The Washington Report
April 03, 2019
Legislative/Executive
House Passes Paycheck Fairness Act
On March 27, 2019, the House approved with a 242–187 vote the Paycheck Fairness Act (H.R. 7). According to the news release, the bill would “strengthen and close loopholes in the Equal Pay Act of 1963 by holding employers accountable for discriminatory practices, ending the practice of pay secrecy, easing workers’ ability to individually or jointly challenge pay discrimination, and strengthening the available remedies for wronged employees.” Historically, this is the third time the bill has been passed by the House. The bill moves to the Senate for consideration.
The news release is available here.
The full text of H.R. 7 is available here.
Health
Federal Judge Strikes Down Final Regulations on AHPs
On March 28, 2019, a federal judge struck down final regulations on Association Health Plans (AHPs). For additional information about this ruling, please refer to the Aon bulletin U.S. District Court Strikes Down AHP Regulations under Publications.
Other HR/Employment
DOL Publishes Proposed Rule on Regular Rate Requirements
On March 28, 2019, the Department of Labor (DOL) announced a proposed rule to amend 29 CFR Part 778 to clarify and update regular rate requirements under Section 7(e) of the Fair Labor Standards Act (FLSA). The FLSA generally requires overtime pay of at least one and one-half times the regular rate of pay for hours worked in excess of 40 hours per workweek. Regular rate requirements define what forms of payment employers include and exclude in the “time and one-half” calculation when determining workers’ overtime rates. Under current rules, employers are discouraged from offering more perks to their employees as it may be unclear whether those perks must be included in the calculation of an employees’ regular rate of pay. The proposed rule focuses primarily on clarifying whether certain kinds of perks, benefits, or other miscellaneous items must be included in the regular rate.
The DOL proposes clarifications to the regulations to confirm that employers may exclude the following from an employee’s regular rate of pay:
- the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services;
- payments for unused paid leave, including paid sick leave;
- reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
- reimbursed travel expenses that do not exceed the maximum travel reimbursement permitted under the Federal Travel Regulation System regulations and that satisfy other regulatory requirements;
- discretionary bonuses;
- benefit plans, including accident, unemployment, and legal services; and
- tuition programs, such as reimbursement programs or repayment of educational debt.
The proposed rule also includes additional clarification about other forms of compensation, including payment for meal periods, “call back” pay, and others. Comments on the proposed rule are due by May 28, 2019.
The news release is available
here.
The proposed rule is available
here.
A fact sheet is available
here.
Frequently Asked Questions are available
here.
Additional information (including other resources) is available
here.
DOL Issues Proposed Rule on Joint Employer Arrangements
On April 1, 2019, the DOL announced a proposed rule to revise and clarify the responsibilities of employers and joint employers to employees in joint employer arrangements. The FLSA allows joint employer situations where an employer and a joint employer are jointly responsible for the employee’s wages. The rule would ensure employers and joint employers clearly understand their responsibilities to pay at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 in a workweek.
In 2017, the DOL withdrew the previous administration’s sub-regulatory guidance regarding joint employer status. That guidance did not go through the rulemaking process that includes public notice and comment. The DOL proposes a clear, four-factor test that would consider whether the potential joint employer actually exercises the power to:
- hire or fire the employee;
- supervise and control the employee’s work schedules or conditions of employment;
- determine the employee’s rate and method of payment; and
- maintain the employee’s employment records.
The proposed rule also includes a set of examples for comment that would further help to clarify joint employer status.
This proposed rule has been submitted to the Office of the Federal Register for publication. The public will have 60 days to comment on the proposed rule; the comment period will begin on the date of publication in the Federal Register.
The news release is available here.
The proposed rule is available here.
A fact sheet is available here.
Frequently Asked Questions are available here.
Additional information (including other resources) is available here.
Aon Publications
U.S. District Court Strikes Down AHP Regulations
A United States District Court in New York State v. U.S. Department of Labor struck down the U.S. Department of Labor’s final regulations permitting small employers and individuals to band together to form association health plans (AHPs), which would then qualify for treatment as large employer group health plans under ERISA and the Affordable Care Act (ACA).
The AHP rules were one of three sets of regulations proposed last year by various government agencies pursuant to an Executive Order signed in 2017 by President Trump. The district court held that the AHP rules were “unreasonable interpretations of ERISA” that attempted “to end run the requirements of the ACA [by] ignoring the language and purpose of both ERISA and the ACA.”
The Aon bulletin, which provides a brief overview of the ruling, is available here.
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