Category: Department of Labor

DOL Issues Report on Coercive Contractual Provisions
by CUPA-HR | October 22, 2024

On October 17, the Department of Labor’s (DOL) Office of the Solicitor (SOL) issued a Special Enforcement Report on “coercive contractual provisions.” The report lists several provisions they have seen included in employment contracts that the department believes “may discourage workers from exercising their rights under worker protection laws.” The report demonstrates recent actions taken by SOL to combat such provisions, but it does not include new enforcement actions against employers that use these provisions.

In the report, SOL claims the provisions discussed are coercive, violate the law and have significant impacts on the most vulnerable workers. The report details seven types of contractual provisions they find especially concerning:

Contractual provisions requiring workers to waive statutory protections, including those requiring workers to waive their rights to bring claims and recover damages under the Fair Labor Standards Act

Contractual provisions that purport to require employees to agree that they are independent contractors

Indemnification-type provisions and related counterclaims purporting to shift liability for legal violations to workers or other entities

“Loser pays” provisions attempting to require employees to pay the employer’s attorney’s fees and costs if the employees do not prevail in litigation or arbitration

“Stay or pay” provisions, including some training repayment assistance provisions, that purport to require workers to pay damages to their employer for leaving a contract early

Confidentiality, non-disclosure and non-disparagement provisions

Company policies that purport to require workers to report safety concerns to their employer before contacting any government agencies

The report emphasizes that the Department of Labor is “not bound by private contracts or arbitration agreements between workers and employers” and thus “has a unique role to play in fighting the use of these ‘fine print’ or ‘coercive’ contractual provisions.” It provides examples of cases where the courts have found such agreements unenforceable or where DOL has pursued an injunction in federal court seeking an order blocking one or more contract provisions.

Importantly, the report is largely a restatement of current law and, for the most part, does not outline new enforcement actions against employers for using these provisions. Instead, the report outlines the work SOL has done recently to fight against the coercive contractual provisions, including cases and amicus briefs filed against employers using such business practices.

CUPA-HR will continue to monitor for additional resources from the Department of Labor that may impact contractual labor provisions.

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October 22, 2024
Department of Labor Issues Independent Contractor Final Rule – CUPA-HR
by CUPA-HR | January 11, 2024

On January 10, the Department of Labor’s (DOL) Wage and Hour Division (WHD) published the highly anticipated rule modifying the test for determining whether a worker is an employee or independent contractor under the Fair Labor Standards Act (FLSA). The final rule rescinds the current “core factors” method for determining independent contractor status under the FLSA and implements a return to a “totality-of-the-circumstance analysis.”

Under the final rule, the method of determining worker classification will use a totality-of-the-circumstance analysis of multiple factors in an economic reality test, including the following six factors.

The extent to which the work is integral to the employer’s business.

The worker’s opportunity for profit or loss depending on managerial skill.

The investments made by the worker and the employer.

The worker’s use of skill and initiative.

The permanency of the work relationship.

The degree of control exercised or retained by the employer.

Under the final rule, any particular factor could be determinative in establishing a worker’s classification, and additional undefined factors may be relevant in the analysis as well. The final rule is therefore a significant departure from the previous rule finalized in 2021, under which two core factors primarily guided worker classification determinations.

The WHD has established March 11, 2024, as the effective date of this new rule, meaning institutions will need to be in compliance by then. The rule is likely to be challenged in federal court by business groups, and legislators in the U.S. House of Representatives and Senate have indicated they will introduce resolutions of disapproval under the Congressional Review Act in an attempt to nullify the final regulation. CUPA-HR will keep members apprised of any new updates as it relates to the status of this final rule.

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January 11, 2024
Federal Agencies Propose Major Changes to Mental Health Parity Regulations – CUPA-HR
by CUPA-HR | October 11, 2023

This blog post was contributed by Elena Lynett, JD, senior vice president at Segal, a CUPA-HR Mary Ann Wersch Premier Partner.

Institutions generally provide comprehensive mental health and substance use disorder (MH/SUD) benefits as part of their commitment to creating a safe and nurturing campus. However, the Mental Health Parity and Addiction Equity Act (MHPAEA) requires that institutions providing MH/SUD benefits ensure parity in coverage between the MH/SUD and medical/surgical benefits. The Department of Health and Human Services, the Department of Labor, and the Department of the Treasury recently proposed major changes to the MHPAEA regulations for group health plan sponsors and insurers.

The proposed changes address nonquantitative treatment limitations (NQTLs) — a term which references a wide range of medical management strategies and network administrative practices that may impact the scope or duration of MH/SUD benefits. Examples of NQTLs include prior or ongoing authorization requirements, formulary design for prescription drugs, and exclusions of specific treatments for certain conditions.

If government agencies issue a final rule similar to the proposal, plans will face additional data collection, evaluation, compliance and administrative requirements. The most significant proposed changes are:

The “predominant/substantially all” testing that currently applies to financial requirements and quantitative treatment limitations under MHPAEA would apply as a threshold test for any NQTL;

New data collection requirements, including denial rates and utilization information;

A new “meaningful benefits” standard for MH/SUD benefits;

Detailed requirements regarding the documented comparative analysis that plans must have for each applicable NQTL;

Introduction of a category of NQTLs related to network composition and new rules aimed at creating parity in medical/surgical and MH/SUD networks;

Prohibition on separate NQTLs for MH/SUD;

For plans subject to the Employee Retirement Income Security Act of 1974 (ERISA), a requirement that a named fiduciary would have to review and certify documented comparative analysis as complying with MHPAEA; and

For non-federal governmental plans, sunset of the ability to opt out of compliance with the MHPAEA rules.

For more information on the proposed rules, see Segal’s August 1, 2023 insight.

The deadline to comment on the proposed rules is October 17, 2023. If interested, your institution may file comments here. CUPA-HR will be filing comments with other associations representing higher education and plan sponsors. As proposed, plans could be expected to comply as early as the first day of any plan year beginning on or after January 1, 2025.

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October 11, 2023
Department of Labor Moves on Proposed Overtime Rule – CUPA-HR

by CUPA-HR | July 13, 2023

Yesterday, the Department of Labor (DOL) sent its proposed rule on “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” to the White House Office of Information and Regulatory Affairs (OIRA) for review. This is a required initial step before the proposed overtime rule is published.

OIRA, part of the president’s Office of Management and Budget (OMB), is required to review all proposed and final rules, as well as all regulatory actions, before implementation. While OIRA has 90 days to conduct its review, in most cases, the review takes 30 to 60 days. If this timetable holds true, DOL stands a reasonable chance of publishing a proposed rule sometime close to the August 2023 target date set forth in the Spring 2023 Regulatory Agenda.

The proposed rule is not public during OIRA’s review, so at this time we do not have any specific details on what the proposal contains. However, OIRA takes meetings to hear from concerned parties about proposed rules under their review, and CUPA-HR will be requesting a meeting to reiterate concerns we have set forth in letters to DOL since the proposal appeared on the Fall 2021 Regulatory Agenda.

We’ll be sure to keep CUPA-HR members updated on all the latest details regarding the proposed overtime rule and possible advocacy opportunities during the OIRA review process.

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July 13, 2023
Biden Administration Releases Spring 2023 Regulatory Agenda – CUPA-HR
by CUPA-HR | June 26, 2023

On June 14, the Biden administration released its Spring 2023 Unified Agenda of Regulatory and Deregulatory Actions (Regulatory Agenda), providing the public with an update on the regulatory and deregulatory activities under development across approximately 67 federal departments, agencies and commissions. This release serves as the first Regulatory Agenda for the 2023 year, setting target dates for regulatory actions in the coming year.

CUPA-HR’s government relations team has completed a thorough review of the Spring 2023 Regulatory Agenda and put together the following list of noteworthy proposed actions for members.

Department of Labor

Wage and Hour Division — Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees

According to the Regulatory Agenda, the Department of Labor (DOL)’s Wage and Hour Division (WHD) has again delayed the Notice of Proposed Rulemaking (NPRM) to address changes to the Fair Labor Standards Act (FLSA)’s overtime pay requirements to August 2023. The WHD first announced their intention to move forward with the NPRM in the Fall 2021 Regulatory Agenda, stating its goal “to update the salary level requirement of the section 13(a)(1) exemption [under the FLSA].”

As a reminder, changes to overtime pay requirements have been implemented through regulations under both the Obama and Trump administrations. In May 2016, the Obama administration’s DOL issued a final rule increasing the salary threshold from $23,660 to $47,476 per year and imposed automatic updates to the threshold every three years. However, court challenges prevented the rule from taking effect, and it was permanently enjoined in September 2017. After the Trump administration started the rulemaking process anew, the DOL issued a new final rule in September 2019 raising the minimum salary level required for exemption from $23,660 annually to $35,568 annually. This final rule went into effect January 1, 2020, and remains in effect today.

Since the regulation’s reintroduction in the Fall 2021 Regulatory Agenda, CUPA-HR has participated in several DOL listening sessions and has sent letters to the DOL expressing concerns with the timing of the rulemaking. In a recent letter, CUPA-HR joined other associations in calling for the Department to postpone or abandon the anticipated overtime rulemaking, citing concerns with supply chain disruptions, workforce shortages, inflation, and shifting workplace dynamics.

Wage and Hour Division — Employee or Independent Contractor Classification Under the Fair Labor Standards Act

In August 2023, the WHD anticipates issuing a final rule to amend the current method for determining independent contractor status for workers.

On October 13, 2022, the DOL published an NPRM to rescind the current method for determining independent contractor status under the FLSA. The current test, finalized by the Trump administration in 2021, has two core factors of control and investment with three additional factors (integration, skill and permanency) that are relevant only if those core factors are in disagreement. The Biden rule proposes a return to a “totality-of-the-circumstances analysis” of multiple factors in an economic reality test, including the following six factors, which are equally weighted with no core provisions:
- the extent to which the work is integral to the employer’s business;
- the worker’s opportunity for profit or loss depending on managerial skill;
- the investments made by the worker and the employer;
- the worker’s use of skill and initiative;
- the permanency of the work relationship; and
- the degree of control exercised or retained by the employer control.
Employment and Training Administration — Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States

The DOL’s Employment and Training Administration (ETA) has moved the “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States” proposed rule to the list of long-term actions to be taken by the agency, anticipating a release of the NPRM in June 2024. According to the listing in the regulatory agenda, the NPRM will seek to establish “a new wage methodology for setting prevailing wage levels for H-1B/H-1B1/E-3 and PERM programs consistent with the requirements of the Immigration and Nationality Act.”

The upcoming NPRM will likely amend the Trump administration’s final rule that was scheduled to take effect on November 14, 2022, but was subsequently vacated by a federal court in June 2021. The new proposal will take into consideration the feedback it received in response to a Request for Information (RFI) on data and methods for determining prevailing wage levels “to ensure fair wages and strengthen protections for foreign and U.S. workers.”

CUPA-HR filed comments in opposition to the Trump administration’s regulations on the issue and in response to the Biden administration’s RFI.

Department of Education

Office for Civil Rights — Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance

In October 2023, the Department of Education’s Office for Civil Rights (OCR) plans to release its highly anticipated Title IX final rule. The rulemaking would finalize the June 2022 NPRM to roll back and replace the Trump administration’s 2020 regulations while simultaneously expanding protections against sex-based discrimination to cover sexual orientation, gender identity, and pregnancy or related conditions.

CUPA-HR filed comments in September 2022 in response to the NPRM. In our comments, we brought attention to the possible impact the proposed regulations could have on how higher education institutions address employment discrimination.

On May 26, the Department of Education published a blog post stating that the release of the anticipated Title IX final rule will be delayed until at least October 2023. The final rule was previously targeted in the Fall 2022 Regulatory Agenda for May 2023. The department stated that they need additional time to review the 240,000 comments they received in response to the Title IX proposed rule.

Nondiscrimination on the Basis of Sex in Athletics Education Programs or Activities Receiving Federal Financial Assistance

The Department of Education also plans to release the Title IX final rule for student eligibility in athletic programs in October 2023. The rule would finalize the NPRM that was released by the Department in April 2023.

Under the NPRM, schools that receive federal funding would not be permitted to adopt or apply a “one-size-fits-all” ban on transgender students participating on teams consistent with their gender identity. Instead, the proposal allows schools the flexibility to develop team eligibility criteria that serves important educational objectives, such as fairness in competition and preventing sports-related injuries. The Department further explains that the eligibility criteria must take into account the sport, level of competition, and grade or education level of students participating, and the criteria would have to minimize harm to students whose opportunity to participate on a team consistent with their gender identity would be limited or denied.

The NPRM received over 150,000 comments addressing support for and concerns with the NPRM. Again, the Department must review all comments before issuing a final rule to implement these regulations, which may lead to a further delay.

National Labor Relations Board

Joint Employer

In August 2023, the National Labor Relations Board (NLRB) plans to release its anticipated final rule to amend “the standard for determining whether two employers, as defined under the National Labor Relations Act (NLRA), are a joint employer under the NLRA.”

On September 7, 2022, the NLRB issued an NPRM on the joint employer standard. The NPRM establishes joint employer status of two or more employers if they “share or co-determine those matters governing employees’ essential terms and conditions of employment,” such as wages, benefits and other compensation; work and scheduling; hiring and discharge; discipline; workplace health and safety; supervision; and assignment and work rules. According to the NLRB’s press release, the board “proposes to consider both direct evidence of control and evidence of reserved and/or indirect control over these essential terms and conditions of employment when analyzing joint-employer status.”

Department of Homeland Security

U.S. Immigration and Customs Enforcement — Optional Alternative to the Physical Examination Associated With Employment Eligibility Verification (Form I-9)

According to the Regulatory Agenda, the Department of Homeland Security (DHS) plans to issue a final rule in August 2023 that would finalize the agency’s proposed rule aiming to “revise employment eligibility verification regulations to allow the secretary to authorize alternative document examination procedures in certain circumstances or with respect to certain employers.”

On August 18, 2022, the DHS published its NPRM on optional alternative examination practices for employers when reviewing an individual’s identity and employment authorization documents required by the Form I-9, Employment Eligibility Verification. If finalized, the proposed rulemaking would create a framework under which the secretary of Homeland Security could allow alternative options for verifying those documents, such as reviewing the documents via video, fax, or email rather than directly allowing employers and agents to use such alternative examination options. According to the NPRM, the secretary would be authorized to implement the alternative examination options in a pilot program if they determine such procedures would offer an equivalent level of security, as a temporary measure to address a public health emergency declared by the secretary of Health and Human Services, or a national emergency declared by the president.

CUPA-HR filed comments in response to the DHS NPRM in October 2022. The comments were supportive of the Department moving forward with the NPRM, but cautioned against requiring secondary, in-person review of I-9 documents after virtual inspection and once an employee is in-person on a regular and consistent basis; issuing training for document detection and/or anti-discrimination training that may be offered at a high cost without proper vetting, and requiring institutions to be enrolled in E-Verify to participate in the alternative options.

On a related noted, on May 4, 2023, the U.S. Immigration and Customs Enforcement (ICE) announced it will provide employers with 30 days to reach compliance with in-person Form I-9 requirements after the COVID-19 flexibilities sunset on July 31, 2023. ICE previously introduced temporary flexibilities in response to the COVID-19 pandemic in March 2020, allowing employers to review employees’ identity and employment authorization documents remotely, rather than in person. This virtual inspection was to be followed by a physical examination within three business days after normal operations resumed. With the new final rule set for earliest release in August 2023, employers will likely have to resume traditional Form I-9 examination practices until the new final rule goes into effect.

U.S. Citizenship and Immigration Services — Modernizing H-1B Requirements and Oversight and Providing Flexibility in the F-1 Program

In December 2023, the DHS’s United States Citizenship and Immigration Services (USCIS) plans to release an NPRM to “amend its regulations governing H-1B specialty occupation workers and F-1 students who are the beneficiaries of timely filed H-1B cap-subject petitions.” The NPRM will specifically propose to “revise the regulations relating to ‘employer-employee relationship’ and provide flexibility for start-up entrepreneurs; implement new requirements and guidelines for site visits including in connection with petitions filed by H-1B dependent employers whose basic business information cannot be validated through commercially available data; provide flexibility on the employment start date listed on the petition (in limited circumstances); address ‘cap-gap’ issues; bolster the H-1B registration process to reduce the possibility of misuse and fraud in the H-1B registration system, and clarify the requirement that an amended or new petition be filed where there are material changes, including by streamlining notification requirements relating to certain worksite changes, among other provisions.”

CUPA-HR continues to monitor these regulations and will keep members apprised of any significant updates.

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June 26, 2023
Julie Su’s Confirmation for DOL Secretary Uncertain as Senator Manchin Seeks Alternative Nominees

In the latest development on Julie Su’s contentious nomination for secretary of the Department of Labor (DOL), Sen. Joe Manchin (D-WV) appears unlikely to vote in favor of Su when her nomination reaches a floor vote in the Senate. Recent news reported that Manchin may be seeking alternative candidates for the position, though no names have been publicly revealed at this time. Given the current 51-49 Democratic majority in the Senate, however, Manchin’s potential opposition means Democrats cannot afford to lose any additional support for the nomination.

The odds may be further stacked against Su as Sens. Krysten Sinema (I-AZ) and Jon Tester (D-MT) have yet to reveal whether they will support Su’s nomination. Although Manchin, Sinema and Tester all caucus with Democrats, they face reelection in 2024 in Republican-leaning states, leaving them in a precarious position as Republicans are seemingly united in opposing Su.

Nomination Hearing and Committee Vote

On April 19, the Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing on Su’s nomination to serve as secretary of labor. During the hearing, Republicans and Democrats discussed Su’s performance as the secretary of California’s Labor and Workforce Development Agency (LWDA), including her involvement in the agency’s handling of COVID-19-related unemployment insurance payments. Republicans on the committee pointed to the widespread COVID-19 unemployment insurance (UI) fraud paid out by the state. On the other side of the aisle, Democrats defended Su’s record. With regard to the UI fraud, Democrats held that California’s statistics were low in comparison to other states.

The hearing also focused on several key labor and employment issues that Su will work on as secretary of labor. On the topic of independent contractor classification, Republicans again focused on Su’s work at the LWDA, calling attention to her role in California’s Assembly Bill 5 law. The law establishes an ABC test, which is a three-pronged test used to classify workers as either employees or independent contractors. Republicans expressed concerns over whether Su would try to implement an ABC test through DOL regulations. In response, Democrats clarified that the ABC test is not included in the DOL’s new proposed rulemaking and that the DOL has previously stated that it lacks the legal authority to implement this test for classifying independent contractors.

Another issue area raised by Republicans was that of joint employment. Although her support for the joint employment standard was questioned, Ranking Member Bill Cassidy (R-LA) testified that Su has committed to not pursue changes to the joint employer standard if she is confirmed. Su said she understands the importance of the franchising model, stating that there is no plan currently on DOL’s fall or upcoming spring regulatory agenda to change the standard. Notably, she did not say whether there would be a rulemaking on the joint employer issue after the upcoming spring regulatory agenda.

A week after the hearing, the Senate HELP Committee voted to move Julie Su’s nomination to serve as secretary of labor out of committee and to a full Senate floor vote. The committee vote was divided along party lines, with 11 Democrats voting in favor and 10 Republicans voting against her nomination, foreshadowing the trouble she may face to be confirmed by the full Senate.

Next Steps

Given Manchin’s likely opposition and the narrowly divided Senate, Su’s confirmation as secretary of labor by the full Senate is still uncertain. If Sinema or Tester also commits to opposing Su, Su will likely not have the votes to be confirmed. As a result, Senate Majority Leader Chuck Schumer (D-NY) has yet to announce when the vote on Su’s nomination will hit the Senate floor.

In the meantime, Su will continue to serve as the acting secretary of labor in the absence of a person confirmed into that position. As a reminder, there are no limitations on the functions of an acting secretary, leaving Su with full authority over the DOL while her nomination is pending. That being said, anticipated rulemakings from DOL, such as the FLSA overtime rule and the independent contractor classification rule, may be held back from publication as a result of Su’s drawn-out nomination process.

CUPA-HR will keep members apprised of any major personnel or regulatory updates from DOL.

The post Julie Su’s Confirmation for DOL Secretary Uncertain as Senator Manchin Seeks Alternative Nominees appeared first on CUPA-HR.

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May 25, 2023
Workforce Innovation and Opportunity Act Reauthorization Prospects for the 118th Congress – CUPA-HR
by CUPA-HR | February 15, 2023

In the 118th Congress, bills will likely be introduced to reauthorize the Workforce Innovation and Opportunity Act (WIOA), which includes programs used by community colleges and other higher education institutions pursuing their own workforce development agendas. Passed in July 2014, the WIOA is the primary federal law to increase access to and coordination between workforce development and other related programs. This blog post provides context on what the WIOA accomplishes and highlights recent attempts to reauthorize the law.

Background

There are four major components to the WIOA:
- Title I includes programs related to workforce development activities and authorizes three formula grants through federally-funded, state- and locally-administered delivery systems that are administered by the Department of Labor.
- Title II enacts the Adult Education and Family Literacy Act (AEFLA), which authorizes programs for adult education up to the secondary level, as well as English training, and is administered by the Department of Education.
- Title III amends the Wagner-Peyser Act, which authorizes the Employment Service formula grant program that is essential to the WIOA for planning and accountability purposes.
- Title IV amends the Rehabilitation Act of 1973 and provides funding to state agencies to support employment-related services to individuals with disabilities, among other smaller programs.
The WIOA originally funded its programs from fiscal year 2015 to fiscal year 2020 after most WIOA programs went into effect July 2015. Appropriations authorization for the WIOA was set to expire after fiscal year 2020, but Congress has extended authorization through the annual appropriations process since fiscal year 2021. Despite the extended authorization, Congress has tasked itself with producing a reauthorization of the WIOA that will extend appropriations for another five or more years and help modernize its workforce development programs. We will likely see reauthorization legislation in the House and/or Senate before the current term ends in 2025.

WIOA Reauthorization Attempt in the 117th Congress

In the 117th Congress, House Education and Labor Committee Chair Bobby Scott (D-VA) and 17 committee Democrats introduced the Workforce Innovation and Opportunity Act of 2022 (H.R. 7309, “WIOA reauthorization bill”) and sent it to the House floor for a vote. According to a Congressional Research Service (CRS) report on H.R. 7309, the bill “would retain the general structure and systems established by the WIOA” and would “authorize appropriations for fiscal years 2023 through 2028, increasing funding for existing systems and establishing several new programs.” The CRS report specifies that the WIOA reauthorization bill focused mostly on amending Title I of the law.

On May 17, 2022, the House passed the WIOA reauthorization bill and sent it to the Senate where the bill stalled in the Senate Help, Education, Labor and Pensions (HELP) Committee until the 117th Congress adjourned. The WIOA reauthorization bill passed the House among mostly partisan lines with 216 Democrats and four Republicans voting in favor of the bill and 196 Republicans voting against it.

House Republicans criticized Scott and other Democrats on the Education and Labor Committee for failing to collaborate with Republicans to create a bipartisan bill prior to its introduction and during the committee markup. Prior to its final House vote, Education and Labor Committee Ranking Member Virginia Foxx (R-NC) spoke out against the bill on the House floor stating that the Democrats’ bill did not create a workforce development system that prepares workers for in-demand skills.

Potential for WIOA Reauthorization Attempts in the 118th Congress

Given a divided House and Senate, both chambers will have to work together to pass any meaningful legislation for a WIOA reauthorization. Democrats and Republicans may be incentivized to produce a consensus WIOA reauthorization bill to address the record labor shortages and resulting open positions that employers are struggling to fill across the country. With Foxx now serving as the chair of the House Education and the Workforce Committee and her interest in WIOA reauthorization during the last Congress, we believe she and other House Republicans will introduce a new bill, though it’s unknown whether they’ll be able to come to an agreement with Democrats in both the House and Senate to finalize and pass a new reauthorization bill.

Without knowing how or when Congress will consider WIOA reauthorization, we are more certain of members who may be House champions of such a bill. In addition to Full Committee Chair Foxx and Ranking Member Scott, House Higher Education and Workforce Development Subcommittee leaders Burgess Owens (R-UT) and Frederica Wilson (D-FL) will be involved in WIOA reauthorization bills that are introduced in this Congress. Less certain is where new Senate HELP leaders Bernie Sanders (I-VT) and Bill Cassidy (R-LA) will stand on this particular issue given the Senate’s lack of action in the last Congress and each senator’s new ascension to top leadership positions of the HELP Committee.

CUPA-HR will monitor WIOA reauthorization bills this Congress and keep members apprised of any new developments.

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February 15, 2023
Fall 2022 Regulatory Agenda Targets Release Dates for DOL’s Overtime Proposal and Final Title IX Rule – CUPA-HR
by CUPA-HR | January 10, 2023

On January 4, 2023, the Biden administration released the anticipated Fall 2022 Unified Agenda of Regulatory and Deregulatory Actions (Regulatory Agenda), providing the public with a detailed glimpse into the regulatory and deregulatory activities under development across approximately 67 federal departments, agencies and commissions. Agendas are generally released in the fall and spring and set target dates for each agency and sub-agency’s regulatory actions for the coming year.

After completing a thorough review of the items included in the Regulatory Agenda, CUPA-HR put together the following list of significant proposed actions for members.

Department of Labor

Wage and Hour Division — Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees

According to the Regulatory Agenda, the Department of Labor (DOL)’s Wage and Hour Division (WHD) is now planning to release a Notice of Proposed Rulemaking (NPRM) to address changes to the Fair Labor Standards Act (FLSA)’s overtime pay requirements in May 2023. The WHD first announced their intention to move forward with the NPRM in the Fall 2021 Regulatory Agenda, stating its goal “to update the salary level requirement of the section 13(a)(1) exemption [under the FLSA].”

As a refresher, changes to overtime pay requirements have been implemented through regulations under both the Obama and Trump administrations. In May 2016, the Obama administration’s DOL issued a final rule increasing the salary threshold from $23,660 to $47,476 per year and imposed automatic updates to the threshold every three years. However, court challenges prevented the rule from taking effect and it was permanently enjoined in September 2017. After the Trump administration started the rulemaking process anew, the DOL issued a new final rule in September 2019 raising the minimum salary level required for exemption from $23,660 annually to $35,568 annually. This final rule went into effect January 1, 2020 and remains in effect today.

Since the regulation’s reintroduction in the Fall 2021 Regulatory Agenda, CUPA-HR has participated in several DOL listening sessions and has sent letters to the DOL expressing concerns with the timing of the rulemaking. Specifically, our concerns highlight the ongoing challenges of the COVID-19 pandemic and the continued reliance on hybrid and remote work, a historically tight labor market in the U.S. and the effects of inflation on the workforce.

Wage and Hour Division — Employee or Independent Contractor Classification Under the Fair Labor Standards Act

In May 2023, the WHD anticipates issuing a final rule to amend the current method for determining independent contractor status for workers.

On October 13, 2022, the DOL published an NPRM to rescind the current method for determining independent contractor status under the FLSA. The current test finalized by the Trump administration in 2021 has two core factors of control and investment with three additional factors (integration, skill and permanency) that are relevant only if those core factors are in disagreement. The Biden rule proposes a return to a “totality-of-the-circumstances analysis” of multiple factors in an economic reality test, including the following six factors, which are equally weighted with no core provisions:
- the extent to which the work is integral to the employer’s business;
- the worker’s opportunity for profit or loss depending on managerial skill;
- the investments made by the worker and the employer;
- the worker’s use of skill and initiative;
- the permanency of the work relationship; and
- the degree of control exercised or retained by the employer control.
Employment and Training Administration — Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States

In September 2023, the DOL’s Employment and Training Administration (ETA) plans to issue an NPRM to establish “a new wage methodology for setting prevailing wage levels for H-1B/H-1B1/E-3 and PERM programs consistent with the requirements of the Immigration and Nationality Act.” The proposal will likely amend the Trump administration’s final rule that was scheduled to take effect on November 14, 2022, but was subsequently vacated by a federal court in June 2021. The new proposal will take into consideration the feedback it received in response to a Request for Information (RFI) on data and methods for determining prevailing wage levels “to ensure fair wages and strengthen protections for foreign and U.S. workers.”

CUPA-HR filed comments in opposition to the Trump administration’s regulations on the issue and in response to the Biden administration’s RFI.

National Labor Relations Board

Joint Employer

In August 2023, the National Labor Relations Board (NLRB) plans to release its anticipated final rule to amend “the standard for determining whether two employers, as defined under the National Labor Relations Act (NLRA), are a joint employer under the NLRA.”

On September 7, 2022, the NLRB issued an NPRM on the joint employer standard. The NPRM establishes joint employer status of two or more employers if they “share or co-determine those matters governing employees’ essential terms and conditions of employment,” such as wages, benefits and other compensation, work and scheduling, hiring and discharge, discipline, workplace health and safety, supervision and assignment and work rules. According to the NLRB’s press release, the Board “proposes to consider both direct evidence of control and evidence of reserved and/or indirect control over these essential terms and conditions of employment when analyzing joint-employer status.”

Department of Education

Office for Civil Rights — Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance

In May 2023, the Department of Education’s Office for Civil Rights (OCR) plans to release its highly anticipated Title IX final rule. The rulemaking would finalize the June 2022 NPRM to rollback and replace the Trump administration’s 2020 regulations, specifically with respect to its grievance procedures, while simultaneously expanding protections against sex-based discrimination to cover sexual orientation, gender identity and pregnancy or related conditions.

CUPA-HR filed comments in September 2022 in response to the NPRM. In our comments, we tried to bring attention to the possible impact the proposed regulations could have on how higher education institutions address employment discrimination. The Department of Education received over 200,000 comments in response to the NPRM, which they must review prior to issuing a final rule to implement their changes.

In addition to the Title IX rulemaking, the OCR also announced its intention to issue an NPRM to address Title IX protections as it relates to athletics programs at educational institutions. The Department of Education announced its intention to pursue a separate rulemaking to address transgender students participation in athletic programs at institutions of higher education and such protections afforded to them under Title IX after the topic was frequently discussed in the media and in Congress in 2022. According to the Regulatory Agenda, the NPRM was set to be released in December 2022, but it has not yet been released.

Department of Homeland Security

U.S. Immigration and Customs Enforcement — Optional Alternative to the Physical Examination Associated With Employment Eligibility Verification (Form I-9)

According to the Regulatory Agenda, the Department of Homeland Security (DHS) plans to issue a final rule in May 2023 that would finalize the agency’s proposed rule aiming to “revise employment eligibility verification regulations to allow the Secretary to authorize alternative document examination procedures in certain circumstances or with respect to certain employers.”

On August 18, 2022, the DHS published its NPRM on optional alternative examination practices for employers when reviewing an individual’s identity and employment authorization documents required by the Form I-9, Employment Eligibility Verification. If finalized, the proposed rulemaking would create a framework under which the Secretary of Homeland Security could allow alternative options for verifying those documents, such as reviewing the documents via video, fax, or email rather than directly allowing employers and agents to use such alternative examination options. According to the NPRM, the Secretary would be authorized to implement the alternative examination options in a pilot program if they determine such procedures would offer an equivalent level of security, as a temporary measure to address a public health emergency declared by the Secretary of Health and Human Services, or a national emergency declared by the President.

CUPA-HR filed comments in response to the DHS NPRM in October 2022. The comments were supportive of the Department moving forward with the NPRM, but cautioned against requiring secondary, in-person review of I-9 documents after virtual inspection and once an employee is in-person on a regular and consistent basis; issuing training for document detection and/or anti-discrimination training that may be offered at a high cost without proper vetting, and requiring institutions to be enrolled in E-Verify to participate in the alternative options.

U.S. Citizenship and Immigration Services — Modernizing H-1B Requirements and Oversight and Providing Flexibility in the F-1 Program

In October 2023, the DHS’s United States Citizenship and Immigration Services (USCIS) plans to release an NPRM to “amend its regulations governing H-1B specialty occupation workers and F-1 students who are the beneficiaries of timely filed H-1B cap-subject petitions.” The NPRM will specifically propose to “revise the regulations relating to ‘employer-employee relationship’ and provide flexibility for start-up entrepreneurs; implement new requirements and guidelines for site visits including in connection with petitions filed by H-1B dependent employers whose basic business information cannot be validated through commercially available data; provide flexibility on the employment start date listed on the petition (in limited circumstances); address ‘cap-gap’ issues; bolster the H-1B registration process to reduce the possibility of misuse and fraud in the H-1B registration system, and clarify the requirement that an amended or new petition be filed where there are material changes, including by streamlining notification requirements relating to certain worksite changes, among other provisions.”

Department of Agriculture

Agriculture Acquisition Regulation: Internal Policy and Procedural Updates and Technical Changes

In May 2023, the Department of Agriculture (USDA) plans to re-propose an NPRM that was previously issued in February 2022 and included controversial provisions that would require federal contractors on projects procured by the agency to certify their compliance with dozens of federal and state labor laws and executive orders.

In the February NPRM, the USDA provided only 32 days for stakeholder comment submissions on the proposal. CUPA-HR filed an extension request with the department asking for an additional 90 days to “evaluate the NPRM’s impact on [members’] research missions and collect the information needed in order to provide thoughtful and accurate input to the USDA,” as well as official comments that were pulled from 2012 comments CUPA-HR submitted with the Society for Human Resource Management (SHRM).

While it is unclear whether the May NPRM will include the blacklisting language again, the abstract of the re-proposal states that “the new proposed rule would be responsive to the comments received on our February 2022 proposal.”

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January 10, 2023
HR and the Courts – December 2022 – CUPA-HR

by CUPA-HR | December 13, 2022

Each month, CUPA-HR General Counsel Ira Shepard provides an overview of several labor and employment law cases and regulatory actions with implications for the higher ed workplace. Here’s the latest from Ira.

University Wins Dismissal of “Deliberate Indifference” to Sex Harassment Claims on Statute of Limitations Grounds

A federal district court dismissed 12 counts of alleged indifference to sex harassment brought by six Jane Does, five of whom are current or former students and one of whom is a current professor. The case involves allegations against a male graduate student in French language studies who was arrested for rape of a student at another college in 2018. It is alleged that the university did not act on sex harassment allegations of inappropriate touching and “raunchy” texts following the incident at the other college.

The graduate student allegedly raped Doe #1 in September 2020, and the university suspended him in November 2020 following an investigation for sexual harassment, endangerment and disorderly conduct. The graduate student fled the country for France in December 2020 and has not returned. The graduate student was indicted for rape stemming from the 2018 alleged assault in December 2021.

The federal district court judge dismissed all the allegations on statute of limitations grounds (Doe #1 et al v. Board of Supervisors of Louisiana State University and Agriculture and Mechanical College et al ( M.D. La. No. 21-cv-00564, 11/3/22)). Louisiana has the shortest statute of limitations in the country at one year and the judge concluded that the majority of the claims were time barred, granting plaintiffs the ability to amend two of the 12 claims and refile them.

Athletic Director Applicant Loses Reverse Discrimination Claim on the Basis of Interview Performance

A white athletic director applicant who claimed superior qualifications for a senior athletic director position failed to show that the stated reason for his rejection (poor interview performance) in favor of a minority applicant was pretextual. The plaintiff was a long-time athletic director in the South Bend Indiana School district at the time he applied for a broader and more senior athletic director position. The judge ruled that while the plaintiff may have been more qualified “on paper alone” by a comparison of resumes with the minority applicant who was chosen for the job, the employer showed that a comparison of resumes was not the sole criteria for job selection (Groves v. South Bend Community School Corporation (2022 BL 347215, 7th Cir. No. 21-03336, 10/1922)).

The judge went on to recognize that the minority applicant performed much better during his interview and convinced the interviewer that he would be much better able to mend the strained relationship the school district had with the State Athletic Association. The judge further observed that during the interview, the plaintiff stressed his experience in firing coaches and this was not helpful in the mind of the interviewer with regard to the State Athletic Association. The judge concluded that the facts supported the conclusion that interview performance was not a pretext to commit race discrimination. The judge’s conclusion was affirmed by the 7th U.S. Circuit Court of Appeals (covering Wisconsin, Illinois and Indiana).

State of Florida Appeals Federal Judge’s Decision Blocking the Florida Law Restricting Employer Anti-Bias Training

The state of Florida has appealed to the U.S. Court of Appeals for the 11th Circuit, asking the appellate court to reverse a federal judge’s decision that barred enforcement of the controversial law’s provisions, which prohibited employers in the state of Florida from promoting various sex- and race-based anti-bias concepts as part of employee training.

The federal district trial judge issued a preliminary injunction barring enforcement of much of the law based on a conclusion that it violated employers’ First Amendment free speech rights under the U.S. Constitution. The state of Florida argued in its appeal that the statute does not restrict employer free speech, rather it blocks employer conduct “conscripting employees against their will into the audience as a condition of their employment,” (Honeyfund.com Inc et al v. DeSantis et al (Case No. 13135, 11th Cir.)).

The federal trial judge had concluded that Florida state lawmakers wrote a law that attempts to squelch viewpoints on race and sex bias that they do not like. CUPA-HR will follow this litigation as it develops.

Department of Labor Proposes Self-Correction Program for Retirement Plans With Late Participant Contributions and Loan Repayments

The Department of Labor is proposing a new self-correction component under its Voluntary Fiduciary Correction Program (VFCP) to allow plan administrators to self-correct certain plan violations without the need to file a formal application and no action request. Under the proposed rule, the plan would report the correction through an online portal. The VFCP allows plans to self-correct certain Employee Retirement Income Security Act violations and avoid civil penalties by identifying and correcting certain plan design and implementation errors. Under the proposal, plans with late participant contributions or loan repayments could use this alternative to self-correct these violations.

Under the proposed rule, the self-correction must be made within 180 days of the withholding or receipt of funds and the lost earnings must not exceed $1,000. Publication of the proposed rule is expected to be made in late November/early December, and comments must be submitted within 60 days of publication of the proposed rule.

Terminated Softball Coach Sues for First Amendment Speech and Religious Discrimination Allegedly Related to Her Offer to Adopt a Student’s Baby

A former assistant softball coach has filed a lawsuit in federal court alleging that her former university discriminated against her in the exercise of her free speech rights and religious beliefs when she was discharged after she offered to adopt a student’s baby and refused to reveal the identity of the student (Wiggins v. Idaho State University et al (D. Idaho No. 22-cv-00474, complaint filed 11/17/22)).

The complaint alleges that the university violated the former coach’s First Amendment speech and exercise of religion rights by “coercing” the coach to convince the birth mother to disclose the pregnancy and birth to her parents and to withdraw her offer to adopt the baby. The complaint alleges that the university discharged the coach after she refused to disclose the name of the birth mother to the athletic director and dean of students so they could contact the birth mother‘s parents. The plaintiff alleges that her offer to adopt the baby was an “exercise of” her Christian faith. The plaintiff also alleges that the loss of employment forced her to sell her home and move her family to Texas.

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December 13, 2022