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By Ben Penn
Nov. 20 — The Labor Department is now targeting a July 2016 release of the highly anticipated and contentious final rule to raise the overtime pay exemption threshold, while a rule on federal contractors' employment law violations was originally absent from next year's plans but is now slated for April, according to the fall 2015 semiannual regulatory agenda published by the Office of Management and Budget late Nov. 19.
The DOL's Wage and Hour Division is in the midst of reviewing nearly 300,000 comments received (33 HRR 974, 9/14/15) on the proposed rule, issued in June (33 HRR 709, 7/6/15), which would update the Fair Labor Standards Act by more than doubling the minimum salary for the overtime exemption to $50,440 per year from $23,660.
The proposal is seen as a major part of President Barack Obama's agenda to raise wages and is at the top of the DOL's list of regulatory priorities in the administration's final full year. It has come under attack from the business community for being needlessly expensive, potentially costing jobs and curtailing career advancement. Labor unions and worker advocates strongly support the proposal, saying it provides a necessary revision to reflect cost-of-living increases and stagnant wages.
Federal agencies don't always adhere to the regulatory agenda's timetable, with delays particularly likely for highly consequential regulations. In an unusual action, an agenda item regarding Obama's executive order on fair pay and safe workplaces for employees of federal contractors was moved from one category to another less than 24 hours after the initial release of the agenda.
When the fair pay executive order was issued in 2014 (32 HRR 819, 8/4/14), Obama said he expected the rule to take effect in 2016.
The proposed rule, which the U.S. Chamber of Commerce and other employer groups have dubbed the “blacklisting” rule, would require prospective and existing government contractors to disclose any violations of labor and employment laws in the prior three years. Before awarding a federal contract, a contracting officer would first need to determine that the company “is a responsible source to do business with the Federal Government,” according to the Federal Acquisition Regulatory Council's proposed rule.
Last May the FAR issued a proposed rule to implement the executive order, and the DOL issued proposed guidance (33 HRR 567, 6/1/15).
When the regulatory agenda initially was released the evening of Nov. 19, a final rule to implement the fair pay executive order was absent from the FAR Council's list of planned actions over the next 12 months and instead was in the long-term actions section. Long-term actions are considered by the OMB as rulemakings “under development but for which the agency does not expect to have a regulatory action” in the next year.
After questions were raised Nov. 20, the rule was moved to FAR's action list later that day, listing April 2016 for final publication. The DOL's portion of the regulatory agenda doesn't include subagency guidance and so does not indicate when the final guidance is expected to be completed.
In response to a request for comment, a DOL spokeswoman referred Bloomberg BNA to the FAR Council and OMB. Emily Cain, an OMB spokeswoman, told Bloomberg BNA in a Nov. 20 e-mail, “This was an oversight that was immediately amended when it was brought to our attention.”
Marc Freedman, director of labor law policy at the U.S. Chamber of Commerce, told Bloomberg BNA Nov. 20 that placement of a rulemaking in the long-term action section “is the regulatory graveyard.” He called the final rule's initial absence from 2016 actions the most significant part of the agenda. Informed later Nov. 20 of the OMB's shift to an April release, Freedman said: “They had it listed as a long-term action. I'm not sure how they all of a sudden decided it would come out in April.”
Judy Conti, the federal advocacy coordinator of employee advocacy group the National Employment Law Project, disagreed with Freedman's assertions that the fair pay rule may no longer be a DOL priority. Conti, who supports the rule, told Bloomberg BNA Nov. 20, before she was aware of the placement switch, that the DOL might still publish it in 2016.
“When they can't give an answer with enough specificity, it automatically gets qualified as long-term, even when it isn't necessarily long-term,” she said. “There was extensive commentary. It's a complicated and nuanced subject matter that the Department of Labor is being very careful and reasoned about.”
The DOL's proposed guidance elicited heated responses, with industry groups calling it vague and burdensome and unions and other worker advocates hailing it as a step toward better working conditions for contractors' employees (33 HRR 977, 9/14/15).
The regulatory agenda also showed that the DOL plans on publishing a final “persuader” rule in March, nearly five years after the Office of Labor-Management Standards first proposed expanding employer disclosure requirements about lawyers and other consultants hired to help combat organizing and collective bargaining activities (29 HRR 682, 6/27/11).
Deputy Labor Secretary Chris Lu told Bloomberg BNA Oct. 27 that the agency remains “committed” to issuing a final persuader rule despite the delays.
However, some Republican lawmakers and employer-side lobbyists said they expect attorney-client confidentiality concerns to prevent the issuance of a final version.
Elsewhere on the regulatory agenda, the department's Employment and Training Administration has seven rules on the horizon.
This includes two final rules implementing the Workforce Innovation and Opportunity Act (33 HRR 373, 4/13/15), with a deadline in January.
The WIOA rules, one of which will be jointly published with the Department of Education, were the only two items to receive a legal deadline rather than an expected timetable, because the WIOA imposes a hard deadline of Jan. 18 on the agencies.
The ETA's proposal is intended to improve the nation's job training system and strengthen workforce investments, with a particular emphasis on ensuring they lead to quality jobs at the back end.
Other ETA action items included a proposed rule in April to modernize the Permanent Labor Certification Program governing foreign workers, and a final rule in March allowing state unemployment compensation programs to conduct drug testing on applicants.
In addition to the overtime rule, the Wage and Hour Division expects to release a proposed rule in September requiring federal contractors to provide employees with paid sick leave. This would implement another executive order from Obama, signed in September (33 HRR 960, 9/14/15).
Another WHD prospective action attracting significant attention, despite still being in the pre-rulemaking stage, is the agency's request for information, slated in the agenda for February, on how employees' use of electronic devices affects work performed outside of regular office hours.
The DOL initially said it would seek input by the end of August (33 HRR 901, 8/24/15), but according to the agenda, it is still a few months away from publishing a request for information to ascertain “employees’ use of electronic devices to perform work outside of regularly scheduled work hours and away from the workplace, as well as information regarding last minute scheduling practices being utilized by some employers that are made possible in large part by employees’ use of these devices.”
The Chamber's Freedman said the RFI stems from concerns the employer community brought to the labor secretary about the overtime proposal that “if you change the criteria for exemptions so dramatically, one consequence will be the employers will no longer give employees smartphones and let them work remotely, because they'll be on the clock.” Freedman is wary that the final overtime regulation could require employers to classify time employees spend on electronic devices for remote access “as work-specific time.”
NELP's Conti countered that “it is very wise for” the DOL “to collect information and opinions” on electronic devices, which employers and employees would both be interested in. She added that the Chamber “is very good at fomenting false hysteria about these kind of things so they can try to spur congressional action.”
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