Punching In: Updates from the Wage, Worker Privacy Police

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Chris Opfer and Ben Penn

Monday morning musings for workplace watchers

Life After Encino Motorcars | The Europeans Are Coming | Checking In With Doug Seaton

Ben Penn: Even without a permanent boss at the Wage and Hour Division, the agency has arguably been juggling more initiatives than any other Labor Department office. And for the greater part of the past year, these various efforts—regulatory and deregulatory moves, guidance, enforcement, and compliance assistance—have all taken place under the unassuming leadership of acting WHD Administrator Bryan Jarrett.

With the Senate in apparently no rush to confirm South Carolina employment official Cheryl Stanton to the post, it’s time to figure out who Jarrett is anyway, and what he’s been up to. That’s why I headed over to the American Payroll Association conference Friday to hear the WHD’s top official for now—a 2011 Stanford Law grad—address the crowd in some of his first public remarks in the role.

Most of the speech was designed to get the payroll professionals up to speed on ongoing WHD activity. But Jarrett, a 2011 Stanford Law grad, also offered a hint of some updated guidance in the pipeline to conform to a recent Supreme Court decision on exemptions to the Fair Labor Standards Act. The justices rejected the legal principle that such exemptions should be construed as narrowly as possible.

“As these litigation developments happen, we’re trying to…update all of our regulatory guidance materials to make them as accurate and updated as possible,” Jarrett said, immediately after he explained the April ruling in Encino Motorcars.

Businesses and management attorneys were already preparing to seize on the opportunity to declare more workers ineligible for overtime and minimum wage, as a result of the justices’ decision that car service advisers aren’t entitled to time-and-a-half pay. Jarrett’s words now suggest that employers may be getting further clarity on this matter from the federal government’s wage enforcement arm.

Jarrett’s remarks Friday struck a balance between the interests of employers and those of workers. A few ongoing priorities he talked about could have been ripped from the pages of old David Weil speeches.

For instance, the WHD is marching forward with memorandums of understanding with states to exchange information when investigating businesses. The division will also be doing targeted, data-driven investigations that don’t rely on workers to bring complaints. And it’s working to reach compliance agreements with large franchisers patterned after a deal reached with Subway in 2016 to train franchisees on FLSA compliance.

Will these remain priorities of eventual WHD chief Stanton? Time will tell. In the meantime, know that extended temporary leadership is nothing new for the division, which was run by acting administrators for the first five plus years of the Obama administration.

Chris Opfer: If you’re like me, you spent the weekend doing everything humanly possible to avoid hearing one more word about the British royal wedding. Here’s some news out of Europe that you can actually use: Enhanced data security requirements for businesses operating in the European Union go into effect on Friday.

The General Data Protection Regulation requires companies to beef up safeguards for employee, customer, and other personal information. It covers a wide range of data and applies to U.S. companies that have workers in Europe or that target EU consumers. I recently checked in with Alisa Chestler, a shareholder at Baker Donelson, about how employers are gearing up. Here are some of the high points:

  • Any footprint will do: Any company that has workers in Europe is required to comply with new limits on how they collect and use those workers’ personal information. That includes independent contractors and workers provided by staffing firms. “You don’t have to have an office in Europe in order to have to comply with this,” Chestler said.
  • Consent matters: Employers generally have to get their workers’ informed consent to collect and use personal information. That means explaining to workers what info the company wants and how the business intends to use it. Workers have the right to opt out and can’t be punished for doing so.
  • Vet the vendors: The consent requirements extend to any information a company passes along to vendors, like payroll service providers. Employers who send worker data to vendors are also potentially on the hook if the vendor doesn’t live up to GDPR responsibilities.
  • Big stakes: The maximum penalty for data protection violations is 4 percent of a company’s global annual revenue, up to $20 million euros (about $24 million).
  • Country enforcement could vary: The GDPR has been on the books for two years, but the EU pledged not to start enforcing it until Friday. That means regulators will likely be ready to hit the ground running, Chestler said. How much of that work will stem from random audits or actual complaints remains to be seen. Because individual countries—with some coordination from the EU—are taking the lead, enforcement priorities may vary. “We’re waiting for some of that enforcement to start and getting clients ready to be able to potentially pivot,” Chestler said.
  • Start with the basics: Employers that might be late to the GDPR compliance party need to start with the foundation,” Chestler said. “Find out what info you have, where it is, and what do you do with it. Ask only for the information that you actually need. Less is definitely more in this situation.”

I can’t tell you whether Prince Philip led the electric slide at the royal reception, but I can say that we will continue to follow the GDPR and impacts it may have for companies based on this side of the Atlantic.

BP: The House Workforce Protections Subcommittee will convene May 23 for a hearing titled, “Regulatory Reform: Unleashing Economic Opportunity for Workers and Employers.” It wouldn’t be another congressional session if we didn’t resurrect the age-old Capitol Hill debate on how to make regulations work best for the workforce.

This time around, that panel title may lend itself to discussion of anything from tip pooling data, or the merits of rolling back more occupational safety rules, to the wisdom of writing an NLRB joint employer regulation.

I’ll throw out another timely topic for the panel to consider—What happened to the DOL proposed rule to implement the president’s apprenticeship executive order? And as a followup, Is the department putting that regulation on the back burner in favor of a guidance document that could get faster results in terms of driving apprenticeship growth?

The most recent unified regulatory agenda estimates a September release for a proposed rule that establishes new guidelines for third parties to certify apprenticeship programs, an effort to boost the number of apprentices by putting industry in the driver’s seat. But the more imminent policy mechanism for scaling-up the earn-as-you-learn apprenticeship model is seen as guidance.

The Trump Labor Department will need to exert caution lest it expose itself to accusations of hypocrisy.

Republicans, including current Labor Secretary Alex Acosta, charged the Obama administration with using guidance to change the interpretation of statutes while sidestepping the regulatory process and avoiding the consideration of public input.

CO: Remember Doug Seaton? The Minnesota labor lawyer was up for an NLRB seat before the White House opted to go with Marvin Kaplan and Bill Emanuel. Seaton first made a name for himself by helping employers avoid unionization. Now he’s spending most of his time representing workers who want to decertify their unions. That includes a group of Minnesota personal care attendants who say they no longer want to be represented by a union.

Seaton recently told me he’s “impressed” with what he has seen so far from the Republican-majority NLRB General Counsel Peter Robb. “When you’re trying to turn the battleship around, it takes some activity on behalf of the leadership,” Seaton told me.

Seaton also said he’d like to see the general counsel and the five-member board take another look at Obama era decisions that make it harder for workers to drop union representation.

“Forced unionization is the kind of labor policy you would see from Mussolini, Stalin, and Hitler,” Seaton said. “The bargaining and decertification process needs to change so there really is a self-determination climate again.”

Roughly six percent of private sector workers are currently represented by unions.

The White House didn’t give Seaton an official explanation for why the Trump administration decided to go with Kaplan and Emanuel for the board spots. Seaton said Democrats are to blame for the “unprecedented” and “politically-motivated” conflicts of interest questions dogging Emanuel these days. But he also said he’s still interested in a board seat if those questions force one to open up.

“It is conceivable that someone will step down,” Seaton said. “I don’t know if they will turn to the other name that was on the list, yours truly.”

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.comand bpenn@bloomberglaw.com or on Twitter: @ChrisOpfer and @BenjaminPenn.

See you back here next Monday.

Bloomberg Law® helps labor and employment law practitioners provide rapid, accurate, and complete advice to clients by bringing together trusted, market-leading Bloomberg BNA content like Daily Labor Report® and treatises like Covenants Not to Compete: A State-by-State Survey and The Developing Labor Law, with a fully integrated, innovative legal research platform. Click here to request a free trial.

Request Labor & Employment on Bloomberg Law