Sub-Regulatory Actions

Chart:

https://www.uschamber.com/sites/default/files/Subreg Document September 2012 (2).pdf

Explanation in detail:

Department of Labor

Agency-Wide Activity

FY 2013 Budget Request for Misclassification Enforcement (DOL) – A request in President Obama’s FY 2013 budget proposal targets employee misclassification. The budget proposal requests an additional $14 million for a multi-agency initiative, including a joint enforcement program between the Department of Labor and the Treasury Department to target the use of illegitimate independent contractors. Specifically, the joint program if enacted, would include 35 new enforcement personnel, as well as competitive grants to states to crack down on the improper use of independent contractors.

Occupational Safety and Health Administration (OSHA)

National Emphasis Program on Recordkeeping (OSHA) – The Occupational Safety and Health Administration (OSHA) is conducting a national emphasis program (NEP) seeking to establish that employers are under-reporting injuries and illnesses. As part of this program, the directive states that when determining the classification of the citation, an investigator shall consider incentive or disciplinary programs that would discourage the recording or reporting of injuries or illnesses. Thus, incentive or disciplinary programs intended to reward compliance will be used as evidence against an employer in a citation.

Expanded Use of the General Duty Clause (OSHA) – During a web-chat, OSHA Assistant Secretary David Michaels stated that ergonomics violation enforcement will increase under OSH Act’s general duty clause. OSHA enforcement personnel will be looking for ergonomic hazards during the course of their investigations, with support from the national office. Not only will this lead to greater enforcement of ergonomic hazards, but other hazards as well. OSHA Deputy Assistant Secretary Jordan Barab noted that OSHA will be looking to make the process of enforcing general duty clause violations “more effective.”

Hexavalent Chromium NEP (OSHA) – OSHA released a national emphasis program (NEP) that will highlight the dangers posed by hexavalent chromium. The NEP will serve as an “instructional manual” for enforcement officers that will clarify the dangers of hexavalent and how violations should be cited. The NEP will likely also heighten the investigator’s use of a citation under this standard.

Administrative Enhancements to Penalties (OSHA) – On April 22, 2010, Assistant Secretary Michaels issued a memo highlighting various “administrative enhancements” to OSHA’s penalty setting policies. Several of the “enhancements” increase the monetary penalties assessed on businesses, without statutory or regulatory changes. For example, under the Severe Violator Enforcement Program (SVEP), penalties for serious violations will not be grouped or combined per job site, but rather separated and charged as separate violations. Thus, an employer could receive numerous individual penalties that will likely add up to more than if combined. Another change is to lengthen the “lookback” period from three to five years, thereby making employers more vulnerable to being cited as a repeat offender.

informACTION App Challenge (WHD and OSHA) — On July 12, 2011, the Department of Labor announced a contest, the “informACTION app” challenge, which requires developers to use compliance data from the Occupational Safety and Health Administration and the Wage and Hour Division to provide information to workers and the general public targeting the hotel, motel, restaurant, and retail industries. In designing the app, the Department is “encouraging developers to combine DOL data with other publicly accessible data feeds from around the web.” If a developer uses an outside data set, the accuracy or veracity of the data being provided is not clear. The informACTION challenge is meant to target “bad actors” in the employer community, but may actually damage an employer’s reputation with good standing in the community if the information conveyed is incomplete, or inaccurate.

Site-Specific Targeting 2011 (OSHA) — The Occupational Safety and Health Administration (OSHA) has issued a directive, entitled Site-Specific Targeting 2011, which expands the paramaters of the program, and lowers the site-specific targeting minimum from 40 to at least 20 employees. The change became effective on September 9, 2011. Under the Directive, inspections could continue through September 2012.

The site-specific targeting program calls for inspectors to visit at least 3,700 establishments with substantially worse than average rates of illnesses and injuries recorded in OSHA Form 300 logs. Exempted from the program are construction businesses, state and federal agencies other than the U.S. Postal Service, and businesses in the Voluntary Protection Program or Safety and Health Achievement Recognition Program.

Of the 3,700 employers under the 2011 program, about 420 will have their records come under additional scrutiny by the Labor Department as part of a two-year study evaluating the “impact of inspections on injury and illness rates and overall compliance with OSHA standards and regulations.” Another 420 establishments will be examined the following year.

Office of Labor-Management Standards

Persuader Reporting Orientation Program (OLMS) —The Department of Labor initiated the Persuader Reporting Orientation Program (PROP) in January 2011 to “provide compliance assistance to employers and labor relations consultants who are likely to enter reportable agreements or arrangements pursuant to Section 203 of the Labor-Management Reporting and Disclosure Act.” PROP should be viewed in conjunction with the proposed “persuader” regulation, narrowing the “advice” exception which was promulgated on June 21, 2011.

Under PROP, DOL will examine union election petitions filed with the NLRB and send information via a letter to employers and their representatives informing them of their persuader reporting obligations under Section 203 of the Labor-Management Reporting and Disclosure Act. This letter makes scant reference to the “advice” exception, and includes references to LM-10 reporting obligations that cover certain payments to and arrangements with unions or union officials.

Mine Safety and Health Administration

“Rules to Live By” (MSHA) – Before the mining accident at Upper Big Branch, West Virginia, MSHA issued a new program called “Rules to Live By” that was to highlight the most common safety and health violations that are cited during an investigation. MSHA openly called the new effort a new “outreach and enforcement program.” The program, created by MSHA staff, will operate in three phases. The first phase will include industry outreach and education. The second and third phase will be focused inspections. This new enforcement initiative comes after two straight years of mine fatalities falling to an all-time low.

Wage and Hour Division (WHD)

“We Can Help” (WHD) – Secretary Solis kicked off a nation-wide campaign called “We Can Help” in April 2010 that seeks to “educate” workers and workers’ groups about their rights under various federal labor laws including the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Davis-Bacon Act. The goal of such a major program is to increase enforcement against employers by giving employees the tools and information to report alleged violations. The details of the “We Can Help” program stemmed from stakeholder meetings with unions, employee rights groups and the plaintiffs’ attorney groups.

Administrative Interpretations (WHD) – The Wage and Hour Division (WHD) introduced Administrator Interpretations (“AI”) that effectively replaces the opinion letter process. An AI gives a broad interpretation of whether “typical” job duties or industry wide occupations are exempt under the Fair Labor Standards Act (FLSA). No longer may a party request an opinion from WHD based on specific facts surrounding his or her situation. These broad interpretations will help increase wage and hour enforcement against employers who, due to the specific facts of their situation, may have been previously able to prove they were exempt under the FLSA.

U-VISA Determinations (WHD) – The Secretary of Labor announced that DOL would begin to certify U-Visas for victims of employment based crimes. Traditionally, U-Visas are granted to undocumented individuals who are victims of violent crimes such as assault, rape, kidnapping, trafficking, etc. Under a U-Visa, an individual may remain in the U.S. for up to four years. The WHD will be tasked with certifying U-Visa requests during the course of their wage and hour investigations.

“Bridge to Justice” ABA Referral Program (WHD) – On November 19, 2010, Vice President Joe Biden announced an initiative between the Department of Labor and the American Bar Association during a meeting of the Middle Class Task Force. The purpose of the initiative, entitled “Bridge to Justice” is to provide complainants–employees who allege violations of their rights under the Fair Labor Standards Act, or the Family and Medical Leave Act--the opportunity to be referred to the American Bar Association’s Standing Committee on Lawyer Referral and Information Service, when the Department of Labor has declined to pursue their claim. The program went into effect on December 13, 2010.

At any one of four stages, a complainant will be provided the toll-free number for the ABA-Approved Attorney Referral System. If the Wage and Hour Division has completed an investigation, it will send the complainant a letter with the Wage and Hour Division case number, the violations found, and the amount of calculated back wages owed. This initiative is expected to result in increased private litigation under the FLSA and the FMLA or as a method to drive private businesses to settle allegations even when they may be unsubstantiated.

informACTION App Challenge (WHD and OSHA) — See discussion in OSHA section.

Memorandum of Understanding for Employee Misclassification Initiative (WHD) — On September 19, 2011, the Wage and Hour Division, the Internal Revenue Service, and the labor commissioners and other agency leaders of the states of Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah, and Washington announced that they have entered into memorandum of understanding to curb the practice of employee misclassification. The Department of Labor has also entered into similar agreements with the states of California, Colorado, Hawaii, Illinois, and Montana.

The Wage and Hour Division has revamped the agency’s complaint process to focus on industries that “employ particularly vulnerable workers who don’t complain.” The agency has announced initiatives focusing on Tennessee hotels and motels, North Carolina residential care facilities, Florida and Mississippi agriculture, New Jersey gas stations, Tampa. Fl. restaurants, Connecticut and Rhode Island construction sites, grocery stores in Alabama and Mississippi, and child labor violations in the movie theater industry. 

In addition, the  Wage and Hour Division has announced an enforcement initiative to combat misclassification of independent contractors at nail salons in the Seattle metropolitan area. 

Restaurant Enforcement Initiative (WHD) — On April 18, 2012, the Wage and Hour Division announced that it is launching an enforcement and education initiative focused on the restaurant industry in the Los Angeles Area. A similar enforcement initiative is targeted at restaurants in the Portland, Oregon metropolitan area.

As part of the Los Angeles initiative, the division will conduct unannounced investigations at restaurants in the San Fernando Valley, Hollywood, West Los Angeles, and other areas of Los Angeles County. 
Information on establishments investigated by WHD will be included in the division’s enforcement database, and through the  “Eat Shop Sleep” app.

Office of Federal Contract Compliance Programs (OFCCP)

Aggressive Strategic Plans (OFCCP) – The Director of the Office of Federal Contract Compliance Programs (OFCCP) laid out an aggressive “strategic plan”. For example, one of the targeted goals is to “increase workers’ incomes and narrow wage and income inequality,” while another is to “ensure fair and high quality work life environments.” OFFCP will not only enforce systemic discrimination claims, but also claims of individual discrimination. OFCCP will further broaden enforcement efforts through more use of corporate-wide multi-establishment reviews and industry-specific reviews.

Changes in Audit Procedure (OFCCP) —On May 12, 2011, the Office of Federal Contract Compliance Programs (OFCCP) announced that it intends to change the text of the Scheduling Letter and alter the accompanying Itemized List. For the Itemized List, OFCCP is seeking to delete the requirement that contractors provide data by either job group or job title. Under the proposed change, employers would be required to provide the data by both job group and job title. This revision is more burdensome for employers.

The new information collection requirements would also mandate submission of individualized compensation figures for each employee, along with additional individually identifiable data that are not currently required to be submitted in response to the Scheduling Letter stage. These proposed changes would impose unnecessary burdens by imposing new record-keeping and reporting obligations, and would also pose a serious threat to both individual privacy and the confidential and proprietary information of businesses.

Changes in Compensation Guidelines (OFCCP) — On August 10, 2011, the OFCCP published an advanced notice of proposed rulemaking to develop a replacement for the EO survey to implement Executive Order 11246. The ANPRM solicits comments from the public on 15 separate questions. Perhaps most alarming, the agency in one of their questions has raised the possibility that businesses bidding on future Federal contracts will need to submit compensation data as part of the Request for Proposal process. OFCCP has also stated their intentions to use this type of compensation data for research, such as analyzing industry trends.

Broadening Definition of Subcontractor (OFCCP) — The OFCCP has issued guidance (OFCCP Directive No. 293) broadening its interpretation of when a health care provider or insurer is considered to be a federal contractor or subcontractor for purposes of OFCCP jurisdiction. The OFCCP is also pursuing “novel” theories in two pending cases to exert pressure on health care providers and/or insurers so that they are classified as subcontractors. This development should be concerning for the health care industry as obligations imposed by OFCCP on employers is often times both financially and administratively burdensome, and failure to comply may lead to sanctions, loss of federal contracts, and/or future ineligibility to obtain future contracts.  Effective April 25, 2012, OFCCP is rescinding OFCCP Directive No. 293.

Employment and Training Administration (ETA)

H-2A Job Registry — On July 8, 2010, the Employment and Training Administration’s Office of Foreign Labor Certification announced the development of a new web-based tool, the H-2A Job Registry which permits the public to search and retrieve agricultural jobs filed under the H-2A program.

Bureau of International Labor Affairs- President’s Committee on the International Labor Organization (ILAB)

TAPILS (ILAB) – The President’s Committee on the International Labor Organization (“ILO”) formulates and coordinates U.S. policy towards the ILO. The committee consists of the secretaries of Labor, State and Commerce, the President’s special assistants on national security and economic policy, the president of the AFL-CIO, and the president of the U.S. Council on International Business (“USCIB”). A subcommittee of the President’s Committee, the Tripartite Advisory Panel on International Labor Standards (“TAPILS”) is an advisory committee that is reviewing ILO Conventions to determine whether any additional treaties are appropriate for ratification by the Senate. TAPILS is first examining Convention 111 on employment discrimination and the Maritime Labor Convention (MLC).

Equal Employment Opportunity Commission

Credit and Criminal History Background Checks (EEOC) – The Equal Employment Opportunity Commission (EEOC) issued a complaint against an employer stemming from the alleged disparate impact of using credit and criminal history background checks as part of their hiring process. EEOC’s target of background checks by employers has become a prominent focus of the new chair of the EEOC, with the EEOC holding a hearing to examine the issue of using credit history on October 20, 2010 and a hearing examining criminal history background checks on July 26, 2011. If successful in its complaint, the EEOC could use the same approach to target nation-wide employers who use background checks in their hiring process.

On April 25, 2012, the EEOC voted 4-1 to approve new enforcement guidance related to consideration of arrest and conviction records in employment decisions.   

Internal Revenue Service

Random 401(K) Questionnaires (IRS) – The Internal Revenue Service (IRS) introduced an initiative in 2010 to randomly send questionnaires to employers concerning their compliance with 401(k) plans. The questionnaires are seeking information on regulatory and statutory compliance of plans, potential failure to follow a plan’s written terms, and whether payroll systems are appropriate. In 2011, the IRS indicated that it intends to conduct full-scope examinations of those plans whose sponsors failed to respond to the 401(k) Questionnaire. 

Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS)

NEUFELD Memo (USCIS) – The Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS) issued a memo that establishes a variety of factors in which to determine whether an employer is eligible to sponsor an H-1B specialty occupation visa. USCIS requires an employer-employee relationship in order for an H-1B specialty occupation visa to be issued. The Neufeld memo outlines the set of factors the agency will now use to determine whether such a relationship exists. While the USCIS pointed out that the guidance memo does not change the underlying requirements for an H-1B petition, it has lead to a greater number of denials and increased investigations, under the new specific factors that USCIS is using to determine what a violation is. The memo also limits the scope of employers eligible to apply for H-1B visas because of the narrower definition.