OMB to Withhold Funding from the NLRB

While General Counsel Peter Robb seeks to reorganize and rein in the agency’s regional directors, the National Labor Relations Board (NLRB) has been told not to spend money past April by the Office of Management and Budget (OMB).

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Peter Robb, new NLRB General Counsel

“The agency heads are claiming that OMB told them” the labor board “can’t spend past April” because the White House and some Republican lawmakers are considering trying to rescind part of the board’s funding, one source told Bloomberg Law on the condition of anonymity.

The White House has authority to withhold any agency’s funding for up to 45 days, but after that, the funds must be dispersed unless the Senate passes a rescission bill, which requires only a majority vote.

Lawmakers basically ignored all the agency cuts in the proposed budget issued by the Trump administration, and when the FY 2018 budget passed on March 23, almost no federal agency had to take a fiscal haircut. Now the OMB and the White House are working with Senate Republicans on a rescission bill to claw back part of that massive $1.3 trillion budget.

As for Robb, the counsel is considering stripping the board’s regional directors of some of their authority and revamping board investigations to speed the regulatory process.

Over at the Department of Labor (DOL), Secretary Alexander Acosta testified before Congress that he is “in discussion with OMB around a potential rescission.” The DOL received a $192-million increase for 2018 with a total outlay of $12.2 billion.

NLRB funding for 2018 currently stands at $274 million.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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SEC Votes on Its Own Proposed Fiduciary Rule

The Securities and Exchange Commission (SEC) on Wednesday, April 18, voted 4-1 on a proposed fiduciary rule that sets standards of conduct, additional disclosure requirements and restrictions on advisor/broker titles. The vote comes a month after the U.S. 5th Circuit Court of Appeals struck down a hotly contested fiduciary rule by the Department of Labor (DOL) that was already in effect but on hold until this July 1.

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SEC Chairman Jay Clayton

Eight years ago, Congress authorized the SEC to establish such a rule, but the DOL beat them to the punch with its 2016 standard.

In a statement released after the vote, the SEC explained:

Under proposed Regulation Best Interest, a broker-dealer would be required to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer.  Regulation Best Interest is designed to make it clear that a broker-dealer may not put its financial interests ahead of the interests of a retail customer in making recommendations.

“The framework of our proposal is straightforward,” SEC Chairman Jay Clayton said at Wednesday’s meeting. “It reflects a multi-pronged effort to fill the gaps between investor expectations and legal requirements, thereby increasing investor protection, and the quality of advice, while preserving investor access and investor choice, recognizing that access and choice are driven by what is available and how much it costs.”

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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IRS Issues FAQs on Paid FMLA Leave

The Tax Cuts and Jobs Act of 2017 opened a two-year window, from Jan. 1 this year to Dec. 31, 2019, for qualifying companies to receive a tax credit if they offer paid Family and Medical Leave Act (FMLA) time off. This month the IRS issued a set of FAQs to help explain how the credit works.

IRS-releases-paid-fmla-leave-faqsTo qualify for the credit, a company must have a written leave policy in place offering at least two weeks of paid family leave annually, paying at least 50 percent of the leave-taker’s normal wages. To qualify for the credit, an employee must have worked for the company for at least one year, earn less than $72,000 a year, and take at least two weeks of such leave. The credit is not available in states and municipalities where paid leave is mandated by law.

The credit rises from 12.5 percent of wages paid, if those wages are at 50 percent, to 25 percent if the employer pays full normal wages during the leave period.

Reasons that qualify for family and medical leave: (more…)


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Tesla Being Investigated by Cal/OSHA

California’s Occupational Safety and Health Administration (Cal/OSHA) is investigating the Tesla car plant in Fremont, Calif., for failure to promptly report on-site injuries, following a report by investigative website Reveal.

tesla-being-investigated-for-safety-violations-by-cal/oshaUnder both California and federal safety laws and regulations, companies have eight hours to report any injury involving hospitalization overnight or loss of a body part. Also at issue is a reported paint shop fire at the plant that Tesla failed to report and now claims was minor.

Tesla produces electric cars that have garnered international attention, but of late the firm has come under suspicion for a variety of reasons, including alleged financial problems. Elon Musk, the founder, even joked about bankruptcy recently.

Cal/OSHA is a state-compliant safety and health agency approved by federal OSHA. In announcing the Tesla investigation, Cal/OSHA released this statement: (more…)


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Starbucks to Hold Racial Bias Training Day Following Philadelphia Incident

After the manager at a Starbucks in Philadelphia had two black men arrested for trespassing when they asked to use the restroom without purchasing anything, the company announced it will close all 8,000 of its corporate locations on May 29 for a racial bias training session. Starbucks employs some 175,000 people at these locations.

starbucks-to-hold-racial-bias-trainingThe incident in the City of Brotherly Love on April 12 gained national notoriety when the female manager called police, saying the two men were trespassing after she told them the restroom was for paying customers only. After being so informed, the two sat at a table without ordering anything until police arrived and arrested them. The incident was videoed and placed online. Protests ensued at the location for the next couple of days.

Two days after the arrests, Starbucks issued a formal apology, and the CEO, Kevin Johnson, even flew from Seattle to meet with the two men to offer his apology.

“I’ve spent the last few days in Philadelphia with my leadership team listening to the community, learning what we did wrong and the steps we need to take to fix it,” Starbucks CEO Johnson said in a statement announcing the afternoon of meetings. “While this is not limited to Starbucks, we’re committed to being a part of the solution. Closing our stores for racial bias training is just one step in a journey that requires dedication from every level of our company and partnerships in our local communities.”

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Ignorance of OSHA Regulations Is No Defense, Circuit Court Rules

An Occupational Safety and Health Administration (OSHA) fine for “willful violation” of a regulation will stand, the 11th U.S. Circuit Court has ruled, declaring that ignorance of a regulation is no defense.

court-rules-ignorance-is-no-excuse-for-osha-violationAs a result, the $49,000 fine against Georgia-based Martin Mechanical Contractors will go forward.

The company had argued that the violation could not have been willful since the on-site supervisor was unaware of the regulation in question. The court, however, succinctly ruled that Martin Mechanical Contractors would not be allowed “to use its ineffective training as a defense against OSHA’s most serious charge.”

The violation stemmed from the fatality of a Martin Mechanical HVAC installer who fell through an uninstalled skylight opening 15 feet to his death.

The  employees on the site did not wear fall-arrest systems, even though Martin Mechanical’s foreman had them in his truck. When OSHA issued the fine, company officials argued that it could not have been willful since the foreman was unaware of the fall-arrest system regulation. After an administrative law judge upheld the fine, Martin Mechanical appealed to the 11th Circuit Court.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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States Move to Fill in the Voids in Trumpcare

The Affordable Care Act (ACA, aka Obamacare) is still the law of the land, but the Trump administration has modified so many of its provisions — including the elimination of a tax penalty for not having health insurance — that the remaining parts of the ACA are forcing some states, and even citizen initiatives, to come up with legal remedies to what could be called Trumpcare.

states-move-to-augment-trumpcareNew Jersey has already passed legislation to institute its own individual mandate — be covered or pay a penalty — along with additional legislation to create a reinsurance pool to cover any catastrophic health-related expenses of its citizens.

Now, the District of Columbia is following suit to pass similar legislation, but unlike the Garden State’s plan, the D.C. law would exempt people below a certain income threshold. Connecticut, Hawaii and Vermont are eyeing similar legislation.

Vermont’s plan might go even a step further by instituting a health care auto-enrollment process. Ohio, however, is going the exact opposite direction by petitioning the Department of Health and Human Services (HHS) to eliminate the individual mandate entirely in the state.

There’s movement on the Medicaid expansion front as well.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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DOL: Repeated Short Rest Breaks Are Not Compensable Under the FLSA

In one of three opinion letters recently published by the Department of Labor (DOL), the agency addressed the issue of whether short rest breaks — in this case, taken for 15 minutes every hour for a serious health condition — are compensable under the Fair Labor Standards Act (FLSA) and concluded that they are not.

dol-reissues-flsa-opinion-lettersIn offering this opinion, the DOL, citing Supreme Court decisions, drew a distinction between breaks that benefit the employer and breaks that benefit the employee.

The breaks would be covered by the Family and Medical Leave Act (FMLA), if the company employs 50 or more people in a 75-mile radius, but FMLA leave is non-compensable. As the letter states, ” An employee may take FMLA leave in periods of weeks, days, hours, or even less than an hour. ”

The letter further explains in length:

Short rest breaks up to 20 minutes in length ‘primarily benefit the employer.’ Sec’y of Labor v. Am. Future Sys., Inc., 873 F.3d 420, 430 (3d Cir. 2017); see also 29 C.F.R. § 785.18 (short breaks ‘promote the efficiency of the employee’); Naylor v. Securiguard, Inc., 801 F.3d 501, 505 (5th Cir. 2015) (short breaks are ‘deemed to predominantly benefit the employer by giving the company a reenergized employee’). Thus, consistent with the Supreme Court’s decision in Armour, rest breaks up to 20 minutes in length are ordinarily compensable. 29 C.F.R. § 785.18. In limited circumstances, however, short rest breaks primarily benefit the employee and therefore are not compensable. As relevant to the issues in this letter, for example, the court in Spiteri v. AT&T Holdings, Inc., 40 F. Supp. 3d 869 (E.D. Mich. 2014), confirmed that an employee was not entitled to compensation for frequent ‘accommodation breaks’ (that is, breaks to accommodate the employee’s back pain) that predominantly benefited the employee. Id. at 879. The court noted that 29 C.F.R. § 785.18 does not entitle ‘an employee to take an unlimited number of personal rest breaks during the day and be compensated for all such breaks, as long as they are less than 20 minutes in duration.’

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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EBSA Increases Retirement Fund Recovery on Fewer Cases

The Employee Benefit Security Administration (EBSA) in 2017 upped its recovery of missing employee retirement contributions (including fines) to $1.1 billion from $777.5 the year before.

ebsa-increases-recovery-of-retirement-fundsAt the same time, due in great part to automation, the ERISA-enforcement wing of the Department of Labor (DOL) was able to reach the  higher recovery figure on fewer closed cases: 1,707 in 2017 compared to 2,002 in 2016. EBSA reached a peak of 3,928 civil cases closed in 2014.

The automation came about through the use of algorithms to sort through filed Forms 5500, the yearly report companies must make on their benefits programs.

Another factor in the improved recovery amount was an increase in fines that took place in August 2016. Failure to furnish a statement of benefits to employees increased from $11 to $28 per employee. The fine for failing to file Form 5500 went from $1,100 per day to $2,063. Some 14 other fines were also increased.

Of the 2017 $1.1 billion recovery figure, $682.3 million was recovered from enforcement actions; $418.7 million came from what DOL calls “informal complaint resolution”; $27.9 million was part of EBSA’s Abandoned Plan Program; and $10 million came from EBSA’s Voluntary Fiduciary Correction Program, which allows employers to avoid ERISA penalties if they comply with regulators.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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New Jersey Votes to Resurrect the Obamacare Individual Mandate

The New Jersey legislature has sent a bill to Gov. Phil Murphy, a Democrat, that would reinstate the expiring individual health insurance mandate of the Affordable Care Act (ACA, or Obamacare).

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New Jersey Statehouse

Under terms of the bill — New Jersey Health Insurance Market Preservation Act — those who lack health insurance would be subject to a fine of 2.5 percent of their household income or $695 per adult and $347 per children, whichever is greater. The individual mandate of the ACA expires in 2019 after Republicans in Congress eliminated all monetary penalties associated with it as part of their tax reform package.

Money collected from those without insurance would be deposited in the New Jersey Health Insurance Premium Security Fund, which would be created by a second bill. The fund would be used to cover catastrophic health insurance claims to help keep the lid on insurance premiums.

New Jersey would thus join Massachusetts as the only states with individual mandates. Massachusetts’ mandate is associated with the state’s health care system known as Romneycare, which was largely the model for Obamacare.

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NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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