Department of Labor Proposes Changes to Overtime Salary Level Test
On Thursday, March 7th, the U.S. Department of Labor announced a Notice of Proposed Rulemaking that seeks to update the salary threshold for employees to be exempt from overtime from $455 per week ($23,660 annually) to $679 per week ($35,308 annually). The proposal also seeks to increase the total annual compensation for highly compensated employees from $100,000 to $147,414 per year. Employers are permitted, under the proposed rule, to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level.
The proposed rule does not make any changes to the job duties tests for the common white collar exemptions from overtime pay.
The Department of Labor is also asking for public comment on the NPRMs language for periodic review to update the salary threshold. As proposed, the rule does not call for automatic adjustments to the salary threshold, but it does provide that the salary level should be reviewed every four years.
More information on the proposed rule can be found by clicking here. Public comments on the proposed rule can be submitted electronically by clicking here. The comment period closes 60 days from the date the NPRM was published in the Federal Register. The Notice was published in the Federal Register on March 22, which means comments must be received by May 21 to be considered.
OSHRC Issues Ruling in Heat Stress Case
In a long awaited and vigorously contested case, the Occupational Safety and Review Commission (OSHRC), in a 2-to-1 decision issued on February 28, 2019, vacated an OSHA citation issued to a roofing contractor for allegedly exposing employees "to the hazard of excessive heat from working on a commercial roof in the direct sun."
OSHA had cited the roofing contractor, A. H. Sturgill Roofing, Inc., headquartered in Dayton, Ohio, under the general duty clause of the Occupational Safety & Health Act, after a 60-year old temporary employee with various preexisting medical conditions, collapsed on his first day on the job. The employee, who was assigned to push carts containing roofing debris at the edge of the roof into a dumpster below, collapsed on the roof in the late morning. The employee was rushed to a hospital, diagnosed with heart stroke and passed away three weeks later. The coroner reported that the employee's death was caused by "complications" from heat stroke.
Following a lengthy hearing before an Administrative Law Judge, the citation was initially upheld by the ALJ who concurred with OSHA's contention that the roofing contractor had failed to provide training and develop and implement a heat-related illness prevention program that adequately addressed appropriate clothing for working conditions, a formalized work/rest schedule, worksite monitoring, guidelines for removing employees from hazardous conditions, and acclimatization for new or returning employees.
Because there is no specific OSHA standard governing heat-related hazards, OSHA relies upon the general duty clause of the OSH Act when citing contractors for heat-related hazards. The general duty clause requires employers to furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death of serious physical harm to employees. To prove a violation of the general duty clause, the Secretary of Labor must establish (1) a condition or activity in the workplace presented a hazard; (2) the employer or its industry recognized the hazard; (3) the hazard was causing or likely to cause death or serious physical harm; and (4) a feasible and effective means existed to eliminate or materially reduce the hazard.
The principal issues in the A. H. Sturgill Roofing case were whether weather conditions at the PNC Bank Branch where Sturgill Roofing was working on August 1, 2012 presented an excessive heat hazard and the abatement measures to reduce a heat hazard. A 11-person crew, including three temporary employees, started work at 6:30 a.m., removing an existing EPDM roof and Styrofoam insulation. The temperature was approximately 72
°F with 84 percent relative humidity. At around 11:40 a.m., the temporary employee whose job was to push the debris cart over the edge of the roof, began shaking and collapsed. The ambient temperature at the time was approximately 82°F with 51 percent relative humidity. At the hospital, the collapsed employee's core body temperature was determined to be 105.4°F.
At the initial administrative hearing, the Administrative Law Judge (ALJ) ruled in OSHA's favor and found that Sturgill's employees were exposed to heat-related illness hazards based on the National Weather Service's (NWS) "heat index" chart, medical evidence, and testimony of OSHA's occupational health expert. The NWS Heat Index chart rates the likelihood of heat disorders with prolonged exposure or strenuous activity based on temperature and relative humidity and classifies the risk into four warning levels: caution, extreme caution, danger and extreme danger. Based on testimony from the roofing foreman that it was about 10
° hotter on the roof than on the ground, OSHA argued that the heat index established an excessive heat hazard. The ALJ considered the limited steps that Sturgill Roofing took to abate the heat hazard, which consisted primarily of presenting tool box talks on heat-related issues, providing drinking water on the roof and encouraging employees to take breaks in addition to scheduled breaks, were inadequate and upheld the citation.
Sturgill Roofing appealed ALJ's decision to the 3-member OSHRC, whose members are appointed by the President. The OSHRC invited amicus legal briefs from numerous organizations including NRCA. Oral argument was conducted in June 2018.
In reaching its decision to reverse the ALJ's decision and vacate the citation, the two OSHRC members who formed the majority concluded that OSHA has failed to carry its burden of proving the existence of a hazard and a feasible means of abatement. In its 22-page decision, the OSHRC said that the conditions at the job site were not such that OSHA had proven the existence of a hazard likely to cause death or serious physical harm.
Examining the NWS Heat Advisory Chart which indicates the "likelihood of heat disorders with prolonged exposure or strenuous activity," the majority said that OSHA had not shown that any of the chart's warnings applied to the conditions present on August 1, 2012 because OSHA had not shown either "prolonged exposure" to heat index values that fell within the chart or that the work involved "strenuous activity." The evidence, according to the OSHRC decision, showed that the heat index values were at most in the "caution" range for two of the five hours the crew worked on the day in question. Quoting a 1980 U.S. Supreme Court decision, the OSHRC emphasized that to prove the existence of a hazard within the meaning of the general duty clause, OSHA must do more than show that serious physical harm is a possibility or that there is some degree of risk to employees. OSHA "must show, at a minimum, that employees are exposed to a significant risk of harm."
One of the three OSHRC commissioners issued a 29-page dissenting opinion. The dissenting commissioner felt that OSHA had established all the prerequisites for a general duty clause violation, stating that she agreed with the ALJ's finding that the deceased employee's heat stroke was reliable and persuasive evidence that a heat hazard existed at the work site. She chided the majority for not taking into account the transcribed statement that Sturgill's foreman had given to the OSHA compliance officer that it was about 10
hotter on the roof than on the ground. Based on the foreman' statement, she pointed out that the heat index on the roof would have been in the "extreme caution" zone of the NWS heat index chart.
The two commissioners whose opinion constituted the majority OSHRC decision were appointed by President Trump. The dissenting commissioner was appointed by President Obama. The Secretary of Labor has 60 days to appeal the OSHRC's decision to the federal circuit court of appeals.
Hendrick, Phillips, Salzman & Siegel authored the friend of the court brief submitted on behalf of the National Roofing Contractors Association.
With summer weather approaching, commercial and residential roofing contractors should be sure to provide training to temporary and permanent employees on heat-related hazards and to develop and implement a heat-hazard prevention and safety plan. The heat-hazard training and plan to abate an excessive heat hazard should include (1) loosely worn reflective clothing; (2) a work/rest regimen; (3) providing water and shade; (4) monitoring employees; and (5) an acclimatization protocol. An acclimatization plan allows employees to gradually increase time spent in hot conditions and build up tolerance to working in the heat.
OSHA Issues Temporary Enforcement Guidance for Crane Operator Certification Process
In a previous E-Blast, we discussed the Cranes and Derricks in Construction: Operator Qualifications final rule published by OSHA on November 8, 2018, which requires employers to document their evaluations of crane operators. This rule was made effective on February 7, 2019. On that same day, OSHA also issued temporary guidance stating that, while it will still require employers to evaluate operators before allowing them to use cranes, OSHA plans to provide additional time for employers to document the evaluations.
Now until April 15, 2019, OSHA will evaluate good faith efforts by employers to meet the new documentation requirements, and OSHA will also provide compliance assistance, in lieu of enforcement measures, for employers who have evaluated operators in accordance with the final rule and are still making good faith efforts to comply with the documentation requirements. If, upon inspection, OSHA determines that an employer has not made sufficient efforts to comply with the documentation requirements, OSHA can cite that employer for a deficiency. On April 15, 2019, OSHA will begin to fully enforce all applicable provisions of this final rule.
Employers who must evaluate their crane operators under the final rule should begin to take steps toward meeting the documentation requirements by the April 15, 2019 due date. If you have any questions about OSHA's crane operator final rule, please contact William Burnett or Philip Siegel. You can reach William Burnett directly at (404) 469-9183 or e-mail him by clicking
. You can reach Philip Siegel directly at (404) 469-9197 or e-mail him by clicking
NLRB Revises Independent Contractor Test
In late January, the NLRB issued its decision in the SuperShuttle DWI, Inc. case dealing with classification of workers under the National Labor Relations Act. The Board held that SuperShuttle DFW's shuttle drivers were independent contractors, meaning they had no right to organize and be represented collectively by a union. In reaching its decision, the Board overturned a 2014 case involving delivery drivers which had ruled that those drivers were employees entitled to organize.
In SuperShuttle, the company had entered into agreements with individual shuttle drivers which required various fees to be paid by the drivers to allow access to the airports. In addition, the drivers were required to purchase or lease their own vehicle and use SuperShuttle DFW's dispatch and reservation system to bid on passenger routes. Drivers kept all fares paid by the passengers (although SuperShuttle DFW set the fare rates) and the drivers worked as little or as much as they wanted and decided which passengers to pick up, without a schedule being set by SuperShuttle DFW. Drivers were required to comply with airport guidelines and policies concerning conduct and behavior. When a local union tried to organize the drivers, SuperShuttle DFW objected by arguing that the drivers were not employees, but instead were independent contractors.
In its decision, the Board emphasized that previous cases had improperly limited the scope of the "entrepreneurial opportunity for gain or loss" as a factor in making the classification decision. The Board stated that "entrepreneurial opportunity, like employer control, is a principle by which to evaluate the overall effect of the common law factors on a putative contractor's independence to pursue economic gain." As a result, entrepreneurial opportunity can become a deciding factor in appropriate cases.
Under the analysis, the Board found that the drivers were independent contractors who did not have the right to organize and be represented by a union. SuperShuttle DFW had little control over drivers based on the freedom to set their own schedules, decide where to work, and select passengers. The drivers kept all the fares and paid for their own vehicles. As a result, the drivers had "significant entrepreneurial opportunity" and essentially were each running their own business and not working for SuperShuttle DFW.
This case marks a significant shift at the NLRB with respect to classification of employees and independent contractors. Note, however, that this analysis is limited to the NLRA context - this decision has no effect on IRS or Department of Labor classification tests. However, it is a further significant indication of the policy shift at the NLRB under the current administration.
Please contact Scott Calhoun by phone at 404-469-9195, or you can e-mail him by clicking here, if you have further questions about the SuperShuttle DFW case or the classification of employees or independent contractors.
H-2B Cap Reached for Fiscal Year 2019
U.S. Citizenship and Immigration Services (USCIS) has received a sufficient number of H-2B petitions to meet the Congressionally-mandated H-2B cap for the second half of fiscal year (FY) 2019. According to USCIS, February 19, 2019 was the final receipt date for H-2B worker petitions with an employment start date before October 1, 2019. Now, USCIS will reject any new H-2B petitions subject to the cap that request an employment start date before October 1, 2019.
The number of cap-subject petitions received by February 19, 2019 exceeded the number of remaining visas available for the second half of FY 2019. In response and in accordance with regulations, USCIS used a computer-generated lottery to ensure a fair allocation of H-2B petitions to meet, but not exceed, the remainder of the FY 2019 cap. USCIS conducted a lottery on February 21, 2019 to randomly select petitions from those received by February 19, 2019. All lottery-selected petitions were assigned the receipt date of February 22, 2019, and premium processing for the lottery-selected petitions began on that date as well.
USCIS will continue to accept H-2B petitions that are exempt from the cap, which include, but are not limited to, petitions for current H-2B workers in the U.S. seeking to extend their stay and, if applicable, change the terms of their employment or employers.
Congress has currently set the H-2B cap at 66,000 petitions per fiscal year, with 33,000 workers who can begin employment in the first half of the fiscal year (from October 1st to March 31st) and 33,000 workers who can begin employment in the second half of the fiscal year (from April 1st to September 30). The second half fiscal year allotment can also include any unused petitions from the first half of the fiscal year. However, unused H-2B petitions do not carry over from one fiscal year to the next.
If you have any questions about the H-2B program or the H-2B cap, please contact William Burnett directly at (404) 469-9183 or e-mail him by clicking
OSHA Seeking Consent to Conduct Inspections by Drone
Do not be surprised if you get a phone call or other communication from your local area office asking if you will consent to an inspection of your jobsite by a drone. In a memo published last year, which can be accessed by clicking here, OSHA formalized its use of drones for inspection activities, ordering each of the agency's 10 regions to designate a staff member as an unmanned aircraft program manager to oversee training requirements and evaluate reports submitted by drone teams.
For now, OSHA is seeking the employer's express consent before conducting an inspection by drone. But OSHA is seeking the option of obtaining a Blanket Public Certificate of Waiver or Authorization from the Federal Aviation Administration to operate drones nationwide. If the Blanket Public Certificate of Waiver or Authorization is granted, OSHA may do away with seeking employers' consent for a drone inspection.
If you are contacted by OSHA and asked to consent to an inspection by drone, be sure to consult with your legal counsel. While, generally, the advice is to consent to an OSHA inspection if you can reach an agreement on the scope of the inspection, rather than make OSHA obtain a search warrant, the prospect of an inspection by drone raises new issues not present in a typical walk-around inspection.
Deadline for Submission of EEO-1 Data Extended to May 31, 2019
Because of the government shutdown earlier this year, the opening of the EEO-1 was postponed until earlier this month. As a result, the deadline for submitting EEO-1 data has been extended until May 31, 2019.
The EEO-1 is an annual survey that requires all private employers with 100 or more employees and federal government contractors or first-tier subcontractors with 50 or more employees and a federal contract, subcontract or purchase order amounting to $50,000 or more to file the EEO-1 report.
Additional information is available on the EEO-1 website, which can be accessed by clicking here.