Government Affairs

February 2019 Government Update

BSCAI Signs on to Coalition Comments on Revising the Joint Employer Standard

BSCAI signed on to comments from the Coalition for a Democratic Workplace in response to the National Labor Relations Board’s (NLRB) Notice for Proposed Rulemaking (NPRM) containing proposed changes to the joint-employer standard under the National Labor Relations Act (NLRA). The comments were submitted on January 28 and follows a federal Appeals Court panel ruling in December 2018 against an Obama-era rule that broadened the definition of joint employer liability.

The NLRB’s proposal adopts the long-accepted, practical requirement that the NLRB will find a joint employment relationship under the NLRA where a business or other entity actually exercises control over the essential terms and conditions of another employer’s employees. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship. NLRB is expected to return to the traditional standard for joint employer liability later this year.

Deviating from the long-held standard for joint employer liability, in 2015, the NLRB under President Obama broadened the definition of what constitutes a joint employment relationship. In the case involving Browning-Ferris Industries (Browning-Ferris), the Board decided that a joint employment relationship could exist even when companies have “indirect or unexercised control” over workers.

Building service contractors have had to deal with the additional risk created by the Obama-era rule. Although the Trump-era NLRB is looking to return to a traditional standard for joint employer liability, until those changes take effect employers should bear in mind that there is uncertainty regarding the rule.

Click here to read the coalition’s comments to the NLRB.

OSHA Issues Final Rule on injury and Illness Reporting

The U.S. Occupational Safety and Health Administration (OSHA) has issued a final rule that eliminates the requirement for businesses with 250 or more employees to electronically submit information for OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 301 (Injury and Illness Incident Report) to the Agency each year. OSHA states that the final rule will allow the Agency to improve enforcement targeting and compliance assistance, protect worker privacy and safety, and decrease burden on employers. The rule takes effect on February 25, 2019.

Businesses with 250 or more employees, as well as businesses with 20 to 249 employees in designated high-risk industries, must still submit information from OSHA Form 300A (Summary of Work-Related Injuries and Illnesses). Please note that “services to buildings and dwellings” is classified as a high-risk industry and subject to the stricter reporting requirements for OSHA Form 300A. The deadline for electronic submission of OSHA Form 300A for calendar year 2018 is March 2, 2019.

By no longer requiring submission of OSHA Forms 300 and 301, it greatly reduces employer concerns about employee privacy and identity. However, employers are still required to maintain these forms on-site as well as submit them on an as-needed basis during inspections and enforcement actions. For more information on current injury and illness reporting requirements, click here.

NLRB Returns to Traditional Independent Contractor Standard

The National Labor Relations Board (NLRB) has returned to a traditional standard for determining independent contractor status versus employee status. In doing so, the Board has clarified the role that “entrepreneurial opportunity” has in evaluating whether someone is an independent contractor. The decision is a return to the standard used prior to 2014 that weighed 10 factors equally in determining independent contractor status.

The decision overrules a 2014 NLRB decision, which modified the applicable test for determining independent contractor status by severely limiting the significance of a worker’s “entrepreneurial opportunity” for economic gain.

Listed below are the 10 factors the NLRB uses in determining independent contractors status. Keep in mind that no one factor is decisive in evaluating independent contractor classification. Each of the 10 factors must be assessed and weighed.

  1. Extent of control by the employer.
  2. Whether or not the individual is engaged in a distinct occupation or business.
  3. Whether the work is usually done under the direction of the employer or by a specialist without supervision.
  4. Skill required in the occupation.
  5. Whether the employer or individual supplies instrumentalities, tools, and place of work.
  6. Length of time for which individual is employed.
  7. Method of payment.
  8. Whether or not work is part of the regular business of the employer.
  9. Whether or not the parties believe they are creating an independent contractor relationship.
  10. Whether the principal is or is not in the business.

Companies should take a renewed look at their business relationships in light of the recent NLRB decision in order to ensure compliance. Start by reviewing business relationships under the 10-part test. Do not rely solely on method of payment (compensation via W-2 vs 1099) or common industry practice, as it may not be sufficient for determining whether a service provider is an independent contractor.

Second Government Shutdown Averted Following New Spending Agreement

President Donald Trump signed a spending agreement on Friday, February 15, that avoids another government shutdown. All federal departments and agencies are now funded through September 30. Signing of the omnibus spending bill allows Congress to move past the disagreement regarding funding for the wall along the U.S. – Mexico Border.

The spending agreement includes $1.375 billion for the construction of 55 miles of border fencing along the southern border. Trump has also made an emergency declaration to divert an additional $6.7 billion from other government programs to fund border wall construction. The president’s decision would give the White House a total of $8 billion for border wall; however, it is unclear if Trump’s emergency declaration will survive a court challenge.

OSHA Provides Compliance Assistance to Protect Workers from Falls

The Occupational Safety and Health Administration (OSHA) has developed a collection of compliance assistance resources to address falls in the workplace, which is particularly relevant to the building services industry given that among the top five citations for 2018 were related to fixed ladders (1910.27) and scaffolding (1910.28). OSHA’s goal is to promote awareness about common fall hazards, educate employers and workers on fall prevention, and reduce the number of fall-related injuries and fatalities. These resources, which continue the goals of the Department’s Office of Compliance Initiatives (OCI), encourage and facilitate compliance evaluations.

The compliance assistance resources include the following:

  • OSHA’s Fall Prevention Training Guide provides a lesson plan for employers including several Toolbox Talks;
  • Fact sheets on ladders and scaffolding provide guidance on the safe use of these types of equipment while performing construction activities; and,
  • A brief video, 5 Ways to Prevent Workplace Falls, encourages employers to develop a fall prevention plan, and to provide workers with fall protection and training.

Six Senators Sign on as Cosponsors to HIT Delay Bill

Sens. Tom Cotton (R-AR), Kevin Cramer (R-ND), Ted Cruz (R-TX), Maggie Hassan (D-NH), Jim Inhofe (R-OK), and Rob Portman have signed on as cosponsors to provide a two-year delay of the Health Insurance Tax (HIT) that was created as part of the Affordable Care Act (ACA). The HIT is levied against companies offering fully insured plans that is then passed on to employers and employees in the form of higher premiums. Sen. Cory Gardner (R-CO) introduced the bipartisan legislation last month.

A companion version of the legislation is expected to be introduced soon in the House of Representatives. The sticking point regarding introduction surrounds which lawmaker will serve as the lead Republican on the bill. Congressman Ami Bera (D-CA) is expected to be the lead Democrat on the House bill.

The HIT is suspended for 2019 but is set to return in 2020 unless there is congressional action extending the moratorium. According to America’s Health Insurance Plans (AHIP), if implemented in 2020, the HIT would levy $16 billion in fees on health insurance, including increases of $479 per family in the small-group market and $458 in the large-group market.

DOL Releases New FLSA Reference Tool

The Department of Labor (DOL) has announced the launch of an enhanced electronic version of the Handy Reference Guide to the Fair Labor Standards Act (FLSA). This new online version of one of the Wage and Hour Division’s (WHD) most popular publications is intended to assist employers and workers with an easy-to-follow resource that provides basic WHD information, as well as links to other resources.

WHD established the electronic guide as part of its ongoing efforts to modernize compliance assistance materials for employers and workers, and to provide easily accessible, plain-language information that will guide them to compliance. The reference guide gives access to materials employers frequently need, and allows users to tailor their experience by exploring available information at whatever level of detail they choose. This tool, in conjunction with worker.gov, employer.gov, and other recently released online tools, is meant to ensure greater understanding of federal labor laws and regulations.