The U.S. Department of Labor (DOL) announced on May 1, 2012, that in accordance with a settlement agreement, Wal-Mart Stores Inc. has agreed to pay $4,828,442 in back wages and damages to more than 4,500 employees nationwide and $463,815 in civil money penalties for misclassifying employees and associated violations of the overtime provisions of the Fair Labor Standards Act (FLSA), the federal wage and hour law.
On April 18, 2012, the House Subcommittee on Health, Employment, Labor, and Pensions held a hearing with the august title of "Reviewing the Impact of the Office of Federal Contract Compliance Programs' Regulatory and Enforcement Actions."
I was reminded of the comedian Rodney Dangerfield’s signature line “I don’t get no respect!” when, on April 16, I attended the U.S. Supreme Court’s oral argument in a well-publicized wage and hour case. At issue is what the U.S. Department of Labor is doing to enforce the wage and hour laws and what deference is owed to the DOL’s ever-changing views.
The Court of Appeals for the District of Columbia Circuit has soundly rejected OSHA’s interpretation of the statutory requirement that an OSHA citation be issued no more than six months following a violation of the Occupational Safety and Health Act. In a decision issued on April 6 in AKM LLC, d/b/a Volks Constructors v. Secretary of Labor, the court invalidated OSHA’s citation, issued in November 2006, for the company’s alleged failure to properly record certain workplace injuries between January 2002 and April 2006. The court described OSHA’s arguments as “unreasonable” and leading to “absurd consequences.”
In part because of reinvigorated focus from Congress and the executive branch, in part because of employers reaching out to hire veterans, employment of veterans has improved over the past year. According to data from the Bureau of Labor Statistics (BLS), from February 2011 to February 2012, the unemployment rate for veterans 18 and older decreased from 9.2% to 7.0%, lower now than the unemployment rate for nonveterans.
It appears that the employment of disabled veterans has become the top priority of both the Department of Labor and the EEOC. It seems there is a competition among the federal agencies to show which is more supportive of disabled vets. DOL, through the offices of the OFCCP, has issued controversial Proposed Regulations for significantly enhanced affirmative action entitlements for individuals with disabilities. Now the EEOC has issued a new Guidance: Veterans and the Americans with Disabilities Act (ADA): A Guide for Employers.
In a significant raising of the stakes in the debate over whether OFCCP will grant more time to file comments on the proposed 503 regulations, the House of Representatives Workforce Committee has requested that the comment period be extended by 90 days. In a letter dated January 27, 2012, the Committee on Education and the Workforce requested that more time be provided to comment on the proposed affirmative action and non-discrimination regulations published by the US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) under Section 503 of the Rehabilitation Act. Those proposed regulations would constitute a self-described “sea change” in the structure and purpose of affirmative action, not least by imposing a 7% hiring “goal” for individuals with disabilities.
The US Department of Labor on January 30 released a notice of proposed regulations (NPRM) to implement amendments to the military leave provisions of the Family and Medical Leave Act (FMLA) made by the National Defense Authorization Act for Fiscal Year 2010. The statutory amendments extended the availability of FMLA leave to family members of members of the Regular Armed Forces for qualifying exigencies due to the servicemember’s deployment; define the deployments covered by the new regulations; and extend FMLA military caregiver leave to family members of certain veterans with serious injuries or illnesses. The proposed regulations also include changes concerning the calculation of leave and reorganize and make technical changes to the current regulations covering military FMLA. This NPRM also proposes to amend the regulations to implement the Airline Flight Crew Technical Corrections Act, which established new FMLA leave eligibility requirements for airline flight crewmembers and flight attendants. The Department has indicated that comments will be due to DOL on or before 60 days after date of publication in the Federal Register.
Remember when the U.S. Department of Labor’s stated position by the Office of Federal Contractors Compliance Programs (OFCCP) was “we really are interested in federal contractors’ views”? Apparently, the agency really doesn’t want to hear that much from the regulated public – at least when it comes to developing new affirmative action and non-discrimination regulations.
In one of Judge Richard Posner’s more celebrated opinions, he wrote that giving preferential hiring to individuals with disabilities would be “affirmative action with a vengeance.” No matter what the Bible says, in this case, vengeance belongs to the Office of Federal Contract Compliance Programs (OFCCP).
The Solicitor’s Office of the U.S. Department of Labor (DOL), which provides legal services to the Secretary of Labor and the program agencies of DOL, including OSHA, the Wage and Hour Division, and the Office of Federal Contract Compliance Programs (OFCCP), is undergoing a reorganization.
The Supreme Court has agreed to hear a case raising the issue of whether pharmaceutical sales representatives (“PSRs”) are exempt from the overtime provisions of the Fair Labor Standards Act (“FLSA”). The Court of Appeals for the Ninth Circuit, in Smithkline Beecham Corp., held that the PSRs were exempt as outside salesmen, thereby creating a split with the Court of Appeals for the Second Circuit, which had previously held in In re Novartis Wage & Hour Litigation that the outside sales exemption did not apply to PSRs.
It appears that BP’s woes are not limited to oil spills.
The Wage and Hour Division of the Department of Labor has announced the results of the first year of the agency’s multi-year enforcement initiative focusing on the gas station industry in New Jersey. During FY 2011 (the year ending on September 30, 2011), Wage-Hour conducted 74 investigations of gas station facilities throughout the state, recovering $1,014,895 in back wages for 295 workers. BP-branded stations accounted for 69 of the establishments investigated. Non-BP stations whose owners also had BP stations were found by Wage-Hour to have similar violations.
Today, the President acted quickly to sign into law the VOW_ to_ Hire_ Heroes_ Act_of_ 2011.pdf. In one of the few displays of both bipartisan and bicameral actions in recent times, Congress passed the legislation intended to assist unemployed veterans find employment. In a symbolic vote on November 10, the day before Veterans Day, the Senate unanimously passed its bill (95-0), which was based upon the House-passed Veterans Opportunity to Work (VOW) Act. The House followed quickly to pass that bill on November 16.
The Department of Labor’s Bureau of Labor Statistics (BLS), in its the October 2011 report, showed that the overall jobless rate for veterans, at 7.7%, was lower than the national rate of 9%, but for those who served in Iraq and Afghanistan, the rate was much higher--12.1%. Some 2/3 of these veterans are under age 35. Breaking the figures down further, Gulf War era II veterans, i.e., those who served since September 2001, who were current or past members of the National Guard or Reserve, suffered a worse unemployment rate in July, of 14%. This was still better than young, male veterans (ages 18-24), who had an unemployment rate of 21.9% in 2010.
The law provides a variety of methods to turn this situation around. Among its key provisions are its increases in education and training, job counseling, transition and placement assistance, and additional help for disabled veterans. It also amends the Uniformed Services Employment and Reemployment Rights Act (USERRA) to clarify what constitutes a benefit and a hostile work environment. One of the biggest boosts toward the goal of getting veterans employed is likely the tax credits to be given to employers hiring veterans. The law would provide a tax credit of up to $5,600 for hiring veterans who have been looking for a job for more than six months, a $2,400 credit for veterans who are unemployed for more than 4 weeks but less than 6 months and a tax credit of up to $9,600 for hiring veterans with service-connected disabilities who have been looking for a job for more than six months.
By: David Fortney
Last week, I testified before the House of Representatives Subcommittee on Workforce Protections at a hearing entitled, “Examining Regulatory and Enforcement Actions Under the Fair Labor Standards Act.”
Although things in Congress have a tendency to move rather slowly, there are significant points from the hearing I would like to address relating to meaningful compliance assistance for employers in determining whether workers properly are classified as independent contractors or employees.
Tammy McCutchen and I, who both testified before the Subcommittee addressing employer’s interests, discussed the following three specific steps that the DOL can pursue immediately, without the need for additional resources, to ensure compliance on worker classification matters. These include compliance assistance comparable to what IRS offers under its programs to assist employers in avoiding the misclassification of workers.
1) Restoration of written opinion letters comparable to IRS written guidance as to whether employers should classify their workers as independent contractors or employees. Under the FLSA, written opinion letters issued by the Wage and Hour Administrator provide legal certainty and offer a legal defense for an employer if there are challenges.
2) The DOL should resume supervising the back wage payments, if any, if workers are reclassified from independent contractors to employees, and require employers to pay 100 cents on the dollar to ensure that any overtime and – although typically not an issue – minimum wage obligations are met. Under these arrangements, DOL would not make any claims for liquidated damages to be paid (which would be double the back pay) or assert claims for “willful” violations which would allow back wages for three years. This is not much of a concession by DOL because employers typically will not voluntarily pay either liquidated damages or agree to a settlement that characterized the violations as willful.
3) Reinstate the use of the wage receipt form, known as DOL Form WH-58. This form provides important information to employees, including the amount of back pay, and a waiver provision which provides legal certainty to the employer as it ensures that all back pay had been properly paid and protects employers from additional legal claims by trial lawyers representing employees.
At this point, time will tell whether the DOL with implement meaningful compliance assistance that would compliment the program offered by the IRS.
Stay tuned…
The Department of Labor (“DOL”) announced yesterday the winner of the “informAction app” challenge to “empower consumer choices about the hotel, motel, restaurant and retail industries.” The winning app, submitted by Rachel Moore, of Alexandria, VA, is called “Eat Shop Sleep.” It combines enforcement data from the Occupational Safety and Health Administration (OSHA) and Wage and Hour Division (WHD) with consumer ratings web sites, such as Yelp and other tools, such as Google Maps.
The Department of Labor announced on Tuesday that Tulsa-based United States Beef Corp., doing business as Arby’s, has agreed to pay $56,838 in back wages to 759 current and former managers in Arkansas, Illinois, Kansas, Missouri and Oklahoma.
Two appellate courts, in the space of days, ruled on cases under the Uniformed Services Employment and Reemployment Rights Act (USERRA). Both affirmed substantial awards to the employee because of the employer’s willful disregard of the law. Both involved pre-service jobs with pay that included commissions. Fryer v. A.S.A.P. Fire & Safety Corp., No. 10-2047 (1st Cir. Sept. 9, 2011); Serricchio v. Wachovia Securities. LLC, No. 10-1590 (2d Cir. Sept. 13, 2011).
These cases make clear that employers should promptly reemploy a returning servicemember into the proper “escalator” position, i.e., one with the “seniority, status and pay” of the pre-service position. While that may seem an easy obligation, it often is difficult to identify that position, particularly where the pre-service job involves commissions and changing markets. That the market may have changed and that there is not a certainty as to what would have occurred to the position during a servicemember’s absence does not establish a legal defense.
President Obama has withdrawn the nomination of Leon Rodriguez for the position of Administrator of the Wage and Hour Division of the Department of Labor. Rodriguez was the President’s second nominee for the top position in the Wage and Hour Division, a position that has remained vacant for the entire Obama Administration.
At the recent National ILG Conference, FortneyScott and WorkPlace HR presented a session entitled “You Can’t Unring the Bell: How to Really Prepare for a Compliance Review.” Of the practical tips for avoiding common EEO and Affirmative Action pitfalls, we particularly emphasized the need for EEO practitioners to integrate themselves into various departments throughout the organization. I know what you’re thinking: “Have you seen my calendar?” “Do you know how many meetings I already attend?” “Do you hear that constant chirruping? That’s my BlackBerry notifying me of the emails I’m missing while I’m reading this.” Hear me out.
On August 5, President Obama proposed that companies who hire returning military service members would receive new tax credits. These incentives would start with a $2,400 credit for hiring an unemployed veteran or $4,800 for hiring a veteran who has been unemployed for six months. An existing tax credit for firms hiring veterans with a service-connected disability would increase to $9,600. The cost of this program is expected to cost $120 million over the next two years. The House Committee on Veteran Affairs chairman, Jeff Miller, commended the proposal.
Raymond Jefferson, Assistant Secretary of Labor for Veterans’ Employment and Training Service (“VETS”), resigned this week after the Department of Labor’s Acting Inspector General (“IG”) issued a report finding that Jefferson had violated federal procurement laws.
OFCCP Director Shiu conducted a live Q&A webinar and provided a good overview on a number of pending issues. She confirmed that we will have the proposed regulations under 503 of the Rehab Act in the near future (anticipated before Labor Day) and that the Agency continues to work on proposed compensation guidelines. Although there is some loose coordination with EEOC, there is room for enhanced coordination in compensation matters. In addition to the pending rulemaking and guidance, Director Shiu provided updated enforcement statistics, including the strong likelihood that individual complaints result in uncovering violations. We have prepared a summary organized by topics that will make it easy for you to see the specific responses under each area. This is a welcome development to have Director Shiu provide this information on the OFCCP regulatory agenda as well as other pending Agency developments.
In May 2010, the OFCCP abruptly announced that it was no longer accepting requests for or renewals of Functional Affirmative Action Plans (FAAPs). No reason was given and none has been forthcoming. The absence of any explanation led to considerable speculation as to the reason for the suspension of what most federal contractors thought was a useful program: based on the employer’s actual distribution of its employees; reducing the number on facility-based plans; with no diminution of affirmative action. Some practitioners suggested that the new leaders of OFCCP were suspicious of the FAAP program for no other reason than it was established during the Bush II administration. The speculation may stop now that the agency has issued a new Directive continuing the FAAP program, with revised procedures.
The California Supreme Court has ruled that employees who travel to California on business may be entitled to daily overtime compensation for work in excess of eight hours per day, as required by California law, even though they do not reside in California and California is not their normal place of work.
As most employers know, OSHA requires employers to record workplace illnesses and injuries and to produce these logs when an OSHA inspector arrives on site. On June 28, 2011, OSHA announced the launch of a new interactive web tool to help employers determine whether injuries and illnesses are work-related and recordable under the OSHA recordkeeping rules.
It’s that time of year already: hot days, barbecues, swimming pools, and (drumroll, please…) midyear monitoring of your Affirmative Action Programs! Amidst all the hubbub of summer, it’s easy to let periodic internal audits (or midyear monitoring in our lingo) slide to the bottom of your work agenda. But you shouldn’t. Out of the many EEO and Affirmative Action obligations that federal contractors have, midyear monitoring is really designed to help you meet your obligations.
On June 2, 2011, the Department of Labor (DOL) announced that it had published its “Preliminary Plan for Retrospective Analysis of Existing Rules,” and that the public was invited to submit comments on the plan by July 1, 2011. The preliminary plan is DOL’s next step in effecting compliance with Executive Order 13563, issued by President Obama on January 18, 2011. The Executive Order requires agencies to determine whether existing regulations “should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome in achieving the regulatory objectives.”
It’s back to square one in the efforts to install an Inspector General at the Department of Labor. On May 9, the White House announced that it was withdrawing the nomination of Paul Tiao. DOL stated that Tiao had requested that his nomination be withdrawn for personal reasons. DOL has been without a confirmed Inspector General since 2008, when Gordon Heddell left DOL to become the Inspector General for the Department of Defense. In May 2010, President Obama nominated Paul Tiao to the post, but his nomination ran into strong opposition from conservative organizations that cited his pro-union positions and his support for voting rights for illegal aliens. He was not confirmed during the last Congress, and on January 26, 2011, the President re-nominated him.
The Department of Labor launched its first application for smartphones yesterday. It’s a timesheet that enables employees to track the hours they work and determine the wages they are owed. At the moment, it’s compatible with only the iPhone and iPod Touch. Using the app, which is available in English and Spanish, employees can track their regular work hours, break time and any overtime hours for one or more employers. According to DOL, “This new technology is significant because, instead of relying on their employers’ records, workers now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.” The app has a link to the Wage and Hour Division’s website, and information about contacting Wage and Hour.
DOL’s foray into the world of smartphones underscores for employers the need to keep accurate records of the hours their employees work and to encourage their employees to speak to human resources personnel if they have questions about their pay.
Summer is almost here, and students will soon be adding to the ranks of the temporary work force. This is a good time for employers to make sure they know the rules about when they can legitimately treat a student as an unpaid intern, and when they must pay a student at least the minimum wage.
On April 5, 2011, the Department of Labor ("DOL") published final regulations under the Fair Labor Standards Act (“FLSA”). In earlier postings, I discussed DOL’s interpretation of the method for calculating overtime for employees on a fluctuating workweek and requirements regarding tipped employees. The subject of today’s post is the DOL’s requirement regarding public sector employers’ granting of comp time.
Last week, on April 26, 2011, the Office of Federal Contract Compliance Programs (OFCCP) published a long-anticipated Notice of Proposed Rulemaking (NPRM) in the Federal Register that would strengthen the affirmative action obligations imposed on federal contractors and subcontractors concerning veterans protected under the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), including disabled veterans. The proposal would impose some similar obligations as those currently applicable to women and minority group members under Executive Order 11246. Click on the following link to review the NPRM: OFCCP's Proposed VEVRAA Regulations.
On April 5, 2011, the Department of Labor ("DOL") published final regulations under the Fair Labor Standards Act (“FLSA”). In an earlier posting, I discussed DOL’s interpretation of the method for calculating overtime for employees on a fluctuating workweek. The subject of today’s post is the treatment of tip pooling arrangements and tip credits under the new regulations.
Since the public comment period closed March 4 on OFCCP’s proposed rescission on the Compensation Standards and Voluntary Guidelines, contractors that expended significant time and resources to develop SSEGs have wondered, “What now?” While OFCCP believes it “unnecessary” to issue new guidance on compensation analysis, apparently there is plenty going on behind the scenes at the Agency.
On April 5, 2011, the Department of Labor ("DOL") published final regulations under the Fair Labor Standards Act ("FLSA"). DOL states that the agency's purpose was to revise regulations that have become out of date because of subsequent legislation. DOL's pronouncement with regard to overtime calculations, however, was not based on a change in the law but, instead, on the current Administration's disagreement with the Bush Administration's proposal on how existing law should be interpreted.
For the first time since the Uniformed Services Employment and Reemployment Rights Act (USERRA) was enacted in 1994, and after years of other cases being litigated in the lower courts, the U.S. Supreme Court heard a USERRA based case and issued a decision involving that statute. On March 1, 2011, the Court reversed the decision of the U.S. Court of Appeals for the 7th Circuit and came down with a decision favorable to the reservist. The decision will also impact cases brought under other statutes, and may make it more difficult for employers to defend accusations of discrimination. The case is Staub v. Proctor Hospital, No. 09-400 (3/1/11), 562 U.S. _____ (2011).
The Solicitor's Office of the Department of Labor ("DOL") has a new top lawyer for the Fair Labor Standards Division. Jennifer Brand began her tenure as Associate Solicitor in the FLS Division on March 2, 2011. The Division is responsible for the litigation and preparation of regulations under the Fair Labor Standards Act, Family and Medical Leave Act, Davis-Bacon Act, Service Contract Act, Migrant and Seasonal Agricultural Workers Protection Act, and Employee Polygraph Protection Act, among other laws. The Division also provides day-to-day legal advice to the Wage and Hour Division of DOL. As noted on the Division's website, "'Labor Standards,' the basic protections established by Federal law for workers, is the unifying theme of this Division's work."
Injuries have plagued the Broadway stage production of "Spider-Man Turn Off the Dark," and on March 4, the production company became ensnared in an enforcement action by the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA). OSHA announced that day that it issued 8 Legged Productions LLC, the production company responsible for the popular musical, three serious violations of workplace safety standards following four separate incidents in late 2010 that resulted in injuries to cast members of the musical.
FortneyScott is a Washington, DC-based law firm counseling and advising clients on the full spectrum of workplace-related matters. We offer...
More