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On May 21, ABC submitted comments to the U.S. Department of Labor’s Wage and Hour Division on its proposal to update and revise the 2016 “white collar” overtime exemption regulations under the Fair Labor Standards Act. 

On March 22, 2019, DOL issued the new proposal, officially named Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, to update and revise the “white-collar” overtime exemption regulations. Among other changes, the Department is proposing to raise the current minimum salary for exemption from $23,660 to $35,308 per year. This level is lower than the threshold of $47,476 included in the Obama-era 2016 overtime final rule. If finalized, the proposal will replace the Obama administration 2016 final rule. 

ABC’s comment letter states, “ABC is pleased the new proposed rule addresses many of the concerns that ABC expressed in comments in response to the Department’s 2017 Request for Information, including retaining in large part the 2004 standard salary methodology, adopting only one standard salary level and not imposing automatic indexing of the salary level test. However, we continue to have concerns regarding the data set being used to set the minimum salary, as well as the increase in the highly compensated salary level and the 10% rule for bonuses.”  Read the comment letter to learn more about ABC’s position. 

ABC hopes DOL will move swiftly to finalize this proposal. 

Background on the Overtime Rules

On May 23, 2016, DOL issued the Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees final rule, which would have changed the federal exemptions to overtime pay under the Fair Labor Standards Act for “white collar” workers by doubling the current minimum salary level for exemption from $23,660 to $47,476 per year and automatically increasing it every three years. Throughout the rulemaking process, ABC was an active participant and urged the Department to withdraw the 2015 proposed rule.

Before the Obama administration 2016 final rule went into effect, it was vacated and permanently enjoined on a nationwide basis by the federal district court for the Eastern District of Texas in the case of Nevada v. Department of Labor.

On July 26, 2017, the Trump administration issued a Request for Information, which sought input on the 2016 final rule, specifically the minimum salary level required for exempt status. In its Sept. 25, 2017, comment letter on the RFI, ABC urged DOL to comply with the district court’s decision and immediately rescind the unlawful 2016 rule. Further, assuming that a new minimum salary standard would be adopted, ABC argued that it should be established by applying the same methodology that was used by the Department in 2004. 

On March 22, 2019, DOL issued a new proposal to update and revise the “white-collar” overtime exemption regulations, which ABC submitted comments on May 21.

ABC will continue to provide status updates on the overtime final rule in Newsline.

On May 14, the U.S. Department of Labor announced an extension of the comment periods of its regular rate and joint employer proposals to June 12, 2019, and June 25, 2019, respectively. 

According to the DOL website, the Notice of Proposed Rulemaking on joint employer status under the Fair Labor Standards Act would ensure employers and joint employers clearly understand their responsibilities to pay at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 in a workweek. The proposal includes a four-factor test that would consider whether the potential joint employer actually exercises the power to:

hire or fire the employee;
supervise and control the employee’s work schedules or conditions of employment;
determine the employee’s rate and method of payment; and
maintain the employee’s employment records.

The regular rate proposed rule aims to change the requirements that define what forms of payment employers include and exclude in the “time and one-half” calculation when determining workers’ overtime rates, according to the DOL website.

ABC’s General Counsel, Littler Mendelson P.C. published analyses with more information on both the joint employer and regular rate proposals.

ABC plans to submit comments on both proposals. The public may submit comments on the joint employer proposal here and on the regular rate proposal here.

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs launched a new webpage with resources for contractors who may undergo an OFCCP compliance check.

According to the DOL website, an OFCCP compliance check is a type of compliance evaluation in which OFCCP seeks to determine whether the contractor has maintained certain records: prior year affirmative action plan results, job advertisements (including state employment service listings) and examples of accommodations for individuals with disabilities.

The OFCCP webpage includes the fiscal year 2019 Corporate Scheduling Announcement List, a copy of the compliance check scheduling letter that is sent out to selected establishments, and a list of frequently asked questions on the compliance check process. 

ABC’s General Counsel, Littler Mendelson P.C., published an analysis with more information on the FY 2019 CSAL and OFCCP compliance checks. 

Additionally, ABC held a webinar on OFCCP’s recent actions and policy changes in March, with resources on compliance checks and other OFCCP programs. ABC members can view the archived webinar in the ABC Academy for Construction Ethics, Compliance & Best Practices.  

On May 8, ABC submitted a letter to the U.S. House Ways and Means Committee regarding the hearing, “Paid Family and Medical Leave: Helping Workers and Employers Succeed.” In the letter, ABC expressed concern over proposed legislation that would mandate employers to provide 12 weeks of paid family and medical leave funded through a new payroll tax on employers and employees. 

ABC is committed to working with Congress and the White House to expand access to paid family and medical leave, and it believes that participation in any federal program established to support and expand family and medical leave should be voluntary for employers and employees.

On May 9, the White House held a summit on protecting Americans from surprise medical billing, which occurs when insured patients incur unexpected charges after receiving treatment from out-of-network health care providers. On April 2, ABC joined a broad-based coalition in a letter to the U.S. House Subcommittee on Health, Employment, Labor and Pensions to hold a hearing to examine surprise billing. ABC has pushed for legislation that would ensure out-of-network costs are disclosed to patients beforehand to protect patients from these burdensome costs.

ABC is pleased that Congress and the White House are committed to work on a bipartisan solution to address this issue and will continue to update members on any progress.

In light of a recent decision by the U.S. District Court for the District of Columbia, certain employers will be required for the first time to submit detailed data on employee compensation and hours worked (or Component-2 data) to the Equal Employment Opportunity Commission as part of their annual EEO-1 form submission by Sept. 30, 2019. The court had initially ordered the collection of Component-2 data for calendar year 2018 on April 25. On May 2, in order to comply with the court’s order to collect two years of pay data, the EEOC announced that EEO–1 form filers should also begin preparing to submit data for calendar year 2017.

The EEOC expects to begin collecting Component-2 data for calendar years 2017 and 2018 beginning in mid-July 2019 and will notify filers of the precise date the survey will open as soon as it is available. Covered employers should be aware that Component-1 data is still due by May 31, 2019.  

On May 3, the U.S. Department of Justice appealed the court’s recent decision ordering the EEOC to begin collecting Component-2 pay data. If the Justice Department appeal succeeds, the district court’s order, as well as the EEOC’s requirement, could be overturned prior to Sept. 30.

For more information on what employers can expect next regarding the EEOC’s collection of Component-2 data, see ABC General Counsel Littler Mendelson’s update

In general, private employers with 100 employees or more that are subject to Title VII of the U.S. Civil Rights Act of 1964 are required to file Form EEO-1 (including both traditional Component-1 data, which reports workforce demographics by job category, race, ethnicity and gender, and now the new Component-2 data). Federal contractors that are otherwise required to file Form EEO-1 will only be required to file Component-2 data if they have 100 or more employees (covered federal contractors with 50-99 employees are required to file Component-1 only). Component-2 includes annual W-2 (box 1) compensation sorted by pay band and annual hours worked. 

ABC has been active in efforts to reverse the court’s decision or, at minimum, extend the time period for employers to comply with any new Component-2 pay data requirement. The EEOC posted a notice on its website clarifying that the appeal does not stay the district court orders or alter EEO-1 filers' obligations to submit Component 2 data, and EEO-1 filers should begin preparing to submit Component 2 data as described above, but it remains unclear what the final outcome will be.

The submission of Component-2 data was initiated during the Obama administration. However, under the Trump administration, OMB blocked the EEOC from requiring employers to submit any compensation data. In March 2019, the D.C. District Court ordered the OMB stay to be vacated. 

ABC will continue to monitor developments and will report to members in Newsline

This article is intended for informational purposes only and does not constitute legal advice or opinion.

ABC hosted a golf tournament May 6 to benefit Folds of Honor, a charitable organization that Major Dan Rooney established 12 years ago to provide educational scholarships to spouses and children of America’s fallen and disabled service members. Since 2017, ABC’s tournament has raised $375,000 for Folds of Honor.

Twelve foursomes comprised of members of the military, construction industry, media and Capitol Hill joined PGA professionals at Columbia Country Club in Chevy Chase, Maryland, following a reception May 5 featuring incredible stories from Ginger Gilbert Ravella, a widow and scholarship recipient, and Rodney “Rocky” Sickmann, a veteran of the U.S. Marine Corps.

Sickmann shared his account as one of 65 hostages at the American Embassy in Tehran, Iran, in 1979. He was just 22 years old, and remained a hostage for 444 days before being released on Jan. 20, 1981. During one rescue attempt in 1980, eight service members lost their lives.

“Every day since I came home, I’ve never forgotten those eight individuals and what they did,” Sickmann said. 

Gilbert Ravella’s husband Troy died on a combat mission in Iraq in 2006, leaving behind five children under the age of 8. “You’re not going to get to meet all the families that ABC is helping, but I hope that you remember me when you’re giving to Folds of Honor and loving these families. They need to know they’re not alone,” she said. “Thank you again from the one and a half million dependents just from Iraq and Afghanistan whose lives are changing every single day.”

Partners supporting the tournament include Big D Metalworks, FlorWright, Forbes Tate Partners, Gaylor Electric, hth companies, inc., KBE Building Corp., Marriott and Residence Inn, Miller & Long Concrete Construction, Prospect Waterproofing Co., Reliable Contracting Co. Inc., Tradesmen International, and Wine and Spirits Wholesalers of America.

“I didn’t serve, so this is how I’m serving,” said FlorWright President Andy Wright, whose parents lived next door to Major Rooney when he was in the Air National Guard in Oklahoma. “I’ve been lucky and successful enough that I can afford to support several scholarships a year. Everyone playing golf in this tournament is providing four scholarships from each team; it’s just awesome.”