Pres. Obama’s Secretary of Labor, Assistant Secretary of Labor for OSHA, and the rest of his political Leadership Team at the Department of Labor turned over the keys to the Trump Administration. The Trump Administration has now installed, or at least announced, its own OSHA and OSHRC Leadership Team, and the backgrounds and regulatory philosophies between the outgoing and new decision makers and policymakers could not be more different.
During this webinar, participants learned about the new appointees who have taken (or should soon take) the reins at OSHA, and how this new Leadership Team will affect OSHA enforcement and rulemaking. We also reviewed other personnel changes at OSHA and OSHRC that will impact the regulatory landscape for employers.
Employers’ perceptions about their legal responsibilities for certain workers is not always reality. Although an employer may classify workers as temporary workers or independent contractors, that does not mean the Department of Labor takes the same view. At the tail end of the Obama Administration, DOL was vocal about its belief that most workers should be treated as employees, insinuating that in most cases, employers will be accountable for the specific obligations of an employer-employee relationship. The Trump Administration is moving in the other direction, but a lot of questions remain unanswered or muddled. DOL has also been cracking down on employee misclassification and division of responsibility among multiple employers. Additionally, employers continue to have certain safety and health related obligations and potential OSHA liability depending on their role at multi-employer worksites or in joint employer situations.
It is essential for employers to carefully evaluate the employment relationship and their own individual function in the multi-employer context.
As the private sector continues to see a decline in labor union membership among employees, labor unions are struggling to remain relevant and recruit new, dues-paying members. Traditionally, when a labor union begins an organizing campaign at a workplace, the federal agency at the center of the process is the National Labor Relations Board (“NLRB”). The NLRB’s purpose is to protect the rights of workers to organize and to freely choose whether or not to be represented by a labor union. Indeed, the NLRB is an intrinsic part of the election process, and the NLRB may also become involved in a union organizing campaign if, for instance, the union asserts that the employer has committed an unfair labor practice.
However, unions are more and more often engaging with or depending on the regulations of other federal agencies as a tactic to gain leverage during organizing campaigns. There are numerous ways a union may influence the outcome of an organizing campaign by using federal agencies, such as the Occupational Safety and Health Administration (“OSHA”) or the Wage and Hour Division (“WHD”) of the Department of Labor (“DOL”), to persuade employees to embrace the union, or to put pressure on employers to concede to union representation.
Taking OSHA as an example, an on-site workplace safety inspection, or even just the threat of an inspection, can impact an organizing campaign in a manner favorable for the union. The threat of making an OSHA complaint or inviting OSHA into the workplace to conduct an inspection can put pressure on an employer to stand-down against a union’s organizing efforts, even if it does not believe a particular violative condition or safety hazard exists. A safety complaint could spark an OSHA inspection and, with 75% of all OSHA inspections resulting in the issuance of at least one citation, the chances are high that the employer would have an OSHA enforcement action on its hands. Continue reading →
On Thursday, April 27, 2017, Alexander Acosta was confirmed by the United States Senate to serve as the first Secretary of Labor in the Trump Administration. As we reported in an earlier article when Acosta was first nominated by Pres. Trump, in this role, Sec. Acosta will oversee the federal department that develops and interprets labor regulations and investigates alleged violations of minimum wage, overtime, and workplace safety laws and regulations.
The Senate approved Acosta by a vote of 60-38, meaning there was some cross-party support, despite the party-line vote on Acosta’s nomination by the Senate Health, Education, Labor and Pensions Committee. This marks the fourth time Acosta has been confirmed by the Senate, including his prior positions in the Bush Administration.
Specifically, during the Bush Administration, Acosta served as a member of the National Labor Relations Board for approximately eight months. In 2003, President Bush appointed him to Head the Civil Rights Division at the U.S. Department of Justice’s , a position which he held for about two years, before being appointed to serve as the United States Attorney for the Southern District of Florida. Most recently, Acosta was the Dean of Florida International University’s School of Law.
At this point, it is still uncertain what jurisprudence Acosta will bring to the role of Secretary of Labor. The Trump Administration and its initial Secretary of Labor nominee, Andrew Puzder, who withdrew from consideration back in February, have taken aggressive stands on deregulation. However, Acosta’s positions on regulation and enforcement have not been as clearly expressed, and his prior experience as a prosecutor may suggest a more measured approach in managing the enforcement responsibilities of the various agencies under his direction. We will have a better idea of Acosta’s approach soon, however, because there are a number of time sensitive issues that will need his prompt attention upon being sworn in.
In particular, we expect that one immediate priority for Acosta will be Continue reading →
The Trump Administration submitted a blueprint budget for 2018 to Congress proposing $2.5 Billion in cuts to the U.S. Department of Labor’s (“DOL”) operating budget. The President’s proposed budget expressly calls for reduced funding for grant programs, job training programs for seniors and disadvantaged youth, and support for international labor efforts. It also proposes to entirely defund and eliminate the U.S. Chemical Safety and Hazard Investigation Board (“CSB”) – an independent, federal, non-enforcement agency that investigates chemical accidents at fixed facilities. The budget plan also purports to shift more funding responsibility to the states with labor related programs. Finally, although less explicit, the budget blueprint appears to deliver on promises from Trump’s campaign trail that rulemaking and regulatory enforcement efforts under the myriad laws and regulations enforced by the sub-agencies, such as the Wage and Hour Division and OSHA would be slashed.
These proposed budget cuts at DOL and other agencies are all part of a plan to offset the White House’s intent to increase defense and security spending by $54 billion. Overall, Trump requested $1.065 Trillion in total discretionary spending, with $603 billion going to Defense.
The proposal would shrink DOL’s budget to $9.6 Billion – down 21% from the $12.2 Billion budget for 2017. Trump’s planned reductions announced on March 16, 2017 – while not really surprising in the context of his view toward federal spending on non-defense agencies – would have a seismic impact on DOL’s ability to carry out both policy initiatives under former President Obama as well as many of the Department’s longstanding programs.
The business community welcomes Trump’s effort to rein in what has been viewed as an intrusive, enforcement-heavy Labor Department, but we caution not to count chickens yet. These proposed cuts will undergo heavy scrutiny by Congress before any budget is finalized. The President’s spending plan is only the first step in months of negotiations between the White House and both houses (and parties) in Congress. Pres. Trump will put forward a more detailed spending proposal in May, and various legislative committees will scrutinize his requests, calling on Cabinet Secretaries, Agency Heads, and others in the Administration to testify about or otherwise explain their spending needs and requests.
Key Takeaways from Trump’s Budget Blueprint
While the administration provided estimates for some of the proposed cuts, it did not specify where the majority of the budget cuts would come from. What we do know is that the proposed budget would Continue reading →
President Trump originally chose Andrew Puzder, the CEO of CKE Holdings, the parent company of Carl’s Jr. and Hardee’s, as his nominee for Secretary of Labor. However, on February 15, 2017, one day prior to his much-delayed confirmation hearing, Mr. Puzder withdrew his name from consideration amidst reports that he would not receive the required Senate votes necessary for confirmation. Mr. Puzder’s nomination was knocked off track by allegations that he failed to pay workers overtime pay, hired an undocumented worker in his home, condoned sexual harassment, and opposed legislative efforts to address those problems. The next day, President Trump officially tapped former U.S. Attorney Alex Acosta for the position.
If confirmed as Labor Secretary, Mr. Acosta will oversee the federal apparatus that investigates violations of minimum wage, overtime and workplace safety laws and regulations. Mr. Acosta would also be the first Hispanic member of President Trump’s cabinet.
Mr. Acosta has a strong public service background. After graduating from Harvard Law School, he clerked for Judge (now Supreme Court Justice) Samuel Alito on the Third Circuit Court of Appeals. He has also served as a member of the National Labor Relations Board, head of the U.S. Department of Justice’s Civil Rights Division (both of which he was appointed to by President George W. Bush), and U.S. Attorney for the Southern District of Florida. Most recently, Mr. Acosta served as
Texas District Court Enjoins the Administration from Enforcing the Federal Government Contractor “Blacklisting” Provisions of the Federal Acquisition Regulatory Council’s New Final “Fair Pay and Safe Workplaces” Rule.
On August 25, 2016, the Obama Administration, through the Federal Acquisition Regulatory (FAR) Council and in conjunction with the U.S. Department of Labor, promulgated the final Fair Pay and Safe Workplaces regulation and parallel guidance from the Labor Department, which collectively federal contractors have unaffectionately dubbed the “Blacklisting Rule.” The cornerstone provisions of the final rule establish expansive new reporting obligations for contractors bidding on executive branch contracts with an estimated value exceeding $500,000. These contractors, along with subcontractors whose portions of the overall contract meet the $500,000 threshold contract value, must disclose all confirmed and alleged violations issued under 14 labor laws, including alleged OSHA citations, within the three years prior to a prospective contractor’s bid submission, regardless of the status of the citation or whether the citation has yet been upheld in a judicial or administrative review process afforded employers. To be clear, under the final rule, all OSHA citations must be reported, even minor paperwork citations characterized as “OTS” (“other-than-serious”).
The final rule change the manner in which the rule applies to subcontractors. Unlike the proposed rule, the final rule requires covered subcontractors to disclose violations directly to the Department of Labor, which will conduct a “responsibility determination” and return it to the subcontractor, who in turn will then be required to deliver it to the prime contractor. The final rule also pushed back the mandatory disclosure date for subcontractors to October 25, 2017, a year after the disclosure requirements were set to begin for prime contractors.
The disclosure requirements for all contractors apply equally to related state labor laws, which sweeps in all citations issued under the 27 federal OSHA-approved state OSH programs administered by state occupational safety and health agencies such as CAL/OSHA. Whichever contractor is awarded a covered contract must also disclose any old and new OSHA or other alleged labor law violation (referred to in the regulation as “administrative merits determinations”) during regular, bi-annual reports throughout the life of the contract.
Rule Challenged and Preliminary Injunction Granted
Employers must beware as the U.S. Department of Labor (“DOL”) cracks down on what it perceives as rampant misclassifying employees as contractors and shirking other responsibilities, such as safety training, because a worker is supplied by another employer. With more and more unique employment relationships and multi-employer worksites, it is crucial to understand the complexities of how the DOL and its various enforcement agencies define the employment relationship and/or assign liability in these contexts.
It has long been a priority of the Obama Administration to treat more workers as actual employees of host employers in order to provide them with a litany of labor protections and benefits, even when these workers are not hired directly, may not stay long, and may not even consider themselves to be employees. This enforcement philosophy affects businesses in numerous areas – such as wage and hour law and OSHA compliance – even when employers thought staffing through an agency or on an independent contract basis relieved them of many of these DOL burdens and liabilities. Not only does this increase the cost of many temporary, contract and multi-employer arrangements, it also puts employers at great risk of costly DOL enforcement actions if they do not understand when they have the responsibility (as opposed to another employer) to satisfy certain terms of labor law compliance.
First and foremost to keep in mind, although an employer may classify a worker as an independent contractor or as a non-employee temporary worker, and their maybe contract documents that express that classification, that does not mean DOL takes the same view. Indeed, as DOL sees it, most workers should be treated as employees. Also, employers may have certain employment law and OSHA-related obligations and potential liability even for non-employees depending on the employers’ roles at multi-employer worksites or in joint-employer situations.
New ‘Joint Employer’ Standard
Outsourcing to a temporary or contract worker can be a great way for a company to take care of some tasks and may make more sense for the business, rather than hiring full-time workers to fill those gaps. However, if the DOL finds under one of various legal tests that the business is a joint-employer of that worker with another company, then numerous legal obligations kick in vis-a-vis these shared employees (such as collective bargaining and mandatory dispute resolution) as well as significant exposure for your organization under various labor laws.
In the past few years, both state and federal agencies have been expanding the joint-employer definition. Continue reading →
Employers’ perceptions about their legal responsibilities for certain workers is not always reality. Although an employer may classify a worker as a temporary worker or independent contractor, that does not mean the Department of Labor takes the same view. Recently, DOL has been vocal about its belief that most workers should be treated as employees, insinuating that in a majority of cases, it would hold employers accountable for the specific obligations of an employer-employee relationship. Additionally, employers may have certain employment law and OSHA related obligations and potential liability depending on their role at multi-employer worksites or in joint employer situations.
Overall, DOL has been cracking down on employee misclassification and division of responsibility among multiple employers; thus, it is essential for employers to carefully evaluate the employment relationship and their own individual function at in the multi-employer context.
The Legal Backgrounder reviewed the history of OSH Act criminal cases and a new Department of Justice and Department of Labor joint initiative designed to increase the frequency of both criminal prosecutions for workplace safety violations generally, and to pursue more criminal charges against individual managers rather than just corporate defendants. The article explains:
“A key change in DOJ’s strategy for ‘upping the ante’ in workplace-safety criminal enforcement is the decision to transfer responsibility for prosecuting worker-safety violations from the Justice Department Criminal Division’s Fraud Section to the Environmental Crimes Section (ECS) of the Environment and Natural Resources Division.”
The article concluded that:
“the new Department of Justice worker-endangerment initiative will result in a renewed and more concerted effort to pursue criminal charges under environmental statutes where workers’ health and safety is allegedly being threatened. Based on this rekindled commitment by DOL and DOJ, employers should expect government officials investigating workplace-safety violations to probe for possible criminal violations—not only under the OSH Act where there has been a fatality, but under the myriad of environmental statutes and Title 18’s federal criminal code.”
Following President Obama’s 2014 “Fair Pay and Safe Workplaces” Executive Order (EO 13673) — commonly referred to as the “Blacklisting” Executive Order by government contractors — this Spring, the Federal Acquisition Regulatory (FAR) Council in conjunction with the Department of Labor (DOL) issued proposed regulations and guidance implementing EO 13673. The companion proposals establish expansive new reporting obligations requiring disclosure of any OSHA citation issued — still just allegations — within the three years prior to bid submission, as well disclosures of all other “administrative merits determinations” issued under 13 other labor laws. The proposals then require regular bi-annual reporting of the same data throughout the life of the contract.
Although the proposals are purportedly designed to identify and prevent “irresponsible” companies from obtaining federal contracts, because they cast such a broad net, based on mere allegations of violations, the rule’s likely effect will be to significantly intensify the scrutiny to which contractors will likely be subjected (and the costs they will need to bear to comply with the rule) without accomplishing the President’s objectives of ferreting out irresponsible contractors.
Specifically, the proposed regulations would require contractors bidding on executive branch contracts with an estimated value exceeding $500,000 to disclose any OSHA citation, regardless of the status of the citation or whether the citation has yet been upheld in the administrative review process afforded employers. All OSHA citations must be reported under the proposals, even citations characterized as “OTS,” or “other-than-serious,” the characterization OSHA applies to minor paperwork violations. The disclosure requirements apply equally to citations issued under the 27 state plan programs administered by state occupational safety and health agencies such as CAL/OSHA.
In addition to the disclosures contractors must make, prime contractors also must collect the same information from every subcontractor who has a contract or bid exceeding the $500,000 threshold (with the exception of subcontractors whose contract is for commercial-off-the-shelf (COTS) goods or services).
The DOL guidance indicates that contracting agencies’ “responsibility” determinations will consider most heavily only those OSHA citations (or other labor law violations) determined to be “serious, willful, repeated, or pervasive.” While this limitation may sound good, applied in the OSHA context, it provides cold comfort to responsible contractors. A review of 2009 – 2013 OSHA enforcement data shows that the vast majority of citations issued — upwards of 85 percent — are initially characterized as serious, repeat, or willful. This means that Continue reading →