When the Federal Government brags about cutting spending, check your pockets. What is given from one hand tends to be taken by the other. Let's take time to re-examine existing proposals that could increase the employer cost of doing business.
There has been no further action by the Department of Labor on the status of RIN 1235-AA04 as of today. The regulatory tweak to require all employer exempt determinations to be documented and communicated to the subjects and the record retained for examination is still held under the “long term action” category. Any change on this would be signaled by a notice in the Federal Register. A Notice of Proposed Rule Making (NPRM) then triggers a 60 to 90 day comment period before DOL reacts.
There is action on RIN 1235-AA05, dealing with domestics employed as companions, as reported in the December publication of the Agenda. That NPRM was in a prior Federal Register. Comments were collected; then the comment period was extended a year ago so with an effective deadline for comments now shown as 4/00/13. It seems to focus more or less on retaining exemptions for personal friends but denying it for employees of home-care services.
A number of other separate initiatives on worker misclassification are also being pursued. One deals with whether contractors are really employees. Keep a close eye on that one, because someone in D.C. is thinking long term.
A Worker Classification Survey has been commissioned, probably to generate buzz about the evils of status quo employer practices. Challenges to contractor status have major implications due to the impending implementation of the healthcare reform act with its requirements and penalties dealing with the health benefits companies provide to employees. Some companies have simply declared workers to be contractors and thus washed their hands of responsibility for their overtime and health care. Continued attempts by companies to carve out overtime-eligible non-exempts or workers with potentially high benefit costs from employee status by hiding them under contractor status could be blocked. Closing the contractor escape route assures that employers will continue to pay for health care and exposes them to substantial fines and severe penalties as well. Keeping medical benefit costs as an employer duty rather than a government obligation may be essential to assure the actuarial survival of PPACA.
In addition, OFCCP’s recent abandonment of their prior guidance communications adds more confusion to employers struggling to decipher discrimination rules.
Despite the regular impressions of chaos in Washington DC, nothing happens there without a reason.
E. James (Jim) Brennan is Senior Associate of ERI Economic Research Institute, the premier publisher of interactive pay and living-cost surveys. Semi-retired after over 40 years in HR corporate and consulting roles throughout the U.S. and Canada, he’s pretty much been there done that (articles, books, speeches, seminars, radio/TV, advisory posts, in-trial expert witness stuff, etc.), and will express his opinion on almost anything.
Creative Commons image "U.S. Capital" by cliff1066
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