Labor Department Proposes New Rule for Multi-Employer Retirement Plans

Labor Department Proposes New Rule for Multi-Employer Retirement Plans

The US Department of Labor on Monday published a proposal for a new regulation governing multi-employer 401(k) plans. The proposed new rule would make it easier for small businesses to offer retirement plans to their employees by broadening the criteria under which organizations can form multi-employer plans, Employee Benefit News explains:

The arrangements are currently allowed for employers with an affiliation or connection, such as companies with a common owner or members of the same industry trade association. Under the proposed rule, MEPs could be formed by associations of employers in a city, county, state or a multistate metropolitan area, or in a particular industry nationwide, according to the DOL.

Sole proprietors, as well as their families, would be also permitted to join such plans, the DOL said. Professional employer organizations, which are human resources companies that contractually assume certain employment responsibilities for its client employers, could also sponsor plans.

The proposal comes in response to an executive order President Donald Trump signed at the end of the summer, directing his administration to remove barriers to small businesses offering retirement benefits through the multi-employer plans. Employees of smaller organizations are less likely than those at large firms to be offered employer-sponsored retirement plans.

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NLRB Proposes New, More Limited Joint Employer Standard

NLRB Proposes New, More Limited Joint Employer Standard

The US National Labor Relations Board announced on Thursday that it would publish a Notice of Proposed Rulemaking in the Federal Register today proposing a new version of the rule governing joint employer liability under the National Labor Relations Act:

Under the proposed rule, an employer may be found to be a joint-employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.

As explained in the Notice, rulemaking in this important area of the law would foster predictability, consistency and stability in the determination of joint-employer status. The proposed rule reflects the Board majority’s initial view, subject to potential revision in response to public comments, that the National Labor Relations Act’s intent is best supported by a joint-employer doctrine that does not draw third parties, who have not played an active role in deciding wages, benefits, or other essential terms and conditions of employment, into a collective-bargaining relationship for another employer’s employees.

Since regaining a Republican majority under President Donald Trump, the NLRB has sought to overturn a decision made during the Obama administration in 2015 that defined “joint employer” to include entities with which a business has indirect control, or a “horizontal” relationship, making them responsible for franchisees’ or contractors’ compliance with the Fair Labor Standards Act and other employee protection laws. Previously, organizations were only considered joint employers in the case of a “vertical” relationship, wherein an organization exerted direct control over its subordinate entity’s employees or the terms of their employment. Critics of the expanded definition say it creates too much uncertainty for businesses involved in subcontracting and franchise relationships about their employment liability.

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New York Caps New Ride-Share Licenses, May Establish Minimum Wage for Drivers

New York Caps New Ride-Share Licenses, May Establish Minimum Wage for Drivers

The New York City Council passed legislation on Wednesday to put a one-year cap on for-hire vehicle licenses and to empower the city government to set a minimum wage for ridesharing drivers, in a crackdown on the largely unregulated growth of platforms like Uber and Lyft, the New York Times reported:

The proposal to cap ride-hail companies led to a clash among interest groups with taxi industry officials saying the companies were dooming their business and Uber mounting a major advertising campaign to make the case that yellow cabs have a history of discriminating against people of color.

Mayor Bill de Blasio and Corey Johnson, the City Council speaker, said the bills will curtail the worsening traffic on the streets and improve low driver wages. … But Uber has warned its riders that the cap could produce higher prices and longer wait times for passengers if the company cannot keep up with the growing demand.

New York is the largest market for Uber in the US, but already regulated ridesharing more stringently than many other American cities. To address concerns about unfair competition from the local taxi industry, New York requires drivers to obtain special licenses from the city’s Taxi and Limousine Commission, along with commercial liability insurance and special plates for their vehicles, which must meet certain eligibility criteria.

The new will not affect Uber and Lyft drivers who are already licensed to operate in the city, but will pause the issuing of new licenses immediately while the city studies the effects of the rise of ridesharing on traffic, driver wages, and the local economy.

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OSHA Plans to Scale Back Workplace Illness and Injury Reporting Requirements

OSHA Plans to Scale Back Workplace Illness and Injury Reporting Requirements

The Occupational Safety and Health Administration of the US Department of Labor has issued a Notice of Proposed Rulemaking that “would amend OSHA’s recordkeeping regulation by rescinding the requirement for establishments with 250 or more employees to electronically submit information from OSHA Forms 300 and 301”:

OSHA is amending its recordkeeping regulations to protect sensitive worker information from potential disclosure under the Freedom of Information Act (FOIA). OSHA has preliminarily determined that the risk of disclosure of this information, the costs to OSHA of collecting and using the information, and the reporting burden on employers are unjustified given the uncertain benefits of collecting the information. OSHA believes that this proposal maintains safety and health protections for workers while also reducing the burden to employers of complying with the current rule.

OSHA illness, injury, and fatality reporting rules was introduced under the Obama administration in 2014 and 2016, requiring employers to report work-related fatalities and severe injuries to the administration and later to electronically submit injury and illness information to OSHA annually. The new administration’s rationale for the regulatory change is that “the electronic collection of case-specific forms … adds uncertain enforcement value, but poses a potential privacy risk under FOIA,” the notice states.

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UK Unveils Regulation Compelling Large Firms to Disclose, Explain Pay Ratios

UK Unveils Regulation Compelling Large Firms to Disclose, Explain Pay Ratios

Amid growing public and investor concern about major British companies potentially overpaying their top executives, the UK government has been kicking around the idea of instituting a pay ratio reporting rule since last year. The government hinted in April that it would propose the regulation soon, and now it is here. The proposal, which Business Secretary Greg Clark is presenting to Parliament today, will require all companies with more than 250 employees to disclose the ratio between the pay of their CEO and their average or median employee, as well as to explain this difference, the BBC reports:

The new rules, as well as introducing the publication of pay ratios, will also require listed companies to show what effect an increase in share prices will have on executive pay, in order to inform shareholders when voting on long-term incentive plans. … Mr Clark said: “Most of the UK’s largest companies get their business practices right, but we understand the anger of workers and shareholders when bosses’ pay is out of step with company performance.”

The plans were welcomed by the Investment Association – that represents UK investment managers – as well as business lobby group the CBI and think tank the High Pay Centre. Chris Cummings, chief executive of the Investment Association, said investors wanted greater director accountability and more transparency over executive remuneration.

That investors are leading the charge for transparency on executive compensation is unsurprising; activist investors were also key proponents of the pay ratio reporting rule that came into effect in the US earlier this year. Shareholders are voicing greater interest in exercising their “say on pay” prerogatives, particularly after recent scandals in the UK over executives receiving massive bonuses, in some cases without company performance justifying them.

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NLRB to Propose New Joint Employer Rules This Summer

NLRB to Propose New Joint Employer Rules This Summer

The US National Labor Relations Board intends to take the first step toward creating a new regulation regarding the definition of “joint employers” for federal regulatory purposes by the end of this summer, NLRB Chairman John F. Ring wrote in a letter to three Senators this week. The letter to Democrats Elizabeth Warren and Kirsten Gillibrand, and Independent Senator Bernie Sanders, was in response to a letter the legislators had sent to the board chairman expressing their concerns about the board’s intent to introduce a new joint employer standard through the federal rulemaking process.

“A majority of the Board is committed to engage in rulemaking,” Ring wrote in the letter dated June 5, “and the NLRB will do so. Internal preparations are underway, and we are working toward issuance of a Notice of Proposed Rulemaking (NPRM) as soon as possible, but certainly by this summer.”

The joint employer standard, which refers to an organization’s liability for the work conditions of individuals employed by its contractors or subcontractors, was expanded considerably during the Obama administration, when the NLRB ruled in a 2015 case called Browning-Ferris that a company was to be considered a joint employer if it had “indirect” control over the subcontractor’s terms and conditions of employment or “reserved authority” to exercise such control. The board reversed that decision in the Hy-Brand case decided late last year, but vacated its Hy-Brand ruling in February after one member of the board who participated in that decision, William Emanuel, was found to have a conflict of interest.

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Careful Who You Trust for GDPR Advice

Careful Who You Trust for GDPR Advice

The EU’s General Data Protection Regulation, which went into effect on May 25, imposes new data privacy obligations on all organizations that process the data of EU citizens, whether or not they are based in Europe themselves. The maximum penalties for noncompliance are hefty, so it is essential for businesses to ensure that their practices are GDPR-compliant if they haven’t already.

According to a survey on the eve of the regulation coming into effect, however, most organizations have not yet finished making the required changes, while many do not expect to be fully compliant by the end of this year. Much work still remains to be done to bring organizations into initial compliance with the regulation, and still more work to re-develop data collection, storage, and analytics programs in a compliant manner.

With every organization doing a huge amount of work for the first time and trying to get right with the GDPR as quickly as possible, this makes for a fertile environment for bad information to circulate and for opportunists to take advantage of organizations’ unfamiliarity with the new regulatory terrain. Organizational leaders need to be vigilant about which “experts” to trust for guidance on GDPR compliance, take advantage of the information provided directly by the European Commission, and bear in mind that different functions, particularly HR, face unique compliance challenges.

Step 1: Beware of Charlatans

The proliferation of bad advice and information is a simple matter of supply and demand. Demand for advice is high, both because of the global impact of the GDPR and because so many organizations were not proactive in planning for compliance are now scrambling to catch up. The supply of that advice is scarce and of uneven quality, with no historical track record of performance. Over the past few months, many companies have been assembling data protection functions and hiring data protection officers (DPOs), causing a run on the thin supply of qualified talent for these roles.

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