Daily Labor Report®

Punching In: March Means Regulatory Madness at Labor Board, EEOC

March 18, 2019, 10:01 AM

Monday morning musings for workplace watchers

Adventures in Outsourcing| Ray, the New Regs Czar | The Other Overtime Debate

Chris Opfer: This week, of course, starts the greatest stretch of sports watching opportunities for the entire year. To borrow a phrase from Hunter S. Thompson, the first long weekend of the college basketball tournament is in some circles a far, far better thing than the Super Bowl, the Kentucky Derby, and the Lower Oakland Roller Derby Finals all rolled into one. No matter who you’re rooting for (unless it’s Duke), here’s wishing a happy and productive March Madness.

Speaking of productivity, Josh Eidelson and Hassan Kanu reported last week that the National Labor Relations Board is thinking about bringing in a small army of contractors to plow through some 30,000 public comments on the board’s proposed “joint employer” rule. The irony that the board would contract out part of the work of enacting a new rule to limit labor law liability for businesses that use contract workers wasn’t lost on the Twitterverse. But the move also raises some legal questions.

“In general, as a matter of administrative law, I do not think contracting out the initial review of comments is prohibited, as long as the contractor’s role is appropriately limited,” Fordham University law professor Aaron Saiger recently told me. “The agency itself has a responsibility to consider and respond to all relevant comments. If it uses a contractor, therefore, it has a duty to ensure that the contractor correctly determines the relevance of all comments. And it has a duty itself to consider and respond to each cogent point that the relevant comments raise.”

In other words, the board is limited in what part of the process it can contract out, according to Saiger. Given that worker groups are almost certain to use this as another line of attack against the rule when it’s eventually finalized, the headache that may come with using contractors could wind up outweighing any savings in terms of cost and time.

Hassan chatted with former NLRB Member Brian Hayes about another rulemaking question at the board—whether Democrat Lauren McFerran is being kept out of the loop—in this week’s Punching In podcast.

Jaclyn Diaz: Neomi Rao is probably getting fitted for her black robes as we speak, after being confirmed to serve on the U.S. Court of Appeals for the District of Columbia Circuit last week. Taking her place at the Office of Information and Regulatory Affairs in an acting capacity is Paul Ray.

Ray is the associate administrator of OIRA, the office responsible for reviewing all significant federal regulations. He also has some experience in the labor world. Ray previously worked in Labor Secretary Alex Acosta’s office as one of his heavily relied-upon advisers.

During his relatively short stint at the Frances Perkins building, Ray was responsible for writing regulations (I wonder if his fingerprints are on the more controversial proposals like the failed tip pool regulation or the patient lift policy) and advising the secretary working alongside Nick Geale, Acosta’s chief of staff. Ray, like many of the other political staffers at DOL these days, didn’t stick around for long. We hear he was more than ready to say goodbye and the feeling was mutual among some of his colleagues in the department.

Businesses will likely be happy to see Ray head up Trump administration regulatory review efforts. Prior to OIRA and DOL, Ray represented major business groups, like Exxon, the National Association of Manufacturers, and the National Federation of Independent Business as an associate with Sidley Austin LLP.

It’s unclear what his position is on dwarf tossing, though.

CO: The Equal Employment Opportunity Commission today is slated to open its annual pay data survey, but there’s still no sign of precisely what information businesses have to provide to the feds.

A judge earlier this month ruled that the White House Office of Management and Budget wrongly blocked an Obama era expansion of pay data reporting requirements. That ruling appears to make the broader wage and hour reporting requirements—broken down by race, sex, and ethnicity—effective immediately.

Business advocates have been saying that the information isn’t likely to help the EEOC combat pay discrimination and that any benefit is outweighed by the paperwork and compliance burden for employers. They’re hoping Justice Department lawyers representing OMB in the litigation appeal the court decision and ask the judge to put the ruling on hold until the legal battle is sorted out.

“We think there’s ample grounds for a stay and an appeal,” Seyfarth Shaw lobbyist Randy Johnson told me last week. “The EEOC is not ready administratively to accept this wave of new data, much less are companies ready to provide it.”

Even if the EEOC wants to push back the new data requirements, it may not have the power to do so alone. The five-member commission has three open seats right now. Changes to reporting requirements would likely require a quorum.

JD: The smoke has cleared since the DOL released details on the agency’s new overtime proposal late March 7. Today, I’m taking a closer look at a potential issue in that rule that could cause headaches for employers of workers making six figures.

(Note for all you dying to submit your public comments: The overtime proposal still hasn’t published in the Federal Register as of Monday morning, meaning the public commenting period is still delayed for now).

The department wants to implement a new salary cutoff of about $147,000 for workers to be considered “highly compensated employees” and therefore exempt from overtime pay requirements under federal law. The move would be a nearly $50,000 jump from the current $100,000 salary standard. That’s not to mention that it’s about $12,000 higher than the Obama administration’s 2016 overtime proposal.

The thinking is if workers don’t earn that minimum salary, and don’t meet other exemption standards, businesses will have to make some decisions on whether to give employees a huge raise or to otherwise restructure their roles.

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.

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

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