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Labor Dept. resumes providing guidance on wage and hour laws

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The U.S. Department of Labor is reinstating the issuance of opinion letters.  The letters, issued by the department’s Wage and Hour Division, is one of its methods the department uses to provide guidance to covered employers and employees.

An opinion letter is an official, written opinion by the Wage and Hour Division of how a particular law applies in specific circumstances presented by an employer, employee or other entity requesting the opinion. The letters were a division practice for more than 70 years until being stopped and replaced by general guidance in 2010.

“Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” says Labor Secretary Alexander Acosta. “The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their businesses and creating jobs.”

The division has established a webpage where the public can see if existing agency guidance already addresses their questions or submit a request for an opinion letter. The webpage explains what to include in the request, where to submit the request, and where to review existing guidance. The division will exercise discretion in determining which requests for opinion letters will be responded to, and the appropriate form of guidance to be issued.

Implementation of Labor Department’s Dec. 1 overtime rule stopped

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DOLA Texas court has issued a nationwide preliminary injunction stopping implementation of the Department of Labor’s (DOL) rule to more than double the current salary threshold for certain exemptions from overtime pay.

The court ruled on November 22, just a few days before its December 1, 2016 implementation date.

The court ruling came in response to lawsuits filed by 21 states, the U.S. Chamber of Commerce, and other business groups.  The plaintiffs argued that the DOL exceeded its statutory authority in raising the salary threshold and by providing for the automatic adjustment of the threshold every three years.

  • The DOL rule would raise the salary threshold from $23,660 to $47,476 annually, more than doubling the minimum annual salary a worker can earn and qualify for an exemption from the overtime pay provisions of the Fair Labor Standards Act.
  • DOL’s rule would also adjust the threshold every three years based on the 40th percentile of wages for full-time salaried workers in the lowest wage earning geographic area captured by the U.S. Census.

The preliminary injunction issued by the court cites concerns that the rule improperly created a salary test that would consume Congressional intent that the exemption be based on the type of duties performed. Additionally, the court found merit in plaintiffs’ argument that states would be irreparably harmed by implementation of the rule before a final decision by the court because states facing budget restraints would have to expend a substantial sum of unrecoverable public funds to increase salaries or pay overtime to employees and may possibly have to layoff or reorganize workforces causing a substantial interference in government services.

A preliminary injunction is not permanent, but it does preserve the current rule while the court deliberates the merits of the case. As a result, the new rule will not take effect on December 1, 2016, and employers may continue to classify employees as exempt if they pay employees at least $23,660 annually on a salary basis and if the employees meet the appropriate duties test.

DOL’s rule could still become effective if the Texas court does not issue a permanent injunction or otherwise rule against the DOL.  The Labor Department is expected to challenge the ruling.

Because the preliminary injunction could be lifted on short notice, legal experts advise that employers should continue to prepare for changes called for in DOL’s rule.

Critical preparation considerations are discussed by the Piliero Mazza law firm at: http://www.pilieromazza.com/blog/far-reaching-impact-of-dols-increase-to-flsa-salary-thresholds

DOL finds Senate food services contractors broke law

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Wage & Hour DivisionContractors hired by the Architect of the Capitol must award a total of $1 million in back pay to hundreds of cafeteria workers due to violations of the federal prevailing wage law, the Labor Department announced last Tuesday.

Restaurant Associates and its subcontractor Personnel Plus will pay 674 food servers and cooks a collective $1,008,302 because of improper job classifications that violated the McNamara-O’Hara Service Contract Act, Labor’s Wage and Hour Division said. The companies paid the workers for lower-skilled jobs than they actually performed, forced them to report for work early and failed to pay overtime at proper rates, according to the decision.

In addition, the contractors failed to pay required health and welfare benefits and violated the McNamara-O’Hara Act’s recordkeeping requirements.

Keep reading this article at: http://www.govexec.com/contracting/2016/07/labor-department-finds-senate-food-services-contractors-broke-law/130262

 

Labor Dept. to require paid sick leave for workers of federal contractors

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Dept. of LaborThe Department of Labor (DOL) is requiring federal contractors, subcontractors and certain parties who contract with the Federal Government to provide their employees with up to 7 days of paid sick leave annually, implementing Executive Order 13706, which was signed by President Obama on September 7, 2015.

The proposed rule applies to new contracts or contract-like instruments, if:

(i)(A)  it is a procurement contract for services or construction; (B) a contract covered by the Service Contract Act; (C)  a contract for concessions; and (D) a contract entered into with the Federal government in connection with Federal property or lands related to offering services for Federal employees, their dependents, or the general public; and

(ii) the wages of employees under such contract are governed by the Davis-Bacon Act, the Service Contract Act, or the  Fair Labor Standards Act (FLSA), including employees who qualify for an exemption from the FLSA.

DOL estimates that the proposed rule will cost each small business $150-$650 for the first year in implementation costs and payroll costs.

Comments are due to the DOL by March 28, 2016.     

 

Executive Orders unfairly used to force ideals, contractors say

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President Barack Obama took office in 2009 promising to regulate only when necessary, but federal contractors say he is using regulation now to promote his social agenda.

EEAC“There is, I think, a long history of trying to enact change, policy you can’t get through Congress, by looking to federal contractors first,” said Michael Eastman, vice president of public policy at the Equal Employment Advisory Council (EEAC), which represents federal contractors.

Case in point is the president’s Executive Order No. 13,673 on Fair Pay and Safe Workplaces. The order, signed on July 31, 2014, is intended to ensure contractors comply with 14 federal labor laws or equivalent state laws.

The proposed regulation implementing the order cites three studies as proof that federal contractors need better incentives to comply with labor laws. The research found a total of 104 federal contractors with egregious violations over the past decade, or about 0.4 percent of 24,000 federal contractors nationwide.

Keep reading this article at: http://www.bna.com/executive-orders-unfairly-n57982064078/

New regulations will change business for Government contractors

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The Administration has been active in promulgating Executive Orders (E.O.) that affect the stakeholders in the Government contracting process.  On July 31, 2014, the President signed Executive Order 13673, “Fair Pay and Safe Workplaces.”  The E.O.states that it “improve[s] the federal contracting process.” But it will create a burden for prime contractors, subcontractors, and their agency customers. It will place increased importance on avoiding any type of adverse ruling involving an employment-related or safety-related claim.

Dept. of LaborAs all Government contractors are aware, a contract may be awarded only after a federal agency determines that the prospective contractor is “responsible” in accordance with Part 9 of the Federal Acquisition Regulation (FAR). Under this E.O., a company’s compliance with 14 federal labor statutes, as well as unnamed state labor statutes, will now be a factor that agencies and prime contractors must consider prior to awarding a contract or subcontract over $500,000.

The FAR Council issued a proposed rule (FAR Case 2014-025) on May 28, 2015, amending the FAR to implement E.O. 13673.  80 Fed. Reg. 30548. On that same day, the Department of Labor (DOL) issued extensive “guidance” on the E.O.  80 Fed. Reg. 30573.  Comments on the proposed regulations were originally requested by July 27, 2015, but that deadline has been extended twice and is now August 26, 2015. Your company, or an association representing your industry, may have already filed comments on the proposed regulation; regardless, it is very important that your company focus on the requirement and take immediate steps to prepare for its implementation.

Keep reading this article at: http://www.lexology.com/library/detail.aspx?g=e1853900-11d2-43a0-a8db-2418a038249c

DOL releases final rule raising minimum wage for employees working on covered federal contracts

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On October 1, the Department of Labor (“DOL”) announced its final rule raising the minimum wage for employees working on covered federal government contracts from $7.25 an hour to $10.10 an hour.  The final rule implements Executive Order 13658, which was issued by President Obama last February.

The final rule applies to a wide range of contracts issued for solicitations on or after January 1, 2015, including (1) procurement contracts for services or construction; (2) service contracts exceeding $2,500 covered by the Service Contract Act; (3) contracts for concessions; and (4) contracts that are both (a) entered into the with the Federal Government in connection with Federal property or lands and (b) covered by the Fair Labor Standards Act, Service Contract Act, or Davis-Bacon Act.  The rule also applies to (1) individuals with disabilities who were previously paid below the minimum wage because their disability affects their productivity; and (2) tipped employees, whose minimum hourly pay will be raised from $2.13 to $4.90.

Keep reading this article at http://www.mondaq.com/article.asp?articleid=344992 for details on employees covered, impact on employers, and next steps.

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