Posts Tagged ‘Department of Labor’

PA Workplace Misclassification Act

by HDlawblog Posted: Friday, 4/29/2016

In March 2016 the Pennsylvania Department of Labor and Industry produced a white paper report on the “Administration and Enforcement of the Construction Workplace Misclassification Act in 2015.” Under the Act, the DLI investigates and penalizes construction companies that misclassify employees as independent contractors.

Here’s a quick snapshot from the Report:

pic for 4-29-16 blog

But in 2013, under similar circumstances, the Pennsylvania Commonwealth Court held that the general contractor’s payments to the subcontractor did not afford protection, and the Prompt Payment Act did not shield the contractor and the surety from liability. Berks Products Corp. v. Arch Ins. Co., 72 A.3d 315.

Those are the cases of Workplace Misclassification that the Bureau of Labor Law Compliance has investigated in the past five years. Notably, there were more investigations in 2015 than the previous four years combined. Also, the investigations netted $217,450 in penalties, which is a 1,612% increase from the 2014 penalty amount. In fact, the Bureau only collected $12,700 in penalties in 2014. Point being, DLI is emphasizing the enforcement of this Act, and all construction companies should take a very close look at how they supply manpower to their projects.

The Workplace Misclassification Act applies to all construction companies working on all types of projects—public, private, residential, or commercial. The Act sets forth a checklist of considerations that are scrutinized when determining if a laborer on a project is actually an independent contractor. If the laborer is misclassified as an independent contractor—when in fact he is really an employee—DLI will levy a fine. In some instances, DLI has the authority to seek criminal prosecutions.

To comply with the Act, every independent contractor must have a written contract. Further, every laborer should be analyzed with consideration of the numerous other requirements under the Act. DLI generally receives its leads from (1) complaints filed by laborers; (2) findings made during construction site visits; and (3) referrals from other government agencies, particularly the Office of Unemployment Compensation Tax Services. To avoid penalties, it is best to review your laborers and seek legal advice as necessary.

What’s Happening Now . . .

11.2 % Increase

  • Increase in construction spending for first two months of year, comparing 2015 to 2016.
  • Construction spending for January & February 2015 was $141.3 billion.
  • Construction spending for January & February 2016 was $157.1 billion.

Source: U.S. Census Bureau News, February 2016 Construction at $1,144.0 Billion Annual Rate, U.S. Dept. of Commerce (Apr. 1, 2016).

Newsletter written by Jeffrey C. Bright, Esq. , an attorney licensed in Pennsylvania and Maryland. For more information, contact an attorney at Harmon & Davies, P.C.

 

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Posted in Construction | Comments Off on PA Workplace Misclassification Act

Busy Week at the OFCCP – Does it affect your company?

by HDlawblog Posted: Friday, 8/30/2013

          On August 27, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) announced its long awaited Final Rules regarding significant revisions to the affirmative action obligations pertaining to the hiring of veterans and the disabled under the Vietnam Era Veterans Readjustment Assistance Act and Section 503 of the Rehabilitation Act of 1973, respectively.  For many years, most federal contractors have been developing two separate affirmative action plans:  one relating to the employment of Minorities and Women under Executive Order 11246, and the other relating to the employment of the Disabled and Veterans under the two statutes mentioned previously.  Up until now, the AAP for the Disabled and Veterans did not include any numerical goals, but the new Rules establish such goals and include new data collection and analysis requirements for contractors.  Broadly, the goal for employment of the Disabled is 7%, but whether this is looked at in each job group or in the work force as a whole is dependent upon whether the contractor has 100 employees or more.  The goal for the employment of Veterans is 8%, although there is a procedure established that would allow a contractor to develop a different goal based upon the “best available data.”  If your firm does business with the U.S. Government as a contractor or subcontractor, you are probably subject to these new requirements.

           Also, on August 23, the OFCCP announced the rollout of its updated Federal Contract Compliance Manual, a 500 page multi-chapter manual which provides guidance for OFCCP Compliance Officers in areas such as the conducting of desk audits of affirmative action programs, on-site reviews of supply and service contractors, and the appropriate remedial actions to take in the event of demonstrated noncompliance.  This revised manual has been in the works for several years and seeks to incorporate some of the practices of the OFCCP under the Obama administration.  For example, it provides guidance to Compliance Officers as to when and how to seek additional employment data from contractors for further analysis during the desk audit phase of an OFCCP audit.  The Compliance Manual itself does not have the force of law, but it does allow us to anticipate the most likely actions of the OFCCP during any possible audits.

          Harmon & Davies, P.C. has been working with federal contractors (both those providing supplies or services, as well as construction) to assist them with developing Affirmative Action Plans and dealing with the OFCCP during audits or investigations.  Please contact us if you need assistance in these areas.

This article is authored by attorney Thomas R. Davies and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

 

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Posted in Affirmative Action Plans and OFCCP Compliance, Labor & Employment, OFCCP | No Comments »

The NLRB – The U.S. Senate – The Rolling Stones

by HDlawblog Posted: Wednesday, 7/17/2013

You may very well be wondering what these three topics have in common.  While watching the news yesterday regarding the debates in the Senate about the “nuclear option” threatened by Senator Harry Reid, which would have changed long-standing rules of the Senate to permit presidential nominations for positions in the administration to be passed by a simple majority rather than needing six votes to survive a threatened filibuster, I was reminded of a Rolling Stones song.  In 1968, noted contemporary philosophers Mick Jagger and Keith Richards penned the words to what was to become one of the Rolling Stones’ most popular songs, “You Can’t Always Get What You Want.”  If you are an aging baby boomer like me, the chorus of that song is hardwired into your brain, especially these lines:

“No, you can’t always get what you want

But if you try sometime, you just might find

You get what you need.”

As most people that follow labor law at all know by now, there has been a controversy for the last several years regarding the composition of the National Labor Relations Board and the validity of several “recess appointments” made by President Obama to the National Labor Relations Board in January 2012.  (For additional information, see NLRB DC Circuit.)

For the last several months, the NLRB, which is supposed to have five members (traditionally three from the President’s party and two from the other party), has been operating with just three Democrat members, Chairman Mark Gaston Pearce and recess appointees Sharon Block and Richard Griffin.  Senate Republicans were incensed that even after the recess appointments had been declared unconstitutional by the D.C. Circuit Court of Appeals, President Obama re-nominated Block and Griffin to the NLRB.  It appeared that a line in the sand had been drawn over these nominees, which brought Senator Reid to the point of threatening the “nuclear option.”

As a result of lengthy discussions over the past two days, a compromise was reached which allowed pending nominations, including that of Thomas Perez (for Secretary of Labor) to move ahead for votes, and the submission of replacement nominations for Block and Griffin.  It now appears that the nominations of Chairman Pearce and Republicans Harry Johnson and Phillip Miscimarra, which had been previously voted out of Committee, will move forward together with replacement nominees, Democrats Kent Hirozawa (currently Chief Counsel to Chairman Pearce) and Nancy Schiffer (a former AFL-CIO General Counsel).

While many in the employer community seemed perfectly happy with the idea of a completely nonfunctioning National Labor Relations Board, at least a full Board, comprised of both Democrats and Republicans, will be far better than a Board with three Democrats.  Even though the Obama Administration, through the Democrat members of the NLRB, will be able to achieve some, if not all, of its administrative agenda, there will at least be dissenting opinions to NLRB actions, which will assist in clarifying the issues for any reviewing court.

This brings me back to the words of Mick Jagger and Keith Richards.  As a result of the compromises, no one may have gotten what they wanted, but they may have gotten what they needed.

This article is authored by attorney Tom Davies and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

 

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Surveying – A (Not-So) Subtle Change in the Davis-Bacon Act

by HDlawblog Posted: Monday, 7/15/2013

On March 22, 2013, Mary Beth Maxwell, the Acting Deputy Administrator for the Wage and Hour Division of the U.S. Department of Labor, issued Memorandum No. 212 that significantly altered the application of the Davis-Bacon Act to survey crews on federally funded construction projects.  While Acting Deputy Administrator Maxwell characterized the Memorandum as guidance that “supplemented” guidance in Memoranda issued in 1960 and 1962, the fact of the matter is that whereas survey crews were generally excluded from Davis-Bacon Act coverage prior to the issuance of her Memorandum, they are now generally going to be included.

This action was accomplished through a revision to Section 15e20 of the Field Operations Handbook, which is the enforcement “bible” for DOL investigators.  The previous language of Section 15e20(b) included the following:

 “As a general matter, members of the survey party who hold the leveling staff while measurements of distance and elevation are made, who help measure distance with a surveyor chain or other device, who adjust and read instruments for measurement or who direct the work are not considered laborers or mechanics.  However, a crew member who primarily does manual work, for example, clearing brush, is a laborer and is covered for the time so spent.”

 The new language appears designed to reverse this presumption.  It appears that the Operating Engineers Union successfully lobbied the Department of Labor for this change.  Since the Department of Labor has not normally included these classifications in its surveys for purposes of wage determinations, the Memorandum advises that the conformance process will be used until future surveys include these classifications.

By letter dated July 11, 2013, the Chairman of three Congressional committees or subcommittees questioned Acting Deputy Administrator Maxwell on this significant change in long-standing policy and asked for information, including documents relating to the Operating Engineers Union’s request for this change.

Both engineering firms who may do survey work on federal projects and general contractors who may hire survey crews need to be aware of this change so that they are not found in violation of the Davis-Bacon Act.  Please feel free to contact Harmon & Davies if you need additional information.

This article is authored by attorney Tom Davies and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in Construction, Davis-Bacon Act, Prevailing Wage | No Comments »

Local Labor & Employment Issues: Student Guestworkers File Complaints against Harrisburg McDonald’s Franchisee

by HDlawblog Posted: Monday, 5/6/2013

Earlier this year, student guestworkers participating in the State Department’s J-1 Summer Work Travel Program filed complaints with the Department of Labor and State regarding working and housing conditions at three Harrisburg, Pennsylvania area McDonald’s franchises.  Visas under the J-1 Summer Work Travel Program are available to post-secondary students pursuing a full time post-secondary education outside of the United States who come to the United States to work and travel during summer vacation.

The complaint alleges that the franchise owner and its labor supplier, GeoVisions, engaged in various illegal practices that bring the students’ wages below minimum wage, including such practices as, deducting above-market rent from the students’ paychecks while providing substandard basement housing.  The franchisee owner and GeoVisons allegedly capitalized on the students’ desperation to work in order to pay back the debt incurred to cover the Summer Work Travel Program fees by placing the students on call at all times.  The complaint further alleges various violations of the Fair Labor Standards Act, including failure to record all hours worked by students, failure to pay the students for all hours worked, unlawful deductions resulting in payment below the minimum wage, unlawful pre-employment expenses resulting in payment below the minimum wage, and failure to pay overtime wages for hours worked over 40 in a week.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Federal Contractor and OFCCP Go Blow for Blow

by HDlawblog Posted: Wednesday, 3/13/2013

The Labor Department’s Office of Federal Contract Compliance Programs (“OFCCP”) and a federal contractor that provides security services to the State Department are engaged in a battle over whether the federal contractor was obligated to produce written affirmative action plans for certain sites.  The OFCCP has asked an administrative law judge to order the federal contractor to produce the affirmative action plans or risk termination of its current federal contracts and debarment from future contracts.  Meanwhile, the federal contractor appears to be steadfast in its position that it is not obligated to produce the affirmative action plans because the OFCCP failed to establish it had probable cause to commence compliance evaluations at 21 of its establishments in fiscal year 2011.

If you don’t already know, companies with federal contracts of $50,000 or more and more than 50 employees have obligations under Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam-Era Veterans Readjustment Assistance Act to develop, implement and maintain affirmative action plans (“AAPs”) for each establishment.  Under the applicable regulations, when requested, a federal contractor is required to submit to the OFCCP the company’s annual AAP and supporting documentations for the facility selected for a compliance review.

In the case discussed above, the OFCCP notified the federal contractor via a scheduling letter that the agency had selected its Milwaukee, Wisconsin establishment for a compliance review.  The federal contractor had previously received scheduling orders notifying it that its Portage, Indiana establishment was chosen for a compliance review.  When compliance officers requested information from the federal contractor pursuant to the desk audit phase of the compliance reviews for the establishments, the federal contractor failed to provide copies of its AAPs and other supporting documents to the OFCCP.  As stated above, the OFCCP filed a complaint with an administrative law judge asking the judge to order the federal contractor to produce the AAPs or risk termination of its federal contracts and debarrment from future federal work.  The outcome should be interesting.

The attorneys at Harmon & Davies are here to assist you with your affirmative action plan and OFCCP compliance needs.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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FedEx Makes Economic Decision to Settle Charges of Hiring Discrimination for $3 Million Dollars

by HDlawblog Posted: Tuesday, 4/3/2012

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) proudly announced on March 22, 2012 that it entered into a conciliation agreement to resolve allegations of hiring discrimination by two subsidiaries of FedEx Corp. with federal contracts.  These subsidiaries, like most companies that are awarded federal contracts, must comply with OFCCP requirements and regulations.

By way of background, federal contractors of a certain size or with federal contracts of a certain amount must file annual affirmative action plans (“AAPs”).  AAPs are generated using computer software.  The computer software creates an overview of the federal contractor’s workforce based on the overall workforce and the number of applicants, hires, promotions, and terminations that occurred during the previous year.  Such computer programs specifically look at the number of female and minority applicants, hires, promotions, and terminations to determine whether the federal contractor’s decisions with respect to hiring, promoting, and terminating indicates any statistically disparate impact on females and minorities.

In the case of the two FedEx subsidiaries, the OFCCP’s allegations against the FedEx subsidiaries were based on computer statistical analysis that presumably indicated a disparity in the subsidiaries’ hiring process and sparked the OFCCP’s investigation.  In other words, the OFCCP’s allegations against FedEx did not step from individual complaints of discrimination.  Even though no one apparently complained that FedEx’s subsidiaries discriminated against them during the hiring process, according to Secretary of Labor, Hilda L. Solis, that is okay because findings of discrimination can rest on disparate impact statistical analysis alone.  In the FedEx case, according to Solis, the OFCCP saw statistical “trends of discrimination, not only against one group, but against many groups across the country.”

More specifically, according to the OFCCP News Release, during a series of regularly scheduled reviews, OFCCP compliance officers found evidence that FedEx’s hiring processes and selection procedures violated Executive Order 11246 by discriminating on the bases of sex, race, and/or national origin against specific groups identified at 23 facilities in 15 states.  The reviews also allegedly uncovered extensive violations of the executive order’s record-keeping requirements.

The FedEx subsidiaries admitted no wrongdoing, but rather than engage in a prolonged and expensive resolution process with the Department of Labor, the subsidiaries entered into a conciliation agreement with the OFCCP under which the companies agreed to pay a total of $3 million in back wages and interest to 21,635 applicants who were rejected for entry-level package handler and parcel assistant positions and agreed to extend job offers to 1,703 of the affected workers as positions become available.

The FedEx subsidiaries also committed to wide-ranging reforms including: (1) the company promising to correct any discriminatory hiring practices and implement equal employment opportunity training; (2) launching extensive self-monitoring measures to ensure that all hiring practices fully comply with the law; (3) agreeing to engage an outside consultant to perform an extensive review of the company’s hiring practice and provide recommendations to change and improve those practices; (4) agreeing to train incumbent and future supervisors and employees to monitor compliance with the equal opportunity laws enforced by the OFCCP; and (5) taking necessary steps to comply with all record keeping requirements.

The conciliation agreement entered into by the FedEx subsidiaries appears to have been an economic decision made by the company.  It will forever remain unknown whether FedEx actually engaged in discriminatory hiring decisions.

What’s clear from the FedEx ordeal is that federal contractors should be particularly attentive when it comes to OFCCP compliance. In addition to Executive Order 11246, the OFCCP enforces certain other acts aimed at protecting the disabled and veterans.  Those who do business with the federal government, both contractors and subcontractors, must not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran.

For assistance with creating your Affirmative Action Plan or other OFCCP compliance issues, please contact Harmon & Davies, P.C.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in Affirmative Action Plans and OFCCP Compliance, FedEx SmarkPost Inc. | No Comments »

Classification Crackdown

by HDlawblog Posted: Tuesday, 3/27/2012

The United States Department of Labor estimates that 30% of employers are misclassifying employees as independent contractors, which results in billions of dollars in lost revenue every year. Citing a desire to minimize losses in contributions to unemployment insurance funds, protect workers’ rights and “level the playing field” for employers that abide by the law, the DOL has launched the Federal Misclassification Initiative, where they are partnering with the IRS and a number of state governments to share information. The memoranda of understanding contain an agreement to share information, in order to determine when workers are being misclassified.  The cooperative efforts will likely lead to multi-pronged scrutiny and enforcement proceedings.

The initiative will ensure that a worker classified as an independent contractor does not have to bring a claim against his or her employer to allege misclassification.  Instead, the DOL, IRS and/or state agency may initiate directed investigation which could lead to an audit of the employer’s payroll practices.  The DOL expects this initiative will increase the percentage of DOL-directed investigations to approximately 35% of all its investigations.  In particular, the DOL stated that they will be targeting certain industries, including delivery companies, construction companies, companies with installation workers, sales organizations, companies that provide on-site computer technicians and those companies that hire them, and cleaning franchises.

The difficulty comes in defining an independent contractor, because no unified definition exists. Despite the difficulty in defining independent contractor, the pitfalls are significant. Employers who misclassify their employees as independent contractors risk numerous potential claims including tax claims (state, federal, and FICA); wage (e.g., overtime), indemnification, and benefit claims,; claims for civil penalties, including penalties for failing to withhold taxes or pay final wages, or failing to provide itemized wage statements; unanticipated tort claims to third parties and wrongful discharge claims; and criminal investigations.

There are a number of steps that employers can take to prevent misclassification. Most importantly, employers must show that they do not exercise direction or control over their independent contractors. Employers should negotiate the rate of payment, require a signed agreement stating the independent contractor status, and require the worker to provide transportation, tools and equipment. Employers should never require reporting, issue handbooks, provide evaluations or prohibit the worker from working for or with others.

If you believe that employees may be misclassified, or you have any questions regarding classification in general, you should contact legal counsel as soon as possible.

This article is authored by attorney Casey L. Sipe and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in Construction, Labor & Employment | No Comments »