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DOL Update:

Revision of Overtime Rules

October 11, 2016

Manesh K. Rath, PartnerKeller and Heckman LLP

Washington, DC Office

+1 202.434.4182

[email protected]


What We Will Discuss Today

1. FLSA: New Overtime Rule

Overview of Salary Basis Test

Key Features of New Rule

2. OSHA Recordkeeping Rule

3. OSHA Enforcement Trends


1. DOL Overtime Rule


NonExempt Employee

Overtime pay must be paid at a rate not

less than1.5 * the employee’s regular

rate of pay

…for all hours worked in excess of the 40

hour limit.


Three Tests For Determining White Collar

Exemption

Salary Level

Salary Basis

Job Duties


Salary Level

Old:

Salary Level $455/wk

Highly Compensated = $100,000 plus

customarily does exempt work are exempt


Final Rule

Final rule published: May 18

Based on Presidential Memorandum

directing DOL to act (2014)


Update On Status Of

Salary Level Rule

Tying to 40th percentile of earnings of full-

time salaried workers

minimum salary at $913 per week, or

$47,476 per year

Data from the lowest-wage Census Region,

currently the South


Highly Compensated Employee

current minimum salary level for a highly

compensated employee = $100,000 per

year.

Increased to $134,004 per year.

represents the 90th percentile of full-time

salaried workers

determined by the Bureau of Labor

Statistics (BLS)


Other Key Features

automatically updates the salary and

compensation levels every three years to

maintain the levels at the above those

percentiles.

allows employers to use nondiscretionary

bonuses and incentive payments (including

commissions) to satisfy up to 10 percent of

the new standard salary level. Must be

paid at least quarterly


Effective Dates

Effective date = December 1, 2016.

The initial increases to the standard

salary level (from $455 to $913 per

week) and HCE total annual

compensation requirement (from

$100,000 to $134,004 per year).

Future automatic updates every three

years, beginning on January 1, 2020.


U.S. House Bill To Defer

Bill to delay implementation of new rule for six

months

Vote Sept 28, 2016

246-177, mainly along party lines

U.S. Senate a similar bill was introduced

President stated he will veto bill

Need 2/3 to override a veto

House passed by about 58%

Override is rare (but happened on same day!)


2. OSHA Recordkeeping Rule


Three Notices to Employees:

1. Procedure for reporting

2. Right to report

3. Employer is prohibited from discharging or

discriminating against employee for reporting

Overview – Notices


1. Sites with >250 employees (at any time during year) in covered industries:

• Form 300, 300A, and 301from 2018 on

• Form 300A from 2017 on

• Excluding employee name and address, name of health care professional and name and address of off-site treatment – presumably those fields are eliminated

2. Sites with 20-249 employees (at any time during year) in covered “high hazard” industries:

• Form 300A from 2017 on

3. Deadlines

• July 1, 2017 and 2018

• March 2, 2019 and following years

Annual Electronic Data Submission


OSHA publication of data Preamble: OSHA states its intention to publish data

Purposes:

– Exposure to pressure by stakeholders

– Investors, contractors and consumers

– Employer benchmarking

– Informs employees and job seekers

– Informs purchasers and suppliers of goods or services

1904 is premised on “no-fault” recordkeeping

– Threshold is work-relatedness

– OSHA’s stated purposes conflict with this

Overview – Publication


OSHA Self-Reporting Rule

Report to OSHA any single hospitalization (for care/treatment rather than observation), not just hospitalization of 3 or more employees

• Is there a clear line between the two?

Report all amputations

• Unclear when loss of skin on fingertip is non-reportable avulsion or reportable amputation because bone loss is not required

Corporate HQ no longer covered as an industrial site


3. OSHA Enforcement Trends


Overview of OSHA Enforcement

0

1000

2000

3000

4000

5000

6000

7000

8000

TOP 10 CITATIONS 2015


DOL Memo on Joint Employment

Browning Ferris: NLRB holds that actual

control plus reserved control are

determinative

DOL SOL to OSHA memo

• If corporate entity exercises control or has

control that is unexercised

• Seek: franchise agreement, requirements to

submit or use HR, training, safety records

• Requirement to report safety incidents


Secretary v. Central Transport

Central Transport, 170 shipping terminals

OSHA inspection at Billerica, MA

Citation: Failure to take forklift out of operation with defects (horns, lights, damaged tire, leaking battery)

Ten other citations in PA, CT, MA, WI, GA, OH, NJ, NE, IL

Two more notices of contest pending

OSHA issued an Order directing abatement at all facilities throughout enterprise


OSHA’s Authority to Order Abatement 29 USC § 658(a). Secretary shall issue a

citation:

• If, “upon inspection or investigation,” the

Secretary believes a violation exists

• In writing

• Description of nature of violation

• Reference to chapter, standard, rule, regulation

or order alleged to have been violated

• Reasonable time to abate

• May prescribe procedures for notice in lieu of

citation for de minimis violations


Central Transport (continued)

Central Transport argued that enterprise-wide abatement:

• Chills right to Notice of Contest in each case

• Allows OSHA to inspect any facility without a warrant (Barlow’s case)

• Should be stayed for the two pending cases

ALJ’s Decision:

• Commission has jurisdiction to hear novel question for enterprise-wide abatement

• Review Commission has broad authority to issue “other appropriate relief” under the Act


Factors in Enterprise-Wide Abatement Facts to be established in a hearing

• Orders in prior cases, at other sites

• Repeat or failure to abate citations

• Identical or highly similar facts under same

standard

• Uniformity to, or central governance of,

practices, procedures, equipment

Was Central’s motion premature?


NLRB Memo of Understanding

Whistleblower complaints before OSHA

• Many are barred by 30 day limit (others 180)

• OSHA dismisses 300 to 600 cases per year for timeliness

• NLRB believes that many of these cases are also NLRA violations, e.g. group complaints

• MOU, OSHA will notify all untimely complainants of their right to file a ULP

• Train OSHA intake agents

• Tracking number of contacts referred by OSHA


DOJ/DOL Criminal Prosecutions

Criminal sanctions only exist under OSH

Act for:

• Willful violation, causing death

• Advanced notice of an inspection

• Falsification of documents filed or required to

be maintained

Misdemeanor

• $10,000

• Imprisonment up to 6 months



DOJ:

• Penalties never increased

• That is why only a handful of

reported criminal prosecutions under

OSH Act each year

• E.g. only 3 in 2013



Pair up with other serious offenses

• False statements

• Obstruction of justice

• Witness tampering

• Conspiracy

• Environmental crimes

• Endangerment crimes

Penalties:

• 5-20 years prison

• Significant fines

• Other additional deterrent tools



Environmental Crimes Section (ECS) of the Environment and Natural Resources Division (ENRD)

MOU with DOL to pair up in enforcement

More aggressive enforcement

US Attorney’s Offices responsibility for criminal worker safety prosecutions

Criminal referrals

Data sharing

Training


Catch our group on LinkedIn:

Keller and Heckman Workplace

Safety and Health

• The OSHA 30/30 with Manesh Rath now available as a Podcast! Find it at:

• Khlaw.com/osha3030 Or on any podcast streaming service (iTunes, Podcast Addict)

To Stay Updated:

Please join us at 1:00 PM (EST)

On March 30, April 27, May 5 -www.khlaw.com/osha3030


Washington, DC • Brussels • San Francisco • Shanghai • Paris

Keller and Heckman LLP

THANK YOUManesh K. Rath, Partner

Keller and Heckman LLPWashington, DC Office

+1 202.434.4182

[email protected]

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