March 2019 Government Update

DOL Releases Proposal Updating Overtime Eligibility

On March 7, the Department of Labor (DOL) released a proposed update on the rule “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.” The proposal updates overtime eligibility requirements for employees. As a reminder, to be exempt from overtime requirements under the Fair Labor Standards Act (FLSA), employees must generally be paid on a salary basis at or above a specified minimum weekly salary level and meet certain requirements related to their primary job duties.

BSCAI is a member of the Partnership to Protect Workplace Opportunity (PPWO), a broad coalition that supports changes to overtime eligibility that addresses the concerns of both employers and employees. The proposed regulation includes many of the recommendations that PPWO offered during the 2017 Request for Information and failed 2014 rulemaking. Key provisions of the proposal include the following:

• Salary Threshold – Raises the threshold to $35,308 annually ($679 per week) by reverting to the methodology used in the 2004 rule that focused on the 20th percentile of full-time wage earners in the lowest income region of the company (identified as the South Census Region), as well as the retail industry.
• Future Salary Updates – Does not implement automatic updates, but the proposal seeks comment on conducting regularly scheduled rulemakings to update the salary threshold consistent with the methodology used in the proposal.
• Duties Test – Importantly, the proposal makes no changes to the rule’s duties tests. NLBMDA in previous comments has supported not changing the duties tests.
• Salary Test – Allows nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary test requirement.
• Highly Compensated Employees – Increases the total annual compensation requirement for “highly compensated employees” (HCE) from the currently enforced level of $100,000 to $147,414 per year, which is higher than the Obama-era proposed threshold of $134,004. DOL maintains the methodology used by the Obama Administration for this salary level that resulted in the higher threshold.

White House Proposes Fiscal Year 2020 Budget

On March 11, the Trump Administration released its Fiscal Year (FY) 2020 budget proposal that includes the executive branch’s tax and spending priorities for the next decade. Overall, the president’s budget is estimated to cost $4.7 trillion in FY 2020.

It is important to remember that the president’s budget is only one-step in the annual budget process. Moreover, the proposal is often viewed as a political document and not one focused strictly on federal policies.

The House and Senate Appropriations Committees are already holding subcommittee hearings concerning the 12 annual appropriations bills. It is unlikely that Congress will pass a budget resolution for FY 2020 with Democrats controlling the House and Republicans controlling the Senate.

Two issues that will likely make it more difficult to reach an agreement on FY 2020 spending bills are 1) the need to increase the federal debt ceiling and 2) spending caps on discretionary programs in place for FY 2020 and 2021.

The debt ceiling was reached in early March and the federal government has begun a series of “extraordinary measures” to stay below the $22 trillion debt limit. According to the Congressional Budget Office (CBO), the U.S. Treasury will run out of money to pay the country’s expenses by the end of September—near the beginning of FY 2020.

Democrats are interested in lifting the spending caps on discretionary programs, while Republicans would like the spending caps lifted for defense programs, but overall want to pare back on spending following spending hikes during President Trump’s first two years in office. That means another budget showdown could be looming in September that puts federal housing programs at risk.

Federal Court Reinstates EEOC Pay Data Reporting Requirement

On March 4, the U.S. District Court for the District of Columbia reinstated a requirement that employers who must submit an annual Employer Information Report EEO-1 (EEO-1 Report) will be required to report their employees’ pay data to the Equal Employment Opportunity Commission (EEOC). The timing of the court’s decision is controversial with the opening date for employers to begin to file their 2018 EEO-1 Reports only weeks away.

The EEO-1 Report requires employers to submit employment data to the EEOC categorized by race/ethnicity, gender, and job category. All companies with 100 or more employees or companies with 50 or more employees and a government contract amounting to $50,000 or more are subject to the EEO-1 reporting requirements

The current 2018 EEO-1 reporting deadline, that excludes pay and hours worked data, is May 31, 2019. The White House Office of Management and Budget (OMB) is expected to appeal the decision and issue revised reporting guidelines. Employers required to file an EEO-1 Report should make sure they are collecting relevant employee pay data to ensure compliance.

DOL Issues Opinion Letter for Residential Janitors

The Department of Labor’s (DOL) Wage and Hour Division (WHD) issued an opinion letter on March 14 concerning whether the Fair Labor Standards Act (FLSA) guarantees minimum wage and overtime pay to residential janitors despite potentially applicable exemptions from similar state law requirements, and whether an employer that relies on state law exemptions would have a “good-faith” defense to imposition of liquidated damages or three years of back wages liability.

WHD concluded that the FLSA minimum wage and overtime requirements do apply to residential janitors, because the FLSA contains no exemption for residential janitors. The Department went even further stating that it “does not believe that relying on a state law exemption from state law minimum wage and overtime requirements is a good faith defense to noncompliance with the FLSA, but a court retains discretion to make that determination on a case-by-case basis.”

March is National Ladder Safety Month

March is National Ladder Safety Month, which is the only movement dedicated exclusively to the promotion of ladder safety. Each year building service contractors are fined by the U.S. Occupational Safety and Health Administration (OSHA) for not taking proper ladder precautions.

The public awareness campaign promotes ladder safety through the provision of multiple helpful resources that everyone can share and utilize - for free. The goal of the awareness month is to draw attention to the dangers of improper ladder use and how easily ladder-related injuries and death can be prevented with simple, straightforward training.

Sen. Grassley and Wyden Introduce Legislation Extending Expired Tax Incentives

The Chairman and Ranking member of the Senate Finance Committee, Sens. Charles Grassley (R-IA) and Ron Wyden (D-OR) respectively, having introduced legislation (S. 617) to retroactively extend tax provisions that expired at the end of 2017 and 2018 through the balance of this year and provide disaster tax relief benefits to individuals and businesses affected by major disasters occurring in 2018. Sens. Grassley and Wyden have urged passage of the legislation with the 2018 tax filing season underway.