Thursday, April 29, 2010

Wage-Hour Division webchat focuses on rulemaking initiative to beef up recordkeeping requirements, revise companionship services regs

The Wage and Hour Division held a webchat this morning on its recently published spring 2010 regulatory agenda. Nancy Leppink, Wage and Hour deputy administrator, fielded questions from webchat participants on the DOL’s coming plan to beef up FLSA recordkeeping requirements and on pending rulemaking on the companionship services exemption.

Recordkeeping rules. DOL is considering a proposed rule that would revamp current FLSA recordkeeping regulations to require employers to notify workers of their rights under the FLSA, and to provide information regarding hours worked and wage computation. Employers that seek to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain the analysis to give to WHD enforcement personnel who might request it. The current recordkeeping regulations require covered employers to keep specified payroll records and other information, the agency noted, but they do not require that such information be disclosed to the worker. The proposal will also address burdens of proof when employers fail to comply with records and notice requirements.

The likely content of the recordkeeping proposals sparked the greatest interest. The questions offered a telling glimpse of the issues the DOL will be grappling with as it formulates a rule, as well as the input it will no doubt receive during the comment period. Among the questions posed:

  • Do you intend to exempt any industries from the FLSA classification analysis and enhanced recordkeeping requirements?
  • Classification analysis is generally conducted on a position-by-position basis, so when an incumbent leaves a position and a new hire occurs, what will the obligation be to re-analyze the position when the position is filled with a new hire?
  • What are the proposed retention requirements for classification analysis in light of the Lilly Ledbetter Act?
  • Will employers be required under the new recordkeeping requirements to inform employees of their exempt status?
  • Would the notice requirements entail a new posting or some type of mandatory training?
  • Would we need to formally notify each employee of [his or her] FLSA status and how it was determined?
  • What information will be required for notices provided to independent contractors? Is the scope of this proposed rule limited to independent contractors or does it include every employee designated as exempt by his/her employer?
  • Can you share what the proposed burdens of proof might be?
In response to a question whether the rulemaking would likely include changes to recordkeeping requirements “associated with employer credits for things like lodging and meals,” Leppink stated, “We are considering what information employers ought to disclose information regarding wage computations.”

Leppink otherwise declined to offer substantive responses to the queries, noting that the rule is currently under development and that “we have not yet determined exactly what will be proposed.” However, she did offer, in general terms: “Our regulatory agenda includes updating recordkeeping requirements. We expect this update to promote transparency and encourage greater levels of compliance by employers. We also expect the regulation to enhance awareness among workers of their status as employees or independent contractors, as well as enhance awareness of employee rights, and entitlements to minimum wage and overtime pay.” The agency’s time table is to publish the proposed regulation in August.

Companionship services. DOL also intends to update its companionship services regulations in order to clarify when domestic service employees are exempt from the minimum wage and overtime provisions of the FLSA. At issue is whether the current exemption for companions working for a third-party agency needs revision in light of significant changes in the home care industry. DOL also intends to address the scope of training required to render a worker “trained personnel” excluded from the companionship exemption, and the amount of household work that may be performed by the worker without losing the companionship exemption.

The regulations governing this exemption have remained largely unchanged since they were promulgated in 1975, the agency notes, in its fact sheet on the proposed rulemaking. “We intend to consider whether the scope of the companionship exemption as currently defined in the regulations continues to be appropriate in light of substantial changes in the home care industry over the last 35 years,” Leppink said. The DOL expects the companionship notice of proposed rulemaking to be published in October 2011.

Ambitious agenda? “Is the current agenda typical or is it more ambitious than prior years?” asked one participant. “While we cannot compare this agenda with previous ones, we do intend to vigorously pursue those regulatory changes that can best protect workers,” said Leppink in response. “We believe our regulatory agenda will advance the Secretary's goal of good jobs for everyone. We seek to advance openness and transparency, and help prevent violations before they occur.”

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