US Labor Department Adopts New, Flexible Standard for Regulating Internships

US Labor Department Adopts New, Flexible Standard for Regulating Internships

Earlier this month the US Department of Labor announced that it was revising its test for determining whether interns count as employees entitled to protections under the Fair Labor Standards Act, citing recent federal court rulings that rejected the previous test:

The Department of Labor today clarified that going forward, the Department will conform to these appellate court rulings by using the same “primary beneficiary” test that these courts use to determine whether interns are employees under the FLSA. The Wage and Hour Division will update its enforcement policies to align with recent case law, eliminate unnecessary confusion among the regulated community, and provide the Division’s investigators with increased flexibility to holistically analyze internships on a case-by-case basis.

The department has issued a fact sheet explaining the standard it will enforce going forward, which is more flexible than the previous test and is based on the rubric the courts have used to judge who is the “primary beneficiary” of the internship and the “economic reality” on which it is based:

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OSHA Scales Back on Workplace Fatality Reporting

OSHA Scales Back on Workplace Fatality Reporting

Responding to concerns from the US Chamber of Commerce that its previous reporting standards were unfair to employers, the US Occupational Safety and Health Administration has decided to reduce the amount of information it publicizes about fatalities in American workplaces, the Wall Street Journal reports:

The publication of the reports—listing the names, locations, employers and circumstances of people who were reported to OSHA as having died in apparent accidents at work—began early in the Obama administration. Before that, OSHA did compile some information about fatalities, according to former OSHA officials. But they said Obama administration officials made the reports more publicized and included additional information.

Last week, OSHA removed links to reports going back to 2009 from its website. Instead, the agency posted a more limited set of information about U.S. workplace fatalities that resulted in citations for companies dating back to the beginning of the year. An OSHA spokeswoman said the new fatality-data listing respects the privacy of surviving family members because they don’t give out the name of the worker who died.

The Chamber of Commerce and other business groups had objected to the Obama-era administration’s approach on the grounds that publicizing the details of workplace accidents before they could be investigated risked unfairly tainting companies with reputations as unsafe places to work.

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Labor Department Issues Request for Comments on Overtime Rule

Labor Department Issues Request for Comments on Overtime Rule

The US Department of Labor has begun the process of revising or reversing the controversial new overtime rule enacted by the Obama administration last year, which would have raised the salary threshold at which employees are exempt from overtime pay from $23,660 to $47,476, but was held up in court before coming into effect. The Trump administration indicated earlier this month that it was planning to rewrite the rule, and on Tuesday, the Labor Department issued a request for information, soliciting public comments on the rule as a first step toward amending it, Reuters reported.

Specifically, the department is asking for input on whether and how to update the current salary threshold, or whether to eliminate the threshold entirely and base overtime eligibility solely on the “duties test.” It also wants to know how last year’s rule change and the injunction blocking it affected employers, many of whom raised salaries in anticipation of the rule and in some cases intend to keep those raises in place regardless of what happens in Washington. At TLNT, Seyfarth Shaw attorney Alex Passantino, a former acting administrator of the DOL’s Wage and Hour Division, provides a detailed overview of the questions included in the RFI, such as:

  • Should the 2004 salary test be updated based on inflation? If so, which measure of inflation?
  • Would duties test changes be necessary if the increase was based on inflation?
  • Should there be multiple salary levels in the regulations? Would differences in salary level based on employer size or locality be useful and/or viable?
  • Should the Department return to its pre-2004 standard of having different salary levels based on whether the exemption asserted was the executive/administrative vs. the professional?

The question of whether to differentiate salary thresholds by local cost of living is potentially the key innovation in the Trump administration’s proposed overhaul of the rule. Talking to SHRM’s Allen Smith, Passantino and other employment attorneys discuss how this might work—or indeed, whether it would work at all:

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Trump Signs Bills Reversing ‘Blacklisting Rule’, Other Obama Regulations

Trump Signs Bills Reversing ‘Blacklisting Rule’, Other Obama Regulations

In fulfillment of his campaign pledge to slash US federal regulations, US President Donald Trump on Monday signed four bills reversing rules created by the Obama administration, including the heavily criticized “blacklisting rule” that would require federal contractors to disclose recent labor law violations and allegations thereof and potentially be barred from doing business with the government. According to USA Today, the regulations repealed on Monday also include a Bureau of Land Management rule that expanded the federal government’s role in land use planning and two regulations regarding school performance and teacher training:

The resolutions of disapproval reached the president’s desk through the Congressional Review Act, a rarely used tool that allows Congress to fast-track a bills to reverse regulations. Before Trump, the law had been used successfully only once in its 21-year history.

Trump has now signed a total of seven, a pace that has surprised even experts. “There are several that weren’t on my radar at all,” said Susan Dudley, director of the Regulatory Studies Center at George Washington University. … Trump’s action effectively precludes federal action on any of those rules, since the administration is now barred from issuing any new rule that is “substantially similar” to the ones that were just overturned.

The so-called blacklisting rule, officially titled the “Fair Pay and Safe Workplaces” rule, was already held up in court after a Texas judge ruled last October that it violated employers’ due process and First Amendment rights and issued a preliminary injunction blocking it from taking effect. The rule was widely expected to be among the prime candidates for repeal by the new administration and the Republican Congress: The resolution Trump signed on Monday had been in the works since February. At Lexology, Richard W. Arnholt of Bass, Berry & Sims PLC points out that the rule was never likely to survive anyway:

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Is OSHA’s Decision to Stop Publicizing Fines a Hint at Deregulation to Come?

Is OSHA’s Decision to Stop Publicizing Fines a Hint at Deregulation to Come?

The Occupational Safety and Health Administration is one of many US federal agencies whose regulatory agenda is expected to shrink considerably under the Trump administration, after having introduced new rules and stepped up enforcement activities during the Obama administration. Now, Barry Meier and Danielle Ivory write in a New York Times feature, OSHA is still actively enforcing safety regulations, but the Labor Department has stopped publicizing the fines the administration issues to violators since President Donald Trump took office in January. Advocates of stronger workplace safety regulations see this is a step toward loosening OSHA regulations, or loosening their enforcement:

“The reason you do news releases is to influence other employers” to clean up their acts, said David Michaels, who was an administrator of [OSHA] during much of the Obama administration.

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Trump Takes Aim at Fiduciary Rule, Financial Regulation

Trump Takes Aim at Fiduciary Rule, Financial Regulation

US President Donald Trump signed two executive orders on Friday: one ordering a review of regulations imposed on the financial sector under the Dodd-Frank Act of 2010, and the other ordering a review of the “fiduciary rule,” which requires financial advisors to act in their clients’ best interests when advising them about retirement, NPR reports:

These executive actions are the start of a Trump administration effort to reverse or revise financial regulations put in place by the Obama administration and seen by Trump and his advisers as onerous and ineffective. …

Echoing arguments of the financial services industry, the Trump administration official said the [fiduciary] rule would have unintended consequences if allowed to go forward. The industry says the rule will make it harder for advisers to serve lower-income clients. Backers of the rule say it will prevent advisers from gouging customers by selling them inappropriate, high-fee products. Once the review is complete, the official said, it’s possible the Labor Department could determine the rule is completely unnecessary.

The Trump team has had their sights on the fiduciary rule, drawn up by the Labor Department last April, for a while, and the business community had lobbied the president to rescind it. Friday’s order does not immediately cancel the rule, but gives the department the discretion to revise or discard it and prevents the rule from taking effect as scheduled on April 10.

A senior Trump administration official tells the Wall Street Journal that Friday’s orders are just the start of the administration’s deregulation agenda:

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Puerto Rico Governor Signs Controversial Labor Reform Bill

Puerto Rico Governor Signs Controversial Labor Reform Bill

Puerto Rico’s new governor Ricardo Rosselló signed a bill last week that comprehensively reforms the commonwealth’s employment laws as part of a strategy to revitalize the Puerto Rican economy by lowering the cost of doing business there, the Associated Press reported:

The law approved on Thursday implements flexible scheduling, cuts the amount of a mandatory Christmas bonus, reduces vacation days and overtime pay from double time to time-and-a-half, and implements a nine-month probation period for most workers. It also strikes down a previous law that authorized extra pay for those working on Sundays and allowed businesses to remain closed from 5 a.m. to 11 a.m. on Sundays. …

The law implements some of the changes sought by a federal control board created by Congress last year that said Puerto Rico regulations tied to employee retention, severance pay, flexible scheduling and mandatory vacation days and pensions should reflect U.S. standards.

The new law now allows private employees to work 10 hours a day for four days without earning overtime, and it increases unemployment benefits from a maximum of $133 to $240 a week. However, concerns remain as the island of nearly 3.5 million people struggles to emerge from a deep economic crisis and battles a 12 percent unemployment rate, compared with a U.S. average of nearly 5 percent.

Critics of the law say it will drive skilled professionals to the mainland US and impoverish working-class Puerto Ricans, but economist Gustavo Velez told the AP that even with these changes in place, Puerto Rico would still provide more generous employee benefits under the law than any US state. The change is part of a series of pro-market reforms and austerity measures being enacted by Rosselló to try to pull the island out of compound fiscal and economic crises.

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