Federal Employment Law Update — March 2019

Federal Employment Law Update

Department of Labor Issues Notice of Proposed Rulemaking to Update Overtime Regulations

On March 7, 2019, the U.S. Department of Labor (DOL) announced a Notice of Proposed Rulemaking (NPRM, RIN 1235-AA20) to update the current overtime regulations. Presently, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week. Workers making at least this salary level may be eligible for overtime based on their job duties. The NPRM proposes to increase this salary threshold, using current wage data and projected to January 1, 2020, from $455 to $679 per week (equivalent to $35,308 annually).

The NPRM also maintains overtime protections for police officers, fire fighters, paramedics, nurses, and the following laborers:

  • Non-management production-line employees and non-management employees in maintenance.
  • Carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers.

However, the NPRM does not propose automatic adjustments to the salary threshold.

The DOL encourages any interested members of the public to submit comments about the proposed rule electronically. Once the rule is published in the Federal Register, the public will be able to submit comments for 60 days.

Read about the proposed rule

EEO-1 Survey Stay Lifted and Pay Data Collection Re-Established

On March 4, 2019, the U.S. District Court for the District of Columbia issued a ruling in National Women’s Law Center v. Office of Management and Budget (Civil Action No. 17-cv-2458) vacating:

  • The Office of Management and Budget’s stay of the Equal Employment Opportunity Commission’s revised EEO-1 form; and
  • “Stay the Effectiveness of the EEO-1 Pay Data Collection,” from the September 15, 2017 Federal Register Notice.

This decision instantly reinstates the EEO-1 pay data collection requirements. In addition to race or ethnicity, gender, and job category information, employers must also collect pay data for the 2018 survey period. The current deadline to submit EEO-1 data is May 31, 2019.

Read the case and 82 Fed. Reg. 43362.

OSHA Electronic Recordkeeping Reminder

The deadline for electronically reporting OSHA Form 300A data for calendar year 2018 is March 2, 2019 and collection began on January 2, 2019.

OSHA published a Final Rule to amend its recordkeeping regulation to remove the requirement to electronically submit to OSHA information from the OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 301 (Injury and Illness Incident Report) for establishments with 250 or more employees that are required to routinely keep injury and illness records. Covered establishments are only required to electronically submit information from the OSHA Form 300A (Summary of Work-Related Injuries and Illnesses). The requirement to keep and maintain OSHA Forms 300, 300A, and 301 for five years is not changed by this Final Rule.

Of note, not all establishments are covered by this requirement. Only a small fraction of establishments are required to electronically submit their Form 300A data to OSHA. Establishments that meet any of the following criteria DO NOT have to provide their data:

  • The establishment’s peak employment during the previous calendar year was 19 or fewer, regardless of the establishment’s industry.
  • The establishment’s industry is on this list, regardless of the size of the establishment.
  • The establishment had a peak employment between 20 and 249 employees during the previous calendar year AND the establishment’s industry is not on this list.

Note: These criteria apply at the establishment level, not to the firm as a whole.

See more on the OSHA Injury Tracking Application website

NLRB Sets Standards Affecting Beck Objectors

On March 1, 2019, the National Labor Relations Board (NLRB) released its decision in United Nurses & Allied Professionals (Kent Hospital) where it ruled that nonmember objectors cannot be compelled to pay for union lobbying. The board majority held that lobbying activity, although sometimes relating to terms of employment or incidentally affecting collective bargaining, is not part of the union’s representational function, and therefore lobbying expenses are not chargeable to Beck objectors. The ruling relies on relevant judicial precedent holding that a union violates its duty of fair representation if it charges agency fees that include expenses other than those necessary to perform its statutory representative functions.

The majority also held that it is not enough for a union to provide objecting nonmembers with assurances that its compilation of chargeable and nonchargeable expenses has been appropriately audited. Citing the “basic considerations of fairness” standard adopted by the Supreme Court, the NLRB held that a union must provide independent verification that the audit had been performed. Failure to do so violates the union’s duty of fair representation.

The United Nurses case is the board’s decision affecting certain rights of nonmember objectors under the Supreme Court’s decision in Communications Workers of America v. Beck, 487 U.S. 735 (1988). In that decision, the Supreme Court held that private-sector nonmember employees subject to union security who object to the expenditure of their agency fees for activities other than collective bargaining, contract administration, or grievance adjustment can only be compelled to pay that portion of the agency fee necessary to the union’s performance of “the duties of an exclusive representative of employees in dealing with the employer on labor-management issues.”

See the case

Interest Rates for Second Quarter 2019

On February 25, 2019, the Internal Revenue Service (IRS) announced that interest rates will remain the same for the calendar quarter beginning April 1, 2019. The rates are:

  • 6 percent for overpayments (5 percent in the case of a corporation);
  • 5 percent for the portion of a corporate overpayment exceeding $10,000;
  • 6 percent for underpayments; and
  • 8 percent for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate are the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus 0.5 percent.

The interest rates announced today are computed from the federal short-term rate determined during January 2019 to take effect February 1, 2019, based on daily compounding.

Revenue Ruling 2019-05 announcing the interest rates will appear in the Internal Revenue Bulletin 2019-11, dated March 11, 2019.

Read the press release

Tipped Employees Guidance

On February 15, 2019, the U.S. Department of Labor issued Field Assistance Bulletin No. 2019-2 concerning tipped employees. The guidance also provides further information about the department’s November 2018 opinion letter eliminating the 80/20 rule.

See the guidance

FLSA Reference Guide

In February 2019, the U.S. Department of Labor’s Wage and Hour Division (WHD) launched an enhanced electronic version of the Handy Reference Guide to the Fair Labor Standards Act. This online tool provides basic Fair Labor Standards Act information and links to other resources, and modernizes compliance assistance materials for employers and workers.

See the guide