Labor Department delays full Fiduciary Rule for additional 18 months

08/10/2017
By Mark Huffman

The Labor Department has served notice that it intends to delay full implementation of the Fiduciary Rule until July 2019.

The government revealed the delay in a brief filed in a court in Minnesota, where it is a defendant in a lawsuit filed by Thrivent Financial. Previously, the Trump Administration had said it would delay key provisions of the Obama Administration rule until January 2018.

The Fiduciary Rule requires financial advisors to always place the client’s interests ahead of their own. While that might sound fairly straightforward, the financial services industry has resisted that.

One argument is that advisors who make no commissions from the investments their clients make would have to charge so much for their advice that only wealthy investors could afford their services. However, some experts say that delaying the rule further will only make it easier for firms to stall their implentation efforts.

“We have consistently opposed any additional delay, which will only serve to increase uncertainty over the rule’s ultimate fate,” Barbara Roper, director of investor protection at Consumer Federation of America, told ConsumerAffairs.

(Read More)

Lies surrounding Davis Bacon compliance land concrete contractor jail time

WHD News Release: 07/27/2017
Release Number: 17-1028-SAN

PORTLAND, Ore. – The owner of an Oregon concrete company that contracted with the federal government recently started a two-month prison sentence for lying to federal investigators. The crime occurred when he told U.S. Department of Labor officials that he had paid employees more than $93,000 in back wages that the Department’s Wage and Hour Division found the company owed its workers following a 2014 investigation.

The Department’s investigation revealed that Westwind Concrete had failed to pay the proper prevailing wage rates on a project in Tualatin in violation of the Davis Bacon and Related Acts, which applied because the U.S Department of Housing and Urban Development financed the project. Westwind Concrete is based in Cloverdale.

Westwind owner Jeffery Hurliman assured the division that he would pay more than $93,000 in back wages he owed to 27 workers and later provided certifications that he claimed were from his employees attesting to having received back wages.

The Department’s Office of Inspector General investigated Hurliman after officials in the division’s Portland office noted discrepancies on the proofs of payment. The investigation revealed that the certifications were falsified and that when Hurliman learned about the investigation, he offered money to employees to lie to investigators.

The Department’s findings led to federal criminal prosecution against Hurliman and a two-month prison sentence. Hurliman agreed to a deal in January 2017 in which he pleaded guilty to witness tampering and providing false statements to the government, both felonies, and began his sentence on June 15, 2017. He will be on supervised release for three years following his release from prison on Aug. 15, 2017. In the meantime, the department has sued to prevent him from obtaining future government contracts.

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2017 SCA Health & Welfare Fringe Benefit Increase

Wage and Hour Division (WHD)

The McNamara-O’Hara Service Contract Act requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement. The Department of Labor issues wage determinations on a contract-by-contract basis in response to specific requests from contracting agencies. These determinations are incorporated into the contract.

The health and welfare fringe benefit is one of the required SCA fringe benefits. Effective August 1, 2017, the prevailing health and welfare fringe benefits issued under the SCA will increase to a rate of $4.41 per hour.

Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors (EO 13706), requires certain employers that contract with the federal government to provide their employees with up to 56 hours (seven days) of paid sick leave annually, including for family care and absences resulting from domestic violence, sexual assault, and stalking. EO 13706 applies to new contracts with the federal government that result from solicitations issued on or after January 1, 2017 (or that are awarded outside the solicitation process on or after January 1, 2017).

To comply with EO 13706, an alternate health and welfare rate has been established that excludes the sick leave portion of the calculated health and welfare rate. The SCA health and welfare fringe benefits level for employees performing on contracts covered by EO 13706 will be $4.13 per hour.

(Dol.gov- SCA Home Page)

Labor Secretary to Start Building Apprenticeship Task Force

Jul 25, 2017
Thomasnet.com

The U.S. Secretary of Labor Alexander Acosta has opened up nominations for the Task Force on Apprenticeship Expansion. According to a recent news release from the Department of Labor, creating the task force is the first step in implementing President Donald Trump’s executive order to expand apprenticeships.

In June, President Trump said that apprenticeships could help fill millions of open jobs, however he was reticent to dedicate additional taxpayer money to the program.
According to the Department of Labor (DoL), the current number of active apprenticeships in the United States is 505,371.

In March, Salesforce.com CEO Marc Benioff challenged the president to create five million apprenticeships over the next five years. President Trump accepted the challenge, and his proposed budget includes a $5 million increase ($95 million overall) in spending appropriated for apprenticeships.

Secretary Acosta will chair the task force, which has been charged with identifying ways to promote apprenticeships, particularly in sectors where apprenticeship programs are currently insufficient.

The task force will create a final report for President Trump that will include:
  • Recommendations on federal initiatives to promote apprenticeships.
  • Administrative and legislative reforms that will facilitate the formation and success of apprenticeship programs.
  • The most effective strategies for creating industry-recognized apprenticeships.
  • The most effective strategies for amplifying and encouraging private-sector initiatives to promote apprenticeships.

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USDOL Wage & Hour Division – 2017 Prevailing Wage Seminars

Join us at a Prevailing Wage Seminar in your region in 2017!

The Wage and Hour Division (WHD) Prevailing Wage Seminars (Prevailing Wage Seminars) are three-day compliance trainings designed for regional stakeholders (unions, private contractors, state agencies, federal agencies and workers). In these seminars, conference participants will learn about the following:

  • The Davis-Bacon Act and McNamara O’Hara Service Contract Act
  • Executive Order 13495 “Nondisplacement of Qualified Workers”
  • Executive Order 13658 “Establishing a Minimum Wage for Contractors”
  • The process of obtaining wage determinations and adding classifications
  • Compliance assistance and enforcement processes
  • The process for appealing wage rates, coverage, and compliance determinations

 

Prevailing Wage Seminars for 2017 are being scheduled in the following cities

  • Pittsburgh, PA – August 15-17, 2017

 

(Read More)

USDOL Wage & Hour Division Announces 2017 Prevailing Wage Seminars

Join us at a Prevailing Wage Seminar in your region in 2017!

The Wage and Hour Division (WHD) Prevailing Wage Seminars (Prevailing Wage Seminars) are three-day compliance trainings designed for regional stakeholders (unions, private contractors, state agencies, federal agencies and workers). In these seminars, conference participants will learn about the following:

  • The Davis-Bacon Act and McNamara O’Hara Service Contract Act
  • Executive Order 13495 “Nondisplacement of Qualified Workers”
  • Executive Order 13658 “Establishing a Minimum Wage for Contractors”
  • The process of obtaining wage determinations and adding classifications
  • Compliance assistance and enforcement processes
  • The process for appealing wage rates, coverage, and compliance determinations

 

Prevailing Wage Seminars for 2017 are being scheduled in the following cities:

  • Pittsburgh, PA – TBD

 

(Read More)

Happy Holidays From The DOL: User-Friendly Webpage On Independent Contractors Misclassification Arrives

Monday, December 19, 2016
Greg Guidry

On December 19, the United States Department of Labor (DOL) issued what it describes as a “user-friendly webpage where workers, employers, and government agencies can find information and resources” about misclassification of workers as independent contractors.

In the announcement about its new educational and resource tool, the DOL states that the misclassification of employees as independent contractors is a “huge problem for workers, employers who play by the rules and our economy.” It also quotes two alleged victims of misclassification, a taxi driver who said he was underpaid and subjected to terrible working conditions akin to “modern day slavery,” and a masonry contractor who said that misclassification “makes for an unfair playing field” that “has to stop.”

In the cover page, the DOL states that it supports the use of legitimate independent contractors, but when employers deliberately misclassify employees as independent contractors in an attempt to cut costs, everyone loses. The DOL then states that “this new resource offers information about how misclassification affects pay, unemployment insurance, safety and health protections, retirement and health benefits, and taxes. It then pleads to the user: “Help us address this problem by learning more.”

(Read More)

(USDOL Misclassification Resource Tool)

Employers Misclassifying Workers Face Joint Federal/State Investigations

Brian J. Hoffman, The Legal Intelligencer
November 22, 2016

Employers have often played “fast and loose” with regulations governing workforce classification, tempted by the significant savings associated with independent contractor treatment. As such, in August 2016, Pennsylvania became the 35th state to reach an agreement with federal authorities to coordinate inquiries and share enforcement data in wage and hour investigations.

The Pennsylvania Department of Labor and Industry (PA DOL) and the United States Department of Labor (“US DOL”) inked a Memorandum of Understanding which serves to facilitate the exchange of information during enforcement actions. Historically, a particular focus of both the US DOL and PA DOL has been the misclassification of employees as independent contractors. Previously, an investigation by the PA DOL or US DOL of an employer would NOT necessarily lead to a reciprocal investigation by the other party. Now, given the execution of the Memorandum of Understanding, employers should expect that a wage and hour investigation by one department will likely lead to an investigation by the other. As such, employers challenged on employment classification practices while under audit will likely see overall liabilities increase during any given inquiry, as both federal and state taxes and penalties will be imposed.

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Wage and Hour Division Final Rule: Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors

Sept. 30, 2016

The Department of Labor has announced that on September 30, 2016, it will publish a final rule to implement Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. Executive Order 13706 was signed by President Barack Obama on September 7, 2015, and requires parties that enter into covered contracts with the Federal Government to provide covered employees with up to 7 days of paid sick leave annually, including paid leave allowing for family care. The final rule describes the categories of contracts and employees covered by the Executive Order; the rules and restrictions regarding the accrual and use of paid sick leave; the obligations of contracting agencies, the Department of Labor, and covered Federal contractors under the Order; and the remedies and enforcement procedures to implement the Order’s requirements.

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Q&A: COLLABORATION IS KEY TO CRACKDOWN ON EMPLOYEE MISCLASSIFICATION

Sep 20, 2016 / by Katherine C. Parris

Employee misclassification causes headaches for both workers and employers, and the federal government and the states are joining hands to ease the pain.

Misclassification often has substantial consequences for all parties involved-employers and workers, as well as the federal government and the states. Misclassifying an employee as an independent contractor may result in denial of minimum wages, overtime compensation, family and medical leave, and unemployment and workplace safety protections. Employers may face costly lawsuits and be liable for unpaid overtime and minimum wages, as well as back pay, court costs and attorneys’ fees.

For these reasons, the Department of Labor is entering into enforcement partnerships with state agencies for “information sharing and coordinated enforcement” in support of its Misclassification Initiative, according to its website.

Joint federal-state efforts likely will continue to play a large role in the future of worker misclassification enforcement as more states enter into formal agreements with the DOL.

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