OFCCP recently lost Trump-appointed Director Ondray Harris due to his resignation. Deputy Director Craig Leen takes Harris’s place in the interim. Harris’s departure raises some important questions that covered federal contractors may be asking.
What was Harris able to accomplish during his short tenure? During Harris’s time at the Agency, there were few policy developments. The Agency extended the moratorium on audits for many health care providers who offer medical coverage under the military’s TRICARE program. In addition, the Agency made good on its promise to provide contractors with additional transparency by (1) publishing its scheduling methodology; and (2) releasing a guidance document titled “What Contractors Can Expect” that stresses good behavior by the Agency and its staff. READ MORE
The Office of Federal Contractor Compliance Programs (“OFCCP”) may soon rescind Directive 307, OFCCP’s current official statement as to how it conducts federal contractor compensation system reviews, according to a story published by Bloomberg Law on April 19, 2018. This announcement comes on the heels of Directive 2018-01, issued by the OFCCP on February 27, 2018, which mandates the use of Predetermination Notices (“PDN”) prior to issuing a Notice of Violation (“NOV”), and further requires national office oversight and approval before a PDN is issued. OFCCP notes that Directive 2018-01 is consistent with the agency’s focus to increase transparency about preliminary findings with contractors, and encourage communication throughout the compliance evaluation process. Combined, these two developments illustrate that change is afoot at OFCCP, now that new leadership is in place in Washington. READ MORE
On Monday, the U.S. Supreme Court ruled that service advisers at car dealerships are exempt from the Fair Labor Standards Act (FLSA). In Encino Motorcars v. Navarro, the majority, Chief Justice John Roberts and Justices Clarence Thomas, Anthony Kennedy, Samuel Alito, and Neil Gorsuch voted to overturn the Ninth Circuit’s ruling on this exemption a second time, deciding that service advisors are “salesm[e]n . . . primarily engaged in . . . servicing automobiles,” and thus are exempt from overtime pay. READ MORE
Effective February 27, 2018, the Office of Federal Contract Compliance Programs (OFCCP), which is charged with ensuring federal contractors and subcontractors provide equal employment opportunity, issued Directive 2018-01, announcing that predetermination notices (PDNs) will be sent to federal contractors and subcontractors for all audits and compliance reviews where a finding of unlawful employment discrimination is imminent. READ MORE
As part of its revision of Obama-era policies, the U.S. Department of Labor (“DOL”) recently announced a new test for assessing whether interns qualify as employees under the Federal Labor Standards Act (“FLSA”). The agency’s adoption of a “primary beneficiary” test aligns the DOL with several circuit court decisions and provides greater flexibility in analyzing intern-employer relationships under federal law. READ MORE
The Obama-Era Overtime Rule Stalls
As we previously reported, a federal district judge’s invalidation of the Obama-era overtime rules – which proposed a sharp increase in the salary threshold for exempt employees, expanding overtime pay to millions of workers – did not doom the possibility of changes to the minimum salary requirements. Last week, on October 30, the Department of Labor filed a notice of appeal of the decision. The notice comes after the DOL started the rulemaking process to replace Obama’s Rule with a new rule increasing the current minimum salary level by about 50% (to around $33,000). If this became effective, it would be a significant departure from the Obama-era Rule, which doubled the minimum salary level to $47,476. The DOL is expected to issue the new proposed rule in the coming months. READ MORE
Earlier this month, the United States Department of Labor (“DOL”) announced its intent to rescind the Obama-era regulations regarding persuader activity and reporting requirements pursuant to Section 203(c) of the Labor-Management Reporting and Disclosure Act (“LMRDA”). Under the Obama administration, persuader activity was considered activity by anyone engaged to help management discourage employees from forming or joining a labor union, including lawyers hired to advise management on how to discourage union organizing activity. The official rescission of the Rule was published in the Federal Register on June 12, 2017.
Effective June 7, 2017, the Department of Labor (“DOL”) has withdrawn informal guidance on independent contractors and joint employment. The guidance on independent contractors came from an Administrator’s Interpretation released in 2015 and was the result of the DOL’s renewed focus on worker misclassification. In it, the DOL seized upon a broad definition of “employ” under the Fair Labor Standards Act (“FLSA”)—“to suffer or permit to work”—to conclude that “most workers are employees under the FLSA.” The DOL’s guidance on joint employment was released in 2016 and also came from an Administrator’s Interpretation. The guidance provided a broad interpretation of joint employment in the wake of the NLRB’s Browning-Ferris decision. It also distinguished between “horizontal” joint employment, which occurs when the employee has an employment relationship with two or more sufficiently related employers, and “vertical” joint employment, which occurs when the employee has an employment relationship with one employer (such a staffing agency or subcontractor), but economic realities show that he or she is economically dependent upon another entity. READ MORE
“[A] single discriminatory act does not, by itself, warrant a broader patter-or-practice investigation.” That was the conclusion the Tenth Circuit reached recently when it affirmed a federal district court’s denial of an EEOC subpoena request. Although the Tenth Circuit disagreed with part of the lower court’s reasoning, it ultimately determined the EEOC’s request was flawed on several grounds. READ MORE
On January 20, 2017, shortly after Donald Trump became the 45th President of the United States, his Chief of Staff, Reince Priebus, issued an Executive Memorandum mandating a 60-day freeze on published federal regulations that have yet to take effect to allow Trump’s appointees time to review the regulations. Although such action is fairly standard during a change of administration, the impact could be significant if certain regulations set to take effect in 2017 are delayed or ultimately replaced. Regulations potentially affected by the 60-day freeze include the Department of Labor’s (“DOL”) overtime and fiduciary rules, and the Equal Employment Opportunity Commission’s (“EEOC”) EEO-1 pay reporting requirements. READ MORE