Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?

28 Pages·2013·1.29 MB·English

ADP TOTALSOURCE®
Employment Regulatory and
Enforcement Activity Is Already
Underway. Are You Ready?
An employer’s guide to new regulations and initiatives that are
currently being considered and implemented by federal agencies.
Vol. II
2013/2014 Issue
HR. Payroll. Benefits.
Contents
About the Report 1
Wages and Hours Worked 2
Immigration 6
Workplace Safety 10
Equal Employment Opportunity Commission 13
Federal Contractors 17
Conclusion 23
About ADP TotalSource® 23
About Jackson Lewis 23
About the Report
President Obama won the November 2012 election, Federal agencies have also openly stated their
while Republicans maintained control of the House commitment to change, as part of fulfilling their
of Representatives. However, with Democrats still overall mission statement. The new Secretary
holding control of the Senate, Congress remains of Labor, Thomas E. Perez, who was approved by
closely divided. As a result, continuing a trend the Senate in July 2013, fully supports statements
that started with the 2010 midterm Congressional made by his predecessor, Hilda Solis. In January
elections, there has been no new federal labor and 2013, Solis said, “We know the market alone will
employment legislation passed since early 2010. not protect workers and will not guarantee a secure
retirement… [DOL’s] regulatory work is crucial to
The legislative stalemate, however, has not slowed
protecting and strengthening the middle class.”
regulatory and enforcement activity by federal
agencies. Despite the Sequester — automatic The purpose of this special report is to provide
federal budget cuts that kicked in March 1, 2013 — employers with information to prepare for, and
many agencies, including the U.S. Department of plan for, the new regulations and initiatives and
Labor (DOL), Equal Employment Opportunity those that are currently being considered by
Commission (EEOC), Occupational Safety and federal agencies.
Health Administration (OSHA), Office of Federal
Are you ready?
Contract Compliance Programs (OFCCP), and
Department of Homeland Security (DHS) have
been busy changing and updating federal labor
The new Secretary of Labor,
and employment regulations and enforcing
Thomas E. Perez, who was
those regulations.
approved by the Senate in
In addition, many agency initiatives come from
outside the regulatory rule-making process. July 2013, fully supports
These initiatives and programs are not subject
statements made by his
to the strict rule-making process, which would
include public notice and an opportunity for the predecessor, Hilda Solis.
public to comment on the proposed rules. Such
initiatives and programs have the potential to
shape agency policy and can have an important
impact on employer operations.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready? 1
Wages and Hours Worked
The U.S. Department of Labor (DOL) is an agency boards.” This is not the DOL’s first attempt to put
that enforces many federal labor and employment its data, regarding purported violations, on the
laws discussed in this report, including laws Internet and in the public eye.
regarding workplace safety and federal contracting.
Employers must continue to strive for compliance
One of DOL’s divisions, the Wage and Hour Division,
with wage-and-hour laws, and should regularly
also enforces a key wage-and-hour law called the
monitor whether allegedly aggrieved individuals,
Fair Labor Standards Act (FLSA). This law has
attorneys or governmental entities — including
received renewed attention and vigor under the
the DOL through this or other initiatives — are
Obama administration. In federal FY 2012, DOL
publicizing any purported claims on the Web.
collected more than $97 million in back wages for
more than 124,000 employees.
In federal FY 2012, DOL
PEREz REPLACES SOLIS AS SECRETARy
OF LAbOR collected more than $97 million
In a move surprising to the employment
in back wages for more than
community, Secretary of Labor, Hilda Solis,
124,000 employees.
submitted her resignation to President Obama
in January 2013, creating a vacancy at the DOL’s
highest post.
D.C. CIRCuIT COuRT STRIkES DOWn 2010
DOL ADmInISTRATOR’S InTERPRETATIOn
On July 18, 2013, the Senate approved President
REgARDIng FLSA STATuS OF LOAn OFFICERS
Obama’s nominee, Thomas E. Perez, to replace
Solis and become the nation’s 26th Secretary of In 2010, the Department of Labor announced
Labor. Perez has spent his entire career in public it would cease its “opinion letter” practice,
service and joined the department on July 23, wherein employers could submit written
after serving as the assistant attorney general questions regarding application of the FLSA
for the Civil Rights Division at the U.S. Department and its implementing regulations, and receive
of Justice. Perez is expected to continue the guidance. Replacing the opinion letter structure
DOL’s tough stance on enforcement and was an “Administrator’s Interpretation,” in which
regulatory initiatives. the DOL would simply issue an advisory opinion
on its own volition. Contemporaneous with
“APP” COmPETITIOn TO InCORPORATE
announcing this new practice, the DOL issued its
EmPLOyER VIOLATIOn DATA
first Administrator’s Interpretation, and took the
Building upon its prior efforts to leverage position that mortgage loan officers generally do
contemporary technology, the DOL has announced not qualify for exemption from overtime under
an “app” competition, inviting the public to create the administrative exemption. This Interpretation
an app to incorporate its data regarding labor directly contradicted the DOL’s prior analysis of the
investigations “with consumer ratings websites, same issue (presented in the traditional opinion
geo-positioning Web tools, and other relevant data letter fashion) provided just four years previously.
sets, such as those available from state health In response to this DOL action, the Mortgage
2 Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
Bankers Association filed suit challenging the conditions may force Congress to give more
DOL’s authority to change its position. The Court consideration to the proposal than in prior years.
of Appeals for the District of Columbia Circuit
DOL COnTInuES “WE CAn HELP” CAmPAIgn
ruled that the DOL’s reversal violated the
AImED AT InCREASIng EnFORCEmEnT
Administrative Procedure Act (APA), and thus
the Administrator’s Interpretation is invalid. See “We Can Help” is a campaign designed to educate
Mortgage Bankers Ass’n v. Harris, 2013 U.S. App. workers about their rights under the FLSA. The
LEXIS 13470 (D.C. Cir. July 2, 2013). campaign includes, among other features, a
separate website with links to pages explaining
COngRESSIOnAL SubCOmmITTEE DEbATES
the rights of workers and Public Service
ExTEnSIOn OF “COmP TImE” unDER THE FLSA
Announcements — in both English and Spanish
FOR PRIVATE EmPLOyERS
by Hollywood stars, including Jimmy Smits
Revisiting a concept for the first time since and Esai Morales. Secretary Solis and Dolores
2009, a House of Representatives Subcommittee Huerta (co-founder of the United Farm Workers of
recently conducted a hearing regarding the America, AFL-CIO) also recorded PSAs in support
Working Families Flexibility Act (H.R. 1406). The of the campaign.
Act, proposed on April 9, 2013, seeks to amend
the FLSA to permit private-sector employers to
Employers must understand that
compensate employees for overtime work by
providing compensatory time off (e.g., “comp the burden is on them to obey
time”), in lieu of cash overtime wages. Under
the law, not on the DOL to catch
current law, only public-sector employers
are allowed to make such payments in lieu of them violating the law.
overtime pay.
Supporters cite the flexibility, particularly for “We Can Help” appears to be targeted toward
working families, that the availability of comp time specific industries, such as construction, day
provides. On the other hand, detractors claim that laborers and farm workers, and it clearly reaches
permitting payment for overtime work through out to noncitizens and/or undocumented workers.
time off will unfairly reduce the wages currently The campaign’s encouragement of self-action in
earned by nonexempt overtime eligible workers. employee record keeping, coupled with the media
blitz, will likely increase complaints filed with
“In amending the FLSA to permit public-sector
the DOL. To that end, the DOL added some 250
employers to provide compensatory time off,
additional investigators, in large part to support
Congress implicitly acknowledged the strain
this campaign.
on public budgets imposed by a cash overtime
requirement,” observed former Wage and Hour DOL COLLAbORATIOn WITH THE AmERICAn
Administrator Paul DeCamp. “The proposed bill bAR ASSOCIATIOn
acknowledges that the same budgetary strain
The DOL continues to partner with the American
attaches to overtime work for private-sector
Bar Association (ABA), which is a national
employers, many of whom are small or medium-
association of lawyers. Under this partnership,
sized businesses regulated by the FLSA through
FLSA or Family and Medical Leave Act (FMLA)
its expansive coverage provisions.”
complainants, who are informed that the DOL is
declining to pursue their complaint, are provided
While previous efforts to pursue such a rule
a toll-free number to contact a newly created,
change were unsuccessful, prevailing economic
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready? 3
ABA-sanctioned Attorney Referral System. The process. The employer cannot draft a plan and
DOL has also pledged to provide prompt, relevant then put it on a shelf. The plan must be fully
information and documents on the referred case implemented for the employer to comply with the
to complainants and the referral attorney electing “Plan/Prevent/Protect” compliance strategy.
to take the case including but not limited to a list
Protect: DOL will propose a requirement that the
of any violations found and the amount of back
employer or other regulated entity ensures that the
wages owed.
plan’s objectives are met on a regular basis. Just
DOL’S “PLAn/PREVEnT/PROTECT” any plan will not do. The plan must actually protect
REguLATORy InITIATIVE workers from violations of their workplace rights.
Pursuant to the DOL’s “Plan/Prevent/Protect”
Employers who fail to take these steps to address
initiative, employers and others must “find and fix”
comprehensively the risks, hazards, and inequities
violations — that is, assure compliance — before
in their workplaces will be considered out of
a DOL investigator arrives at the workplace.
compliance with the law and, depending upon the
Employers must understand that the burden is
agency and the substantive law it is enforcing,
on them to obey the law, not on the DOL to catch
subject to remedial action.
them violating the law. This is the heart of the
DOL’s new strategy. Simply put, the DOL hopes to
“RIgHT TO knOW” REguLATIOn
replace “catch me if you can” with “Plan/Prevent/
Protect,” if a regulation is finalized. This proposed rule (Right to Know
Although the specifics would vary by law, industry under the Fair Labor Standards
and regulated enterprise, this strategy would
Act) has generated interest in the
require (at some unknown point in the future) all
regulated entities to take three steps to ensure employer community because of
safe and secure workplaces and compliance with
the potential burden and cost that it
the law:
would place on employers.
Plan: DOL will propose a requirement that
employers and other regulated entities create
a plan for identifying and remediating risks of
legal violations and other risks to workers — From an employer’s perspective, one of the most
for example, a plan to review potentially unlawful difficult challenges associated with the FLSA is
pay practices. The employer would provide properly classifying employees as exempt or non-
their employees with opportunities to participate exempt. This is an important distinction. Exempt
in the creation of the plans. In addition, the plans employees are not entitled to be paid overtime,
would be made available to workers so they while nonexempt employees are.
can fully understand them and help to monitor
DOL has proposed a new rule, entitled the
their implementation.
“Right to Know under the Fair Labor Standards
Prevent: DOL will propose a requirement that Act,” that would require employers to produce a
employers thoroughly and completely implement written “classification analysis” to justify exempt
the plan in a manner that prevents legal employee status (and/or independent contractors
violations. The plan cannot be a mere paper status) for each employee. This proposed rule has
4 Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
generated interest in the employer community capture information on types of pay not currently
because of the potential burden and cost that it addressed, “such as tips, commissions, bonuses,
would place on employers. deductions, holiday pay, pay for weekends, shift
differentials and pay for regular days of rest.”
DOL LAunCHES TImESHEET APPLICATIOn
FOR SmARTPHOnES
What happens when an employee is misclassified
as exempt by an employer? That employee may
be owed several years of overtime compensation
(and additional penalties may apply). In order to
determine the amount of compensation due, the
DOL may ask the employee to construct a record
of hours worked. This has now become an easier
task for employees.
The DOL launched its first application for
smartphones, described as “a timesheet to help
employees independently track the hours they
work and determine the wages they are owed.”
Users can track regular work hours, break time,
and any overtime hours they work for one or more
employers, according to the DOL press release
on the application. The free “app” is compatible
with iPhone® and iPod touch® and is available in
English and Spanish.
The DOL predicts that workers’ information
“could prove invaluable” during an investigation of
employers accused of failing to maintain accurate
time records. Indeed, the app will allow workers
to “email the summary of work hours and gross
pay as an attachment” to DOL investigators. The
app provides a “[glossary, contact information and
materials about wage and hour laws through links
to the Web pages of the department’s Wage and
Hour Division.” According to former Secretary of
Labor Solis, “This app will help empower workers
to understand and stand up for their rights when
employers have denied their hard-earned pay.”
The DOL also is considering future updates to
enable use on other smartphone platforms,
such as AndroidTM and BlackBerry®, and to
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready? 5
Immigration
As noted on the website of the Department of nEW VIDEO EDuCATES EmPLOyERS AbOuT THE
Homeland Security (DHS) by (then) Secretary I-9 PROCESS
of Homeland Security, Janet Napolitano, “DHS
The Department of Justice (DOJ) has launched
has forged a smart and effective approach to
a new educational video to assist employers
enforcing our immigration laws and prioritizing
in avoiding charges of discrimination in the
public safety while targeting criminal aliens and
employment eligibility verification Form I-9 process
aggressively pursuing employers that knowingly
and in the use of E-Verify. The video also aims to
take advantage of illegal labor.” While at the time
help educate employees about their legal rights.
of writing this special report, Napolitano has
resigned and has not yet been replaced, there
Employers using E-Verify also
is no doubt that DHS will continue to focus on
businesses that hire undocumented workers, may improperly request
and not the workers themselves.
specific documents due to a
misunderstanding of E-Verify
requirements.
The Office of Special Counsel for Immigration-
Related Unfair Employment Practices (OSC)
within the DOJ’s Civil Rights Division enforces the
antidiscrimination provision of the Immigration
and Nationality Act (INA). That provision
prohibits employers from discriminating against
This change in approach — from one that
work-authorized individuals in hiring, firing,
emphasized punishing the illegal foreign worker
recruitment, or referral for a fee, regardless of
to one that emphasizes punishing the employer
their citizenship status or national origin. The law
that hired the worker — is designed to reduce
also prohibits discrimination during the Form I-9
the demand for illegal employment by focusing
and E-Verify processes.
on employers suspected of employing illegal or
unauthorized workers. The OSC has developed its latest video to address
issues that frequently arise from calls to its hotline
It is also an approach that is being supported by
and charges that are filed. The DOJ explained
stepped-up regulatory enforcement. Under the
that employers sometimes incorrectly believe
Obama administration, DHS has conducted more
they need to request more documents than are
audits and debarred more employers for hiring
necessary for the employment eligibility verification
illegal immigrants than in the entire tenure of
Form I-9. Employers using E-Verify also may
the prior administration. Employers should
improperly request specific documents due to a
take notice.
6 Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
misunderstanding of E-Verify requirements. The Relations Board (NLRB) that will allow both
new video highlights some of the practices that are agencies to share information, to refer matters to
not permissible and may lead to claims under the each other concerning potential violations of the
INA’s antidiscrimination provision. laws governed by the respective agencies, and to
coordinate multiagency investigations.
uSCIS mAy bE COnTACTIng yOuR EmPLOyEES
The MOU was designed to encourage employees
On July 1, 2013, U.S. Citizenship and Immigration
to seek redress for violations under the
Services (USCIS) announced its latest “customer
appropriate laws and through the appropriate
service enhancement” to E-Verify. If an employee
federal agencies, even though such a claim
voluntarily provides his or her email address on
may have been initially brought to the attention
the Form I-9, E-Verify will notify the employee
of the wrong agency. “Employers cannot avoid
directly of a Tentative Non- Confirmation (TNC) at
liability under the law just because an employee
the same time it notifies the employer. Given that
has turned to the wrong agency or is unaware of
E-Verify monitors how an employer complies in
additional protections available under a different
a timely manner with its contractual obligations
law,” said Gregory Friel, Deputy Assistant Attorney
to the Government, employers must review their
General for the Civil Rights Division.
standard operating procedure to ensure it does not
run afoul of the law.
Employers must use the new Form
But now that E-Verify is also “deputizing”
employees — by notifying them and encouraging I-9 beginning on May 7, 2013 or they
them to report alleged discrimination or unfairness
will be subject to penalties…
— employers must also confirm that information
being transmitted via E-Verify to the Government
mirrors the documents provided by the new hire,
The MOU will allow the OSC to make referrals to
and that each employee is treated in a uniform
the NLRB with the express authorization of the
and consistent fashion. Systems may have to be
complaining party when the matter investigated
implemented to provide such assurance.
by the OSC suggests a violation of the NLRA.
In addition to providing the initial notice of a TNC, Likewise, the OSC can expect to receive referrals
E-Verify will send reminder emails to employees if from the NLRB when the matter before it
no action to resolve the TNC has occurred within suggests a possible unfair immigration-related
four days of a decision to contest and notify them employment practice, such as demanding specific
about the possible need to update a Social Security documentation for the employment authorization
or Department of Homeland Security record. verification process for completion of the Form I-9
form or discrimination based on citizenship status
FEDERAL AgEnCIES TO COOPERATE TO
or national origin. The MOU further provides for
InCREASE PROSECuTIOnS FOR ImmIgRATIOn-
cross training between the two federal entities,
RELATED mATTERS
as well as technical assistance for identifying and
The United States Department of Justice making appropriate referrals. The OSC maintains
announced on July 8, 2013, that its Civil more than 50 similar agreements with other
Rights Division’s Office of Special Counsel federal, state, and local agencies including the
for Immigration–Related Unfair Employment Equal Employment Opportunity Commission (EEOC).
Practices (OSC) has entered into a Memorandum
of Understanding (MOU) with the National Labor
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready? 7
The NLRB, often inaccurately thought of as being
interested only in collective bargaining and
union organizing issues, has in recent years
pursued violations by nonunion employers.
Among other things, the NLRB has brought to
light violations in common workplace policies at
numerous, unwary, employers.
nEW FORm I-9 muST bE uSED bEgInnIng
mAy 7, 2013
On April 9, 2013, U.S. Citizenship and Immigration
Services (USCIS) published a notice in the Federal
Register clarifying the date by which the new Form
I-9 must be used instead of prior versions of the
DHS, Immigration and Customs Enforcement
form. Employers are advised that they must use the
(ICE) filed a complaint alleging that Anodizing
new Form I-9 beginning on May 7, 2013, or they will
Industries, Inc. of Los Angeles, California, had
be subject to penalties under Section 274A of the
hired 26 named employees for whom it failed to
Immigration and Nationalization Act (INA).
timely prepare Forms I-9 within three days of their
start dates. The length of time between the start
dates of the employees and dates of completion
An employer who failed to
of their respective Form I-9 form ranged from
complete a Form I-9
a matter of weeks to 22 years. The company
argued that it had complied in good faith with the
Employment Eligibility
employment verification requirements in hiring
Verification Form within the 26 employees, and that the proposed fines
were excessive and should be mitigated under
three days of an employee’s
the statutory penalty factors. ICE sought a total of
start date commits $25,525.50 in civil money penalties.
a substantive violation…
The Administrative Law Judge (ALJ) held that a
failure to prepare a Form I-9 when hiring a new
employee is not a technical or procedural failure,
gOOD FAITH nOT A DEFEnSE TO SubSTAnTIVE
but rather is substantive in nature. Moreover,
I-9 VIOLATIOnS
the failure to prepare a Form I-9 in a timely
An employer who failed to complete a Form I-9 fashion not only is a substantive violation, but
Employment Eligibility Verification Form within also a serious one because, the ALJ explained,
three days of an employee’s start date commits an employee working on the job could be
a substantive violation for which the good faith unauthorized for employment during the entire
defense is not available to mitigate the assessed time his or her eligibility remains unverified.
fine, according to a recent ruling from the Office of Furthermore, the longer an employer delays
the Chief Administrative Hearing Officer (OCAHO) in preparing a Form I-9, the more serious is
of the Department of Justice’s Executive Office for the violation.
Immigration Review. See United States of America
v. Anodizing Industries Inc., OCAHO Case No.
12A00030, May 24, 2013.
8 Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?