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Punching In: Labor Dept. Wants Crack at Worker Classification Too

Feb. 4, 2019, 11:00 AM

Monday morning musings for workplace watchers

Who’s on First at the ETA? | The Dissent Rests | The Ship Be Sinking?

Chris Opfer: The National Labor Relations Board isn’t the only Trump agency that may use a regulation to redefine the line between employees and independent contractors. The Labor Department is still planning to take a look at the hotly debated worker classification issue, but not until it tackles another significant workplace policy question on its docket.

“As noted in the regulatory agenda, the department plans on proposing to update its joint employer rule,” a DOL spokeswoman recently told me. “It will then look at the classification issue as well.”

That comment came shortly after NLRB Chairman John Ring (R) told me that the board may explore rulemaking to clarify which kinds of workers should be classified as employees, entitled to collective bargaining rights and protected by a ban on unfair labor practices. The Labor Department rule, which Labor Secretary Alex Acosta told me last year the agency would explore, would cover classification for purposes of minimum wage and overtime pay requirements.

The classification question has been at the center of legal debates involving Uber and Lyft drivers of late, but the drama was going on before ride-sharing apps were even a gleam in Travis Kalanick’s eye. Republican control of the Labor Department and NLRB is likely to mean that businesses can treat more of their workers as self-employed entrepreneurs.

The NLRB recently moved in that direction when it ruled that SuperShuttle properly classified Dallas-Fort Worth airport van drivers as contractors, in part because of the “entrepreneurial opportunity” that comes with allowing the drivers to keep the vehicles and make their own schedules. The Labor Department last year shredded an Obama-era administrator’s interpretation that said the vast majority of workers should be considered employees.

“This administration is committed to rolling back burdensome guidance that hurts job creators and job seekers, including the previous administration’s administrator’s interpretation, while ensuring that its statutory responsibilities are faithfully administered,” the department spokeswoman told me.

Hassan Kanu sat down with Georgetown University professor Joseph McCartin to talk about government workers’ role in ending the recent shutdown in this week’s Punching In podcast.

Jaclyn Diaz: The DOL might want to hold off on adding any more rulemaking tasks to its to-do list, like tackling worker classification, given the controversy that unfolded just last week against its existing policies.

Let’s recap Acosta’s week, which took a turn for the worse and indicates a potentially rough road ahead for the department.

  • The DOL’s Office of the Inspector General is launching a probe into the DOL’s regulatory work. The watchdog has its sights set on the controversial patient lift proposal allowing 16- and 17-year-olds who work in nursing homes or hospitals to operate machine lifts without supervision.
  • The Justice Department’s inspector general wants lawmakers to give him the authority to investigate a decade-old plea deal Acosta made, allegedly allowing accused sex offender Jeffrey Epstein to skirt the harshest punishment for alleged crimes against teen girls.

Add this to an ongoing Labor Department OIG audit into the agency’s tip pool rulemaking and litigation from Public Citizen, a left leaning advocacy group, and potentially the U.S. Chamber of Commerce, against the department’s recent rule on workplace injury and illness reporting. I think most of us would have had a headache of epic proportions by Friday afternoon.

Lawsuits aside, how likely is it that Acosta and others within the DOL will have to answer about this controversy any time soon? The OIG tends to take its time with these audits, so any comprehensive resolution is a long time off. The probe into the tip pool rulemaking, for example, launched nearly a year ago and there’s been no indication that the findings are coming soon. On top of that, based on Congress’s spotty record of bipartisanship, the idea of getting a bill passed in the Senate giving the DOJ’s OIG authority to investigate alleged prosecutorial misconduct seems far-fetched to me as well.

Maybe congressional Democrats will get a chance to hold Acosta’s feet to the fire sooner than later. Word on the hill is that a hearing will take place in the coming weeks, but as of today it’s still unclear when the secretary could face questioning.

CO: Chairman Ring told me last week that he’s trying to speed up the board’s process for deciding cases by imposing deadlines on members. He declined to go into detail about timelines for decisions, but he did say he created a spreadsheet to “start tracking who’s meeting deadlines.”

The chairman has also limited the number of times dissenting members get to respond to the majority’s opinion during the decision-drafting process. Dissenters have long been blamed for sitting on cases to slow decisions they don’t like, regardless of which political party is controlling the board. Now they’ll get two bites at the apple: the majority drafts a decision, the dissent crafts a response, the majority responds to that response, and dissenters get one more shot at finalizing their thoughts.

The change will clearly have the biggest impact on Member Lauren McFerran, currently the board’s sole Democrat and often its lone dissenter. The new limit is probably a bit easier to enforce without former member Mark Gaston Pearce (D) over there in headquarters on Half Street. I’m going to go out on a limb and say that McFerran and Pearce aren’t exactly fans of the move, given the debates over slow dissenting opinions that were common when they were part of the board’s Democratic majority in the Obama administraiton. I’m told those discussions often devolved into something akin to the steel cage battle royale matches they used to have at Wrestlemania. It’s just not clear who played the “Hacksaw” Jim Dugan role and who was Jake “the Snake” Roberts.

JD: The Employment and Training Administration, one of the largest sub-agencies within the Labor Department, is struggling in the face of staff and leadership vacancies, sources familiar with the agency’s operation told me.

Trump’s pick to take over ETA, John Pallasch, was nominated to lead it back in April 2018 and was renominated by Trump earlier this month. I’ve been told the empty chairs go beyond the chief’s office. Who’s heading which senior policy office inside ETA is constantly influx, allegedly creating confusion inside and outside ETA.

Vacancies persist throughout DOL, as we’ve reported, as well as other facets of the Trump administration. Staff come and go, sure, but to have this going on at the ETA is surprising given that the administration’s top labor policy priorities fall under ETA’s purview. The lack of key players could be blamed in part on Congress’s reluctance to act on nominations, but there’s also some grumbling that department leadership hasn’t made it a priority to staff up for other ETA positions that don’t require Senate approval.

Establishing the department’s Industry-Recognized Apprenticeship Program has been a pivotal goal for Acosta since he took the helm of the agency in 2017. The agency has also indicated that a similarly big priority will be changing the work visa programs (those for seasonal workers in agriculture and other sectors, and those that cover specialized, high-skilled workers) and cracking down on the employers that use them. The ETA is responsible for monitoring nationwide apprenticeship programs and for issuing those work visa programs.

The absence of a steady hand to guide policy and staff on a daily basis, let alone on these major initiatives, is causing delay and confusion and may be contributing to the recent trouble the agency faced in trying to tackle both issues, those sources said. Tune in for the whole story later this week.

And speaking of vacancies: Troy Finnegan, Acosta’s executive secretary, had his last day in Frances Perkins Jan. 31. Finnegan told me he’s heading back to Orlando, Florida, to be with his wife and to return to his prior position as the general counsel of Dr. Phillips Charities. Another one bites the dust.

CO: There are a couple of items to keep an eye on in Congress this week. A Senate committee will vote Wednesday on a handful of nominations for DOL leadership posts, including Cheryl Stanton for wage and hour chief, Scott Mugno to run the Occupational Safety and Health Administration, and John Pallasch to fill some of the void at the ETA. They’ll likely be cleared for a full Senate vote, but there’s not telling if and when that might happen.

The House Education and Labor Committee will convene Thursday for a chat on the federal minimum wage. That’s likely a preview of the debate that will go on as Democrats’ bill to raise the pay floor to $15 an hour winds through Congress. Given the way the panel’s membership has recently ballooned, I advise bringing some of those seat cushions they sell at baseball games if you’re planning to go in person. You could be there awhile.

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us on any and all labor and employment news: copfer@bloomberglaw.com and jdiaz@bloomberglaw.com or on Twitter: @ChrisOpfer and @JaclynmDiaz.

See you back here next Monday.

To contact the reporter on this story: Chris Opfer in New York at copfer@bloomberglaw.com