The White House’s Office of Management and Budget (OMB) subcommittee, the Office of Information and Regulatory Affairs (OIRA), has received rules from the Department of Labor (DOL) regarding: (1) Employee or Independent Contractor Classification Under the Fair Labor Standards Act (RIN: 1235-AA43) and (2) Temporary Agricultural Employment of H-2A Nonimmigrants in the United States (RIN: 1205-AB89).
Employee or Independent Contractor Classification Under the Fair Labor Standards Act (RIN: 1235-AA43). The DOL recently held public forums to engage employers and workers in rulemaking on determining employee or independent contractor status under the Fair Labor Standards Act (FLSA) (see Payroll Update, 07/06/2022). A final rule, promulgated under the prior administration, on the topic has been in effect since March 8, 2021, after a court ruled on March 14, 2022 that the DOL’s delay and subsequent withdrawal of the rule was not permitted. The DOL attempted to withdraw the Trump-era rule due to concerns related to the priority given to two “core factors” for determining worker status as opposed to also reviewing the totality of the circumstances related to the employment relationship as courts have historically considered. This final rule employs the economic realities test to determine if the worker is dependent on a particular individual, business, or organization for work (and is thus an employee) or is in business for him- or herself (and is thus an independent contractor). The final rule identifies and explains two “core factors,” specifically the nature and degree of the worker’s control over the work, and the worker’s opportunity for profit or loss based on initiative and/or investment. In addition, the rule contains three other factors that may serve as additional guideposts in the analysis: (1) the amount of skill required for the work; (2) the degree of permanence of the working relationship between the worker and the potential employer; and (3) whether the work is part of an integrated unit of production. No information on the proposed rule is available on the Spring 2022 Regulatory Agenda.
Temporary Agricultural Employment of H-2A Nonimmigrants in the United States (RIN: 1205-AB89). OIRA has received final rules amending the H-2A non-immigrant visa program. The H-2A temporary worker program allows agricultural employers who anticipate a shortage of U.S. workers to bring nonimmigrant foreign workers into the U.S. to perform agricultural labor or services of a temporary or seasonal nature. On July 26, 2019, the DOL released comprehensive proposed rules (see Payroll Update, 07/19/2019) that seek to streamline and simplify the H-2A application process, strengthen protections for U.S. and foreign workers, and ease unnecessary burdens on employers. The proposed rule would require the electronic filing of job orders and applications, promote the use of digital signatures, and provide employers with the option of staggering the entry of H -2A workers on a single application. The July 2019 proposed rules also revised the methodology used to establish the required wage rate for the H-2A program (Adverse Effect Wage Rate Methodology (AEWR)). On November 5, 2020, the DOL released final regulations regarding the AEWR portion of the proposed rule (see Payroll Update, 11/16/2020), effective December 21, 2020, however, a federal court order enjoined the implementation of the rule. The final regulations currently under OIRA review relate only to non-AEWR provisions of the July 2019 proposed rules that modernize the H-2A program.
Checkpoint will provide updates on the latest developments on these rules.
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