving of certain types of advice involving investment of assets of employee benefit plans, such as 401(k) or pension plans, or of individual retirement accounts (IRAs) and receiving compensation for that advice.

calendar hundred daysThe Rule was originally intended to become effective April 10, but in April the DOL extended (the “Extension Notice”) the effective date of the Rule for 60 days (until June 9), and provided for reduced compliance obligations under the Rule from that date through the end of 2017 (the “Transition Period”). The effective date for Prohibited Transaction Exemptions (PTEs), both new and amended, that are related to the Rule also was extended until June 9, and further transitional relief was provided with respect to certain of those PTEs.

In a May 23 Op Ed in the Wall Street Journal, Labor Secretary Acosta announced that the Rule would go into effect on June 9, as provided for in the Extension Notice, and that the DOL would seek additional public comment on possible revisions to the Rule.  He indicated that the DOL “found no principled legal basis to change the June 9 date while we seek public input.”  The DOL also published, on May 23, FAQs on implementation of the Rule and an update of its previously-issued enforcement policy for the Transition Period. Therefore, it is important to review the rules that will go into effect on June 9.

Under the Rule, fiduciary status is triggered by investment “recommendations.” It provides, in general, that if a person (1) provides certain types of recommendations to a plan or its participants and/or beneficiaries, or to an IRA owner (collectively, “Protected Investors”); and (2) as a result, receives a fee or other compensation (direct or indirect), then that person is providing “investment advice for a fee” and therefore, in giving such advice, is a fiduciary to the Protected Investor. Receipt of compensation tied to such recommendations by a person or entity that is a fiduciary could result in prohibited transactions under ERISA and the Code. Under the Extension Notice, the DOL provided simplified compliance requirements under the Rule for the Transition Period.

This post was written by Gary W. Howell, Austin S. Lilling, Gabriel S. Marinaro, Richard D. Marshall, Andrew R. Skowronski, Robert A. Stone of Katten Muchin Rosenman LLP.

Challenges and Priorities for the New Secretary of Labor

secretary of labor alexander acostaAlex Acosta was confirmed by the Senate to be the next Secretary of Labor.  He now takes responsibility for several high-profile issues with critical implications for government contractors.

As we have previously written, the Labor Department was an exceptionally active regulator from 2013 through the end of the Obama Administration.  Although few of us expect that pace to continue, Secretary Acosta will have to balance two competing pressures.  On one hand, the President has already signed a law repealing one of the Labor Department’s most controversial regulations (the Fair Pay and Safe Workplaces rule) and directed agencies to review current regulations with a critical eye.  On the other hand, Acosta will be leading a department charged with enforcing the laws that protect or favor workers’ rights, which sometimes compete with the priorities of their employers.

These potentially opposing viewpoints were on display during Acosta’s confirmation hearing where he was pressed repeatedly by Senators to discuss his views on various regulations.  Asked by Senator Roberts to give his “overall philosophy on regulation,” Acosta emphasized the need to eliminate regulations “that are not serving a useful purpose,” and the need to enable small businesses to thrive.

Some uncertainty remains with respect to two specific cases that government contractors are watching closely.  First, the regulations governing paid sick leave were not raised during Acosta’s confirmation hearing, and Acosta has not publicly opined on them.  They were issued late in President Obama’s second term, and therefore fell within the window of the Congressional Review Act (“CRA”), but the level of chatter about repealing those regulations has lately been quite low.

Second, the Department is currently litigating proposed changes to overtime pay rules.  A district court held last year that the Department acted without authorization by doubling the salary threshold for defining executive, administrative, professional, outside sales, and computer employees (so-called “white collar” employees) from approximately $24,000 to $47,000.  Acosta demurred when Senators asked for his opinion on the merits of the case.  He acknowledged, however, that the large increase was partially a result of the long delay in adjusting the salary threshold, which had not been changed since 2004.  Adjusting for cost of living rises, Acosta suggested, would result in a revised threshold closer to $33,000.  He declined to say whether the Labor Department might change its position in the litigation in the Fifth Circuit, where briefing is scheduled to be complete in at the end of June, or withdraw the rule and propose an alternative.

On a positive note, Acosta expressed support for the practice of publishing detailed “opinion letters” from the Administrator of the Wage and Hour Division.  This practice has been halted since 2009.  This type of guidance, although not binding on a court, could provide helpful clarity to employers with contracts covered by the Service Contract Act and the Davis-Bacon Act.

ARTICLE BY Jeff Bozman, Susan B. Cassidy & Lindsay Buchanan Burke of Covington & Burling LLP
© 2017 Covington & Burling LLP

Update: DOL Regulation For Employers Who Use Direct Deposit and Payroll Debit Cards Invalidated

payroll card DOLOn February 16, 2017, the New York State Industrial Board of Appeals invalidated and revoked the NYS Department of Labor regulations we wrote about previously (and updated here) governing payment of wages by direct deposit or payroll debit card. The regulations were scheduled to take effect on March 7, 2017.

As we described in detail in our previous posts, the new regulations would have required employers to provide notice to employees and obtain consent from those who elected to receive wages via direct deposit or payroll debit card. In addition, the regulations would have imposed various restrictions on the terms of use and the fees associated with payroll debit cards.

In its decision, the Board determined that the regulations exceeded the scope of the DOL’s authority and imposed prohibitions that are beyond its purview. Specifically, the Board likened the fees associated with payroll debit cards to the fees associated with checking accounts and licensed check cashers, which are not subject to regulation by the DOL. The Board concluded that the regulations “go beyond regulation of the employment relationship and into the area of banking law, which is outside [the DOL’s] competence and expertise in the regulation of employment and occupational safety and health.” Further, the Board noted that the policy concern which the regulation sought to address – namely, that low wage workers without access to traditional bank accounts will be coerced into receiving wages by payroll debit card – is already covered by Section 192 of the Labor Law, which governs the payment of wages and which requires advance consent from an employee before an employer can pay wages via payroll debit card.

The DOL has not yet indicated whether it will appeal this decision, but we will be sure to keep you updated on any new developments. In the meantime, employers who have taken steps to comply with the regulations can press pause on those plans, but should ensure that their procedures for payment of wages are in compliance with all other applicable laws and regulations.

ARTICLE BY Michael S. Arnold & Brie Kluytenaar of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

©1994-2017 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

R. Alexander Acosta Picked to Head Department of Labor

Alexander Acosta DOLPresident Donald Trump has nominated R. Alexander Acosta to be Secretary of Labor. His nomination comes one day after Andrew Puzder, Trump’s first pick to lead the Department of Labor, withdrew his nomination.

Acosta, currently the Dean of Florida International University’s law school, is the son of Cuban immigrants. If confirmed, Acosta would be the first Hispanic member of Trump’s Cabinet.

Acosta is a graduate of Harvard College and Harvard Law School. He clerked for Justice Samuel A. Alito, Jr. when Alito was a Judge on the U.S. Court of Appeals for the Third Circuit, in Philadelphia. Acosta then went into private practice at the Washington, D.C. law firm Kirkland & Ellis and taught law at the George Mason School of Law.

Acosta has been confirmed by the Senate three times — to become a National Labor Relations Board member, then to become Assistant Attorney General for the Civil Rights Division of the U.S. Department of Justice, and finally when he was nominated to be U.S. Attorney for the Southern District of Florida.

He was appointed by President George W. Bush as member of the National Labor Relations Board, and served as a Board member from December 17, 2002, through August 21, 2003. Acosta reportedly authored approximately 125 opinions during his tenure on the Board.

Thereafter, Acosta served as Assistant Attorney General for the Department of Justice’s Civil Rights Division under President George W. Bush until June 2005. He later was appointed U.S. Attorney for Southern District of Florida, where he served until becoming the Dean of FIU Law in 2009.

ARTICLE BY Linda R. Carlozzi & Philip B. Rosen of Jackson Lewis P.C.
Jackson Lewis P.C. © 2017

Trump Directs Reexamination of the Fiduciary Rule Changes

DOL Fiduciary RulePresident Donald Trump issued a memorandum late last week directing the Department of Labor to reexamine the anticipated changes to the fiduciary rule applying to most retirement plans and individual retirement arrangements. The changes are set to go into effect on April 10, 2017; however, the memorandum directs the Department of Labor to conduct a full review to determine whether to rescind or revise the rule. Initial reports indicated that implementation of the rule was being delayed, but the memorandum ultimately issued by the President did not include a delay. The Department of Labor released a statement following the issuance of the memorandum indicating it would consider its legal options to delay implementation. It is not clear how quickly the Department of Labor may reach a conclusion on a delay of implementation.

The anticipated changes expand the definition of fiduciary under the Employee Retirement Income Security Act of 1974 (“ERISA”) and subject more financial advisors to fiduciary standards under ERISA. The new fiduciary rule is aimed at eliminating a potential conflict of interest by subjecting retirement plan advisors to fiduciary standards under ERISA if the advisor receives variable compensation tied to the investments the advisor recommends to the plan. Advisors could avoid harsh penalties under the rule by providing specific disclosure and agreeing to abide by a “best interest” standard of conduct. We are aware that some advisors were preparing to implement significant business model changes to comply with the anticipated rule changes.

What this means for employers –

  • Employers/benefits committees should evaluate whether they will require advisors to comply with the requirements of the rule despite the memorandum.

  • Employers/benefits committees should reach out to their advisors/consultants and confirm whether they intend to proceed with implementing changes to comply with the rule.

  • Employers/benefits committees should continue to monitor developments in this area from a fiduciary risk perspective.

ARTICLE BY Kevin Selzer of Holland & Hart LLP
Copyright Holland & Hart LLP 1995-2017.

DOL Overtime Rule Appeal Faces Uncertainty

DOL Overtime Rule

Efforts to fast track the appeal of a nationwide preliminary injunction that prevents the U.S. Department of Labor (DOL) from implementing drastic proposed revisions to federal overtime regulations just got “Trumped.”

After obtaining an order in December 2016 to expedite the appeal while President Obama was still in office, attorneys for the federal government filed a short, unopposed motion on January 25, 2017, asking the U.S. Court of Appeals for the Fifth Circuit for a 30-day extension of time to file their reply brief, stating: “The requested extension is necessary to allow incoming leadership personnel adequate time to consider the issues. Plaintiffs’ counsel has authorized us to state that they consent to this extension motion.”

The preliminary injunction that is the focus of the appeal was issued on November 22, 2016, by a federal district court judge in Texas. The injunction halted the implementation of regulatory revisions that were scheduled to go into effect on December 1, 2016, and which would have more than doubled the minimum salary requirements for the major white collar overtime exemptions under the Fair Labor Standards Act (FLSA) from $455 per week to $913 per week.

The DOL already has filed its opening brief on appeal, and the plaintiffs in the case have filed their response. Amicus briefs in support of both sides also have been filed. Absent the requested extension, the DOL’s reply brief is due on January 31. If the extension is granted as requested, the DOL’s reply brief will be due on March 2. However, it also is possible that, after considering the issues, incoming leadership will abandon the appeal.

ARTICLE BY Steven F. Pockrass of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

© 2017, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

FLSA Overtime Rules Enjoined, NY Overtime Laws, National Origin Discrimination: Employment Law This Week [VIDEO]

employment lawDistrict Court Enjoins FLSA Overtime Rules

Our top story: A federal court in Texas has temporarily enjoined new exemption rules issued by the U.S. Department of Labor (DOL). The rules, which would have dramatically increased salary thresholds for overtime exemptions, were set to go into effect on December 1. The district court judge found that the 21 states that brought the suit established a prima facie case that the DOL overstepped its authority in establishing the new rules. Because the Fair Labor Standards Act makes no reference to salary thresholds, the court found that any new thresholds might have to be created by Congress and not the DOL. If the injunction is made permanent, it could be the beginning of a lengthy appeals process, which would leave employers in limbo.

New York State Overtime Laws Likely to Proceed

While overtime expansion is stalled at the federal level, New York State’s plan to increase salary thresholds remains on track. The comment period for the proposed increase closed on December 3. Under the rule, thresholds for exempt employees would rise to $825.00 per week for large employers in New York City and $787.50 per week for employers in Nassau, Suffolk, and Westchester Counties. If the New York State Department of Labor proceeds with the new rule, it will go into effect on December 31 of this year.

EEOC Issues Updated Guidelines on National Origin Discrimination

The Equal Employment Opportunity Commission (EEOC) released updated guidance on national origin discrimination. The new guidelines address legal developments on issues like human trafficking and harassment in the workplace. The guidance includes over 30 examples of national origin discrimination, as well as best practices to reduce the risk of violation. The guidance also states that, if an employee’s accent “materially interferes” with his or her ability to communicate in spoken English and effective spoken communication in English is a job requirement, an employer can legally move that worker.

USCIS Increases Stability for Foreign Workers

The U.S. Citizenship and Immigration Services (USCIS) has issued a final rule that makes it easier for employers to sponsor and retain skilled foreign workers. The rule gives added job flexibility and protection to foreign workers in H-1B status or who are stuck in a long green card application process. USCIS’s rule also expands the eligibility of certain employers for H-1B cap exemptions and adds grace periods, so certain skilled workers can remain in the country for limited periods while in between jobs.

Tip of the Week

Last week, as part of the 21st Century Cures Act, the U.S. House of Representatives passed new mental health reform legislation intended to step up enforcement of rules requiring that insurers cover mental health care at the same level as they cover physical health care. The legislation could impact employers’ health insurance plans. For this week’s Tip of the Week, James Gelfand, Senior Vice President of Health Policy for The ERISA Industry Committee (ERIC), has some advice on how employers should update their plans in 2017 in order to remain compliant:

BY George Carroll Whipple, III  of Epstein Becker & Green, P.C.

©2016 Epstein Becker & Green, P.C. All rights reserved.