Tag: Modernization

  • House Education and Workforce Committee Holds Hearing on FLSA Modernization

    House Education and Workforce Committee Holds Hearing on FLSA Modernization

    by CUPA-HR | March 27, 2025

    On March 25, the House Education and Workforce Subcommittee on Workforce Protections held a hearing titled “The Future of Wage Laws: Assessing the FLSA’s Effectiveness, Challenges, and Opportunities.” The hearing focused on several bills aimed at modernizing the Fair Labor Standards Act (FLSA), including legislation to amend overtime pay requirements on compensatory time and regular rate of pay and to provide clarity on independent contractor status under the FLSA.

    The witnesses at the hearing included Tammy McCutchen, senior affiliate at Resolution Economics; Paige Boughan, senior vice president and director of human resources at Farmers and Merchants Banks (on behalf of the Society for Human Resource Management); Andrew Stettner, director of economy and jobs at the Century Foundation; and Jonathan Wolfson, chief legal officer and policy director at Cicero Institute.

    Compensatory Time

    Committee members and witnesses discussed the Working Families Flexibility Act, which would allow private sector employers, including private institutions, to offer employees the choice of compensatory time or cash wages for overtime hours worked. Currently, the FLSA only allows for employees working for the public sector, including public institutions, to choose compensatory time or cash compensation for overtime hours worked.

    Chair of the Education and Workforce Committee Tim Walburg (R-MI) expressed his support for a bill like the Working Families Flexibility Act, as it would allow employees to choose which form of compensation best suits their needs. On the other side of the aisle, Rep. Mark Takano (D-CA) argued that offering compensatory time is an attempt to force workers to work more hours for free.

    CUPA-HR submitted a letter for the record prior to the hearing in support of the Working Families Flexibility Act. The letter highlights our past support for the legislation as introduced in previous Congresses. It also draws from CUPA-HR President and CEO Andy Brantley’s testimony for a 2013 Workforce Protections Subcommittee hearing in support of compensatory time. In his testimony, he provided examples of instances where employees benefited from the option of such overtime compensation, which he witnessed while working as an HR leader at a large public university.

    Regular Rate

    The hearing also discussed the Empowering Employer Child and Elder Care Solutions Act, which would exclude the value of employer-funded child or dependent care benefits from the regular rate calculation. The FLSA requires that overtime hours are paid at one-and-one-half times the employee’s regular rate of pay, which is an average hourly rate that includes certain types of compensation.

    During the hearing, Rep. Mark Messmer (R-IN) argued that the regular rate calculation that is currently used to determine overtime pay discourages employers from offering certain benefits. McCutcheon stated that legislation like the Empowering Employer Child and Elder Care Solutions Act would encourage employers to offer more benefits as they would no longer face burdensome overtime pay calculations.

    Independent Contractor Status

    During the hearing, committee members and witnesses also discussed the Modern Worker Empowerment Act (H.R. 1319), which would establish a new standard for defining an employee and an independent contractor under the FLSA. Specifically, the legislation would implement language that states workers are employees if the employer controls what work will be done and how it will be done, and workers are independent contractors if the entity under which the worker works does not exercise significant control over how the work is performed, among other things.

    Rep. Kevin Kiley (R-CA), who introduced the bill in early February, stated that the Modern Worker Empowerment Act was needed to ensure protections for independent contractors in the FLSA. Wolfson pointed to a 2019 California law, AB 5, which implemented an “ABC” test for worker classification and stated that businesses stopped working with freelancers as a result of the law. McCutcheon explained that the Modern Worker Empowerment Act provides clarity when determining worker classification status by focusing on who controls the work being done, unlike California’s ABC test which she claimed was too complicated.

    Ranking Member of the Education and Workforce Committee Bobby Scott (D-VA) opposed the Modern Worker Empowerment Act, claiming that workers do not want to be independent contractors and that employers force workers to accept independent contractor status, thus saving employers money.

    The House Education and Workforce Committee will continue to consider these bills as they are reintroduced and marked up during the 119th Congress. CUPA-HR will monitor for future developments on the bills discussed during this hearing and keep members apprised of significant updates.



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  • DHS Issues Final H-1B Modernization Rule

    DHS Issues Final H-1B Modernization Rule

    by CUPA-HR | December 18, 2024

    On December 18, the Department of Homeland Security (DHS) published a final rule to modernize the H-1B visa program, finalizing changes first proposed in October 2023. The rule will take effect on January 17, 2025, introducing significant updates aimed at clarifying the requirements of the H-1B program and improving program efficiency, providing greater benefits and flexibility for petitioners and beneficiaries, and strengthening program integrity measures.

    The final rule responds to comments from a variety of stakeholders, including concerns raised by CUPA-HR and others in a multi-sector joint comment letter signed by 74 organizations and a higher education-focused letter led by the American Council on Education (ACE). Both letters advocated for changes to the definition of a “specialty occupation” and other key areas to ensure the regulations better align with workforce needs. The final rule incorporates feedback from stakeholders and aims to provide clarity while maintaining program integrity.

    Below are highlights of some noteworthy provisions in the final rule and next steps.

    Revised Definition and Criteria for H-1B Specialty Occupations

    The final rule modifies the definition of an H-1B specialty occupation in response to public comments, including those CUPA-HR signed onto in a multi-sector joint comment letter and a higher education-focused letter. DHS clarified that a degree or its equivalent must be “directly related” to the duties of the position, with “directly related” defined as having a logical connection between the degree and the job duties. This change addresses concerns raised in comments that the proposed language could have been misinterpreted to require adjudicators to focus solely on a beneficiary’s specialized studies.

    The rule also permits a range of qualifying degree fields, provided that each field is directly related to the position’s duties. Additionally, DHS removed references to specific degree titles such as “business administration” and “liberal arts” to avoid undue reliance on degree titles. This recognizes that degree titles can vary between institutions and evolve over time, emphasizing the relevance of the degree’s content rather than its name. These changes align with the requests made in the joint comment letter, ensuring that the definition of a specialty occupation is practical and reflective of modern workforce realities.

    Codification of the Deference Policy

    The final rule codifies DHS’s current deference policy, providing greater clarity on how U.S. Citizenship and Immigration Services (USCIS) adjudicators should approach petitions involving the same parties and underlying facts. Under the codified policy, adjudicators are generally required to defer to a prior USCIS determination of eligibility when adjudicating a subsequent Form I-129, Petition for Nonimmigrant Worker. However, deference will not apply if a material error in the prior approval is discovered, or if new material information or a material change impacts the petitioner’s or beneficiary’s eligibility.

    Elimination of the Itinerary Requirement

    The final rule eliminates the itinerary requirement, which previously required petitioners to provide an itinerary detailing the dates and locations of services or training when filing Form I-129. This change addresses concerns that the requirement was largely duplicative of other information already provided in the petition. Eliminating this requirement simplifies the filing process, reducing administrative burdens for petitioners. The change is particularly beneficial for individuals in roles such as medical residencies under H-1B, where work may occur at multiple sites, as it removes unnecessary procedural hurdles without impacting USCIS’s ability to assess eligibility.

    Expanded H-1B Cap Exemptions for Nonprofit and Governmental Research Organizations

    The final rule modestly broadens the scope of H-1B cap exemptions for nonprofit and governmental research organizations, as well as nonprofits affiliated with institutions of higher education. The revised definitions recognize that qualifying organizations may have multiple fundamental activities or missions beyond just research or education. Under the updated regulations, organizations can qualify for a cap exemption if research or education is one of their fundamental activities, even if it is not their primary activity or mission. These changes better align the cap exemption criteria with the diverse roles and structures of modern nonprofit and governmental entities.

    Enhanced Cap-Gap Protections for F-1 Students

    The final rule extends cap-gap protections for F-1 students transitioning to H-1B status. Under the new provision, F-1 students who are beneficiaries of timely filed, nonfrivolous H-1B petitions will receive an automatic extension of their F-1 status and employment authorization through April 1 of the following calendar year. This extension provides up to six additional months of status and work authorization, reducing the risk of lapses in lawful status or employment eligibility while awaiting approval of the change to H-1B status.

    Codification of Site Visit Authority

    The final rule codifies and strengthens the USCIS site visit program, which is administered by the Fraud Detection and National Security (FDNS) unit. DHS clarifies that refusal to comply with a site visit may result in the denial or revocation of a petition. Additionally, the rule explicitly authorizes DHS to conduct site visits at various locations connected to the H-1B employment, including the primary worksite, third-party worksites, and any other locations where the employee works, has worked, or will work. This provision formalizes long-standing practices and enhances USCIS’s ability to monitor compliance with H-1B program requirements.

    Next Steps

    The rule takes effect on January 17, 2025, just days before the next presidential inauguration. While it is unclear if the incoming Trump administration will seek to modify or withdraw the regulation, the codification of key provisions, such as the deference policy, makes them more difficult to rescind without formal rulemaking.

    Employers should also prepare for the required use of a new edition of Form I-129, Petition for a Nonimmigrant Worker, on the rule’s effective date. Because there will be no grace period for accepting prior editions of the form, employers should review the preview version, which will be published soon on uscis.gov, to prepare for the transition.



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