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Punching In: Pandemic OSHA Citations, WARN Cases on Their Way

Sept. 14, 2020, 9:49 AM

Monday morning musings for workplace watchers

Bracing for Labor Rules | OSHA Citations |6-Month WARN Act Trigger

Ben Penn: After six weeks of deliberations, the Labor Department responded Friday to a federal judge’s opinion striking down key portions of the coronavirus paid-leave rule. The agency released an updated regulation, which expands leave entitlements to more health-care workers and eases the deadline for documentation requirements for workers seeking the benefits.

Standing firm: In a twist, the agency dug its heels in on other pieces of the original rule that the judge vacated, reaffirming provisions on intermittent leave and work availability. Accompanying guidance from DOL’s Wage and Hour Division settled another area of confusion for some attorneys: The court’s ruling to partially invalidate the regulation applies nationwide, not just in New York.

Worker status next: Some sources now expect WHD to also debut the independent contractor proposal.

Management advocates in particular are eager to see what’s inside the independent contractor rule, but a development last week may give attorneys pause about the fate of that initiative, which would clarify worker status under the Fair Labor Standards Act.

Joint employer implications: A federal judge Sept. 8 dealt a blow to the DOL’s deregulatory agenda by invalidating the agency’s narrowed standard for determining when multiple businesses are joint employers and share liability for failing to pay workers minimum wages or overtime.

An independent contractor rule surely will involve FLSA principles that overlap with joint employment, which could make it vulnerable to litigation once again from Democratic attorneys general. The AGs already found a judge to grant them standing to sue on joint employment, opening the door to another suit on the contracting regulation. They’d be able to make the same argument on standing: that workers classified as independent contractors lose out on wages, leading to lower tax revenue for states.

The judge’s opinion last week took issue with DOL’s failure to recognize the FLSA’s broad definition of “employ” as “to suffer or permit to work.” If the department again overlooks the “employ” definition when it comes to figuring out employee vs. contractor status, the administration could also be on legally dubious ground.

Bruce Rolfsen: It’s been six months since the coronavirus became an on-the-job threat to U.S. workers—a significant milestone for the Occupational Safety and Health Administration.

Six months is the time limit under federal law for OSHA to conduct an inspection and then issue a citation. The agency is likely to use most of that window to issue citations for many Covid-19-related cases, officials from OSHA and the Labor Department’s Office of the Solicitor have said.

That means over the next four weeks, OSHA will be required to issue citations or close cases in about 55 virus-related inspections started by April 20, including 45 cases involving a worker’s death or hospitalization.

More on the way: The rate at which OSHA will release citations or close cases will likely accelerate in May, with the agency needing to reach decisions on another 284 inspections by May 20.

OSHA has opened 996 inspections involving Covid-19 issues, including 602 worker fatality or hospitalization cases, according to enforcement records dated to Sept. 10.

As of Sept. 10, OSHA had issued citations in only a handful of virus-related cases. It cited four Ohio nursing homes for not adhering to respiratory protection regulations; a Georgia nursing home for failing to notify OSHA when six staff members were hospitalized for Covid-19; and a South Dakota meat processing plant operated by Smithfield Packaged Meats Corp. for not implementing an effective prevention program.

New York, New Jersey focus: A large number of citations will be coming out of OSHA’s Region 2, covering New York and New Jersey—states hit hard at the start of the pandemic. The two states accounted for 25 of OSHA’s 61 inspections in the first month of the pandemic.

By Sept. 9, of the 996 OSHA inspections, 326 were in New York and New Jersey. Region 5, covering upper Midwest states, accounted for another 255 inspections.

Heightened scrutiny: Worker advocates will be watching how the agency handles these early cases. OSHA doesn’t have a specific rule requiring employers to protect workers from the coronavirus, a point Democrats and labor unions have repeatedly made. Instead, the agency’s enforcement is expected to depend on existing rules, such as mandates for respirators, training and fit testing, and for protecting workers from blood that could carry viruses.

The agency’s also expected to use the general duty clause of the Occupational Safety and Health Act to cite employers. The clause requires employers to provide workplaces that are free of known, dangerous hazards that can be feasibly mitigated.

BP: The pandemic’s half-year mark also has implications for a law requiring businesses to give workers 60 days’ advance notice of mass layoffs or plant closures. The requirements of the Worker Adjustment and Retraining Notification (WARN) Act apply to furloughed workers who are sidelined at least six months.

Spike in lawsuits: There have been only 11 virus-driven federal WARN Act class actions filed this year, according to a Littler Mendelson analysis. But attorneys say the six-month trigger may now open the litigation floodgates from furloughed employees at companies that decided not to send out notices, or that were unaware of the law.

Legal ambiguity: Employers hope to qualify for WARN’s notice exemptions for layoffs caused by “unforeseen business circumstances.”

But that’s a largely untested legal exemption and the facts vary by circumstance. Employers that use the “unforeseen” exemption still must send out notices after layoffs.

Some businesses were reluctant to send the notices to furloughed workers because they want to ensure they’ll be able to ramp up operations with existing staff when the time is right. But as the months of contagion dragged on, some companies took the precaution of sending out notices before they hit the six-month threshold, lawyers who focus on the WARN Act told me.

Lobbying denied: Business groups lobbying throughout the pandemic first went to the Labor Department to seek a regulation or guidance on virus-related WARN Act liability, but didn’t get the answers they were looking for, two sources told me.

They had more luck when they turned to Congress. The GOP stimulus bill introduced in July included a carveout from the WARN Act for companies that shuttered due to Covid-19. But that provision, along with other liability protections Republicans want, has been a nonstarter for Democrats in the ongoing virus aid negotiations.

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. See you back here next Monday.

To contact the reporters on this story: Bruce Rolfsen in Washington at BRolfsen@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editor responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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