Punching In: Acosta on Future of Work

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By Chris Opfer, Jaclyn Diaz and Robert Iafolla

Monday morning musings for workplace watchers

Stopping the ‘Free Rider’ Training Train | Regulatory Bonanza| About that Big Joint Employer Decision

Chris Opfer: The recent news that Amazon is going cashierless in its new retail stores went over like a lead balloon in organized labor circles, where advocates blamed Jeff Bezos & Co. for using machines to eliminate human jobs. Whether it’s robot registers, driverless cars, or contraptions that can pour me a frothy glass of suds, automation isn’t going away. Instead of trying to put the genie back in the bottle, I want to know how workers can develop the skills they need for jobs that may have a future. I’m also curious who’s picking up the tab.

That’s what I asked Labor Secretary Alex Acosta last week after he talked about the future of work at the Concordia annual summit. He said government has an important role in developing and funding job training programs, but that the feds should also be looking at incentives for businesses that upskill and retrain their own employees.

“One big idea that we need to rethink is how do we recognize businesses investment in people?” Acosta told me. “When you invest in a person, you’re building up an asset and you’re helping to educate that person. Is there a way to reflect that on the balance sheet? Is there a way to recognize that a better workforce makes a better company on the balance sheet, so that businesses that reflect in their workforce are not penalized for doing so?”

The labor secretary has been pushing these questions in public speaking engagements around the country, but the answers are probably outside the DOL’s purview. The balance sheet approach also seems to shift the training responsibility from companies who choose machines over workers to businesses who are actually hiring real, live humans. That’s not to mention what Acosta calls the “free rider” problem.

“If you’ve got three or four major players in an industry and one of the businesses is great at investing in its workforce, what’s to prevent the other businesses from then hiring that out? That’s one of the reasons we need to look at industry-level education,” Acosta said. “What does an industry do so that you can educate across the industry in a way that one business doesn’t bear the cost?”

Bloomberg Law’s Hassan Kanu has more on this week’s news in the Punching In podcast. Terminal readers can find it here: {NSN PFW0RM6TTDS0 }

Jaclyn Diaz: Office of Regulatory Affairs Administrator Neomi Rao said recently that the upcoming fiscal year will be a big one for regulatory action across all agencies.

“Some of the major deregulatory actions have just taken this much time to finalize,” Rao said during a Q&A with Bloomberg Government. “I think the pace of reform is continuing to accelerate. I think that’s what we can expect” in fiscal year 2019.

If last week at the Labor Department was any indication, we will be having a busy 2019 on our hands. The DOL released five proposed and final rules. For those of you who don’t wake up to read the Federal Register each morning, here’s what might have been missed:

Monday:

  • A proposed rule for health reimbursement accounts was sent out for OIRA review, as Madison Alder reported.
  • The proposed regulation to ease restrictions for teenage workers in health-care settings using patient lifts made it through its own review.

Tuesday:

  • A final rule that excludes some seasonal workers from a 2014 minimum wage hike was released.
  • An inconsequential final rule was posted that would get rid of nondiscrimination requirements for a discontinued job training program.

Wednesday:

  • A proposal to ease patient lift restrictions for 16 –and 17-year-old workers was unveiled. Notably it didn’t include updated scientific risk assessments from the National Institute for Occupational Safety and Health. NIOSH told me it provided technical assistance to the Wage and Hour Division for its work on the rule.

Could this week be even busier? There are plenty of rules that still have yet to move, including an updated overtime rule (as we well know) and a policy calculating regular rates for overtime purposes. And then there’s joint employment. Bloomberg Law’s Robert Iafolla has more on that issue.

Robert Iafolla: Seven years before Acosta took over the Labor Department, he urged the NLRB to use administrative rulemaking more frequently to interpret federal labor law. He argued that the board’s traditional process of case-by-case rulings end up being controlled by politics, when the composition of the board changes with each new administration. The then-dean of Florida International University College of Law (and former NLRB member) said flip-flops undermine public confidence and make it difficult for anybody to rely on board law.

Maybe NLRB Chairman John Ring (R) was taking Acosta’s advice when he started up the agency’s current rulemaking to undo the Browning-Ferris test for joint employment. Of course, Ring announced that rulemaking after the GOP-controlled board’s flip-flop on joint employment—the Hy-Brand decision overruling the Obama-era Browning-Ferris decisionhad to be withdrawn.

It was no surprise that the U.S. Chamber of Commerce and other business groups applauded the proposed joint employer rule, which would essentially narrow the legal test to what it was before Browning-Ferris. Those critics have condemned Browning-Ferris from day one. But has the board’s decision in that case been the monumental decision that the business community feared? We dove into the dockets to find out how often Browning-Ferris has been used to decide whether a company was jointly responsible under labor law for another company’s workers. Look for that story tomorrow.

CO: In the meantime, management lawyers are taking different approached to joint employment as they await a new rule from the NLRB. Some tell me they’re confident NLRB General Counsel Peter Robb won’t authorize any new cases based on the expanded Browning-Ferris test for determining when one business is a joint employer of another’s workers. Those lawyers are advising their clients that they can craft franchise, staffing, and other contractual arrangements in a way that gives the companies more control over franchisees and staffing firms than they would be comfortable under Browning-Ferris.

David Pryzbylski, a lawyer with Barnes & Thornburg, recently told me he’s taking a more “conservative” approach, especially for contracts that span more than one year. That’s because recent history shows the board’s view of joint employer liability can change pretty quickly.

“I’m still trying to meet the Browning-Ferris standard because it will fluctuate,” Pryzbylski said. “We could see the pendulum swing back.”

JD: Before we punch out, there’s been a small personnel change at the DOL. Deputy Chief of Staff Molly Conway has been plucked to also serve as the acting assistant secretary for the Employment and Training Administration. Rosemary Lahasky has had her hands full at the White House helping assistant to the president and First Daughter Ivanka Trump with the National Council for the American Worker. The council is meant to beef up vocational training and education for students and workers across the country. Lahasky spends several days a week at the White House, so Conway is stepping in to fulfill day-to-day responsibilities at ETA while also maintaining duties as deputy chief of staff.

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us: copfer@bloomberglaw.com, jdiaz@bloomberglaw.com, and riafolla@bloomberglaw.com or on Twitter: @ChrisOpfer, @JaclynmDiaz, and @robertiafolla.

See you back here next Monday.

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