On September 14, the DOL, IRS, and Pension Benefit Guaranty Corporation issued a “Notice of proposed forms revision” and DOL issued a proposed rule relating to benefit plan reporting. The proposed rule largely focuses on changes to the Form 5500 to reflect statutory changes made by the SECURE Act.
Here is the link to the proposed forms revision.
And here is the link to the notice of proposed rulemaking.
Many of these changes will be significant for PEO-sponsored retirement plans. In particular, the Proposed Rule that may impact PEO-sponsored health and welfare plans. If you are a PEO-sponsored plan and file a Form M-1, under the Proposed Rule, the PEO would have to begin publicly disclosing its clients that participate in the plan in that filing (since the Form M-1 is accessible through DOL’s website).
Congressional Committee Authorizes Large OSHA Fines
A Congressional committee has approved maximum penalties of $700,000 per item for violations of OSHA standards, reflect more than a five-time increase of maximum “willful,” “repeated,” and “failure-to-abate” violations from $136,532. Minimum penalty amounts for such infractions would increase from today’s $9,753 to $50,000. “Serious” violations would increase from a current maximum of $13,653 to $70,000.
DOL Set Joint Employer Recission Date
USDOL announced an extension of the effective date of October 5, 2021 for the rescission of the “Joint Employer Status Under the Fair Labor Standards Act” final rule, the Joint Employer Rule.
In March 2020, the Trump administration established a rule for determining when an employee would be considered jointly employed by two or more distinct employers. The rule went into effect on March 16, 2020, and set forth a four-factor balancing test for determining when a business would be considered the “employer” of a worker who simultaneously performed work for another business. Also, contrary to guidance issued under the Obama administration, the Trump DOL’s rule deemed an employer’s reserved right or ability to exercise control, without more, insufficient to find a joint employment relationship.
The rescinded rule was found to include a description of joint employment contrary to statutory language and Congressional intent. The rule also failed to take into account the department’s prior joint employment guidance. The U.S. District Court for the Southern District of New York vacated most of the rule in 2020.
Under the FLSA, an employee can have more than one employer for the work they perform. Joint employment applies when – for the purposes of minimum wage and overtime requirements – the department considers two separate companies to be a worker’s employer for the same work. For example, a joint employer relationship could occur where a hotel contracts with a staffing agency to provide cleaning staff, which the hotel directly controls. If the agency and the hotel are joint employers, they are both responsible for worker protections.
In Case You Missed The FB Biden Vax Webinar
Here is a link to the YouTube video: https://youtu.be/ohiJ8J4SSAE
Remote Work As Accommodation
Last week, the EEOC filed a lawsuit in a Georgia federal district court against an employer that did not allow an employee with a medical condition to work remotely.
The employee at issue (“Moncrief”) worked as a Health Safety & Environmental Quality Manager at a pharmaceutical manufacturing facility. She has a number of physical impairments, including chronic obstructive lung disease and hypertension, that limit her ability to breathe, walk, and work, among other things. In March of 2020, Moncrief’s doctor recommended that she work from home. And around the same time, the employer had Moncrief and many other employees work from home for COVID-19 related reasons.
The EEOC alleges that working from home improved Moncrief’s condition. However, in June 2020, the employer required Moncrief and all other employees to resume working at the facility five days per week. The EEOC alleges that Moncrief then asked to work from home two days per week, but that request was denied and Moncrief was terminated shortly thereafter.
Because so many companies were able to successfully transition employees to remote work arrangements during the pandemic, it will be harder than ever before to deny employee requests for medical accommodations in the form of work-from-home arrangements.
Status of 80/20 Tipped Rule
The Eleventh Circuit Court of Appeals delivered a ruling rejecting the 2018 Opinion Letter issued by the Trump administration’s Department of Labor (DOL), which had rescinded the use of the so-called 80/20 Rule and indicated that there was no time constraint on the amount of time tipped workers could spend performing such duties so long as they were performed contemporaneously with the workers’ tip-producing duties.
In the Eleventh Circuit’s recent decision, Rafferty v. Denny’s, Inc., the majority held that the dual-jobs regulation’s use of the word “occasionally” inherently imposed a time constraint on the amount of time that tipped employees can perform such non-tipped related duties and that the Trump administration’s Opinion Letter was an improper attempt to eliminate this limitation. In making this ruling, the court held that the Opinion Letter was not entitled to deference from the courts. In the majority’s view, while the dual-jobs regulation is ambiguous as to the amount of time a tipped employee can spend doing untipped but related duties, the Opinion Letter was not a “reasonable” interpretation of the regulation. The court held that the Opinion Letter “essentially rewrites the dual-jobs regulation to impose obstacles to achieving its original purpose.” Because the majority determined that it was not bound by the 2018 Opinion Letter, it underwent the task of “evaluat[ing] for [them]selves” the meaning of “occasionally” in the dual-jobs regulation and determined, in keeping with the Biden administration’s Notice of Proposed Rulemaking issued in June, that a tipped employee’s non-tipped related duties should be limited to 20 percent of an employee’s workweek. Thus, the court adopted the very 80/20 Rule that the Trump administration’s Opinion Letter was intended to eliminate.
The Eleventh Circuit also took issue with the Opinion Letter’s attempt to clarify what duties constitute related duties under the dual-jobs regulation and shed light on the type of activities it believes count for purposes of calculating the 20 percent. The court stated such duties tend to be “single step, easily executed food and drink preparations or readying serving items, such as silverware, plates and dishes for customers immediate use,” and noted “[t]he dividing line between related and unrelated duties falls where untipped duties no longer directly support tipped duties.” This appears to follow the proposed rule issued by the DOL in June.
So, the opinion sets a very low burden for employees to meet in order to establish a violation of the 80/20 Rule. In particular, the court held that in order to prove a violation, an employee does not need to identify any particular week in which he or she spent more than 20 percent of his or her time in non-tipped duties and does not need to provide any specifics about the time he or she spent performing these non-tipped duties. In the court’s eyes, because it is an employer’s duty under the FLSA to track an employee’s hours, wages and conditions of employment, an employee is only required to provide mere estimates of time spent in related or non-tipped duties.
OHSA and Heat Exposure
To combat the hazards associated with extreme heat exposure—both indoors and outdoors—the U.S. Department of Labor’s Occupational Safety and Health Administration is initiating enhanced measures to protect workers better in hot environments and reduce the dangers of exposure to ambient heat. OSHA is implementing an enforcement initiative on heat-related hazards, developing a National Emphasis Program on heat inspections, and launching a rulemaking process to develop a workplace heat standard. In addition, the agency is forming a National Advisory Committee on Occupational Safety and Health Heat Injury and Illness Prevention Work Group to provide better understanding of challenges and to identify and share best practices to protect workers.
Employers are encouraged to implement intervention methods on heat priority days proactively, including regularly taking breaks for water, rest, and shade; training workers on how to identify common symptoms and what to do when a worker suspects a heat-related illness is occurring; and taking periodic measurements to determine workers’ heat exposure.
Reminder: FL Min Wage Increase
The Florida minimum wage employers increases from $8.65 to $10 on September 30th. As part of Constitutional Amendment No. 2 that voters approved in the 2020 general election, the minimum wage then will increase by $1 each year through Sept. 30, 2026. This signals a 13.5% increase over the current minimum wage, compared with a 1% increase that was implemented at the beginning of this calendar year.
Written by: Gordon M. Berger, Partner