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What Could Alex Acosta’s Confirmation as New Labor Secretary Mean for Employers?

Published on 5/2/2017 12:00:00 AM
How Alex Acosta — the new labor secretary — handles the more than 180 federal laws the DOL administers and enforces could provide a clue to the agency’s regulatory and enforcement approach moving forward

On Thursday, April 27, Alexander Acosta was confirmed as the nation’s new labor secretary — the last Cabinet position to be filled under President Donald Trump. With this critical appointment for the federal Department of Labor (DOL), many employers are keenly interested in what lies ahead. How will Acosta influence the policies and actions of the DOL — and how will this affect the way you run your business and manage your employees?

At ComplyRight, we’re committed to freeing employers from the burden of tracking and complying with complex federal laws and regulations, so we’re keeping close tabs on this appointment, as well. Though we can’t predict with any certainty what Acosta and his staff will do in the coming months, we’ll be watching for action on several timely legal issues that now fall under his direction.

“Many workplace rules will move from the back burner,” says Susan Drenning, President of ComplyRight. “The question, then, becomes whether Acosta will amend them, repeal them or perhaps even decide to not enforce them.”

Most Pressing Employment Issues
to be Addressed

First things first: In his early days, Acosta will most likely focus on the administrative task of selecting the political appointees to manage the sub-agencies of the 20,000-person DOL workforce. Almost immediately, he’ll need to choose approximately 20 department heads and high-level leaders, followed by about 120 management executives largely responsible for the ground efforts of the agency. Among the key selections are the wage and hour administrator, the assistant secretary of the Occupational Safety and Health Administration (OSHA) and the officer of Federal Contract Compliance Programs.

“I’m curious about these appointments because these individuals will have a hand in many legal and regulatory decisions that impact our customers,” says Drenning. “As incoming secretary, Acosta will set his sights on several items he’d like to accomplish, and whom he selects for these key positions will provide some insight about his agenda.”

Of the more than 180 federal laws the DOL administers and enforces, there are
a handful of rules that are either in development or newly enacted under the previous Obama administration — all of which will demand the attention of the new DOL leader. How Acosta treats them could provide a clue to the agency’s regulatory and enforcement approach going forward.

These rules include:

Time and Pay

Overtime Rule — All eyes are on the Fair Labor Standards Act (FLSA) overtimerule, which was temporarily blocked by a nationwide injunction in November 2016. The final briefs to the controversial rule — which would have nearly doubled the minimum salary threshold for overtime eligibility from $23,660 to $47,476 — are due June 30. Although it’s unrealistic that Acosta will advance the rule as it’s currently written, he shared in his March confirmation hearing that the current $23,660 threshold is too low.

OSHA and Workplace Safety

Electronic Recordkeeping Rule — Several lawsuits have been filed against OSHA’s Electronic Recordkeeping Rule, which took effect in January 2017. The rule requires certain employers to electronically submit injury and illness data already recorded on mandatory OSHA forms by July 2017. Though it remains to be seen whether Acosta will amend or repeal the rule, the business community has shown a strong opposition to it. Lawmakers have repealed other OSHA Rules (the Volks Rule and the Federal Contractor Blacklisting Rule) this year.
Crystalline Silica Exposure Rule — Lawsuits have also been filed against OSHA’s Crystalline Silica Exposure Rule and, in response, OSHA has delayed enforcement of the rule that generally applies to the construction industry. Originally scheduled to begin June 23, 2017, enforcement will now begin on September 23, 2017. The rule is meant to protect workers against occupational exposure to crystalline silica.
Occupational Exposure to Beryllium Rule — OSHA has delayed the effective date of its Occupational Exposure to Beryllium Rule, too. The rule, which would lower the allowed levels of the toxic metal, is now scheduled to take effect on May 20, 2017. OSHA requested the review to look further into questions regarding law and policy.
Walking-Working Surfaces/Fall Protection Rule — Effective January 2017 but with phased-in requirements, the rule outlines new safety standards to combat slip, trip and fall hazards. No delays have been announced at this time.
Penalty Increases — Effective January 2017, penalties for violations increased as much as 78% to adjust for inflation.
It is uncertain whether Acosta will focus on rolling back the OSHA increases that occurred in the past year.

Federal Contractors

Federal Contractor NLRA Rule, Paid Sick Rule, Minimum Wage Rule — Each of the three rulings require workplace postings for companies with federal contracts. Some analysts believe Acosta could roll back these rules based on his background with the National Labor Relations Board (NLRB) and leanings as an employer-sided attorney.
Nondisplacement of Qualified Workers Under Service Contract Rule — Effective since 2013, the rule gives workers on a federal service contract the right of first refusal for employment with the successor contractor. Analysts speculate Acosta will view this rule as an unnecessary and unfair infringement on business, making it subject to reversal.

Compliance Under a Changing DOL

In addition to the above issues, Acosta will play a pivotal role in any “worker-friendly” paid sick leave and equal pay rules coming out of the DOL, as well as strategic enforcement of proper independent contractor classification and whistleblower protections.

Something else to keep in mind: President Trump has proposed a 21% cut to the DOL’s budget. Though it would seem such a deep cut would strain the DOL’s staffing, investigation and enforcement efforts, it’s too early to know how that will play out. At least, initially, the budget proposal targeted a series of grant programs it would reduce or eliminate.

“Like with the actual issues now in the spotlight, we’ll have to wait and see how small businesses are impacted by a new labor secretary and potential DOL budget cuts,” says Drenning. “No matter the twists and turns in the employment law landscape, we’ll be watching and providing guidance and support as you begin to navigate them.”

Jaime Lizotte
Presented by: Jaime Lizotte,
HR Solutions Manager
Misclassifying workers is a risk your business can’t afford to take. Federal and state agents are monitoring the situation more closely and cracking down with bigger fines and penalties. At the same time, wage and hour lawsuits are on the rise, with many “salaried” employees recognizing they are non-exempt in the eyes of the law — and therefore owed overtime.
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