The OFCCP Week in Review (WIR) is a simple, fast and direct summary of relevant happenings in the OFCCP regulatory environment, authored by experts John C. Fox, Candee Chambers and Jennifer Polcer. In today’s edition, they discuss:
Tuesday, June 19, 2018: “Joint-Employer” Made Headlines Outside of NLRB
It is the term we have come to love to hate, “Joint-Employer.” What is it? How it is defined? The answer, of course, is that it depends…
The definition has flipped and flopped several times over the past few years. We have followed this conundrum as outlined here:
- Joint-Employer Standard – Back to Browning-Ferris Test (Feb 2018)
- Joint-Employer Standard Reinstated (Dec 2017)
- New “codetermination” legal standard for joint employment (Sept 2015)
The term made headlines again, but not in a battle under the Nation Labor Relations Act or the Fair Labor Standards Act as you have come to expect. This time we hear it from the Employee Benefits Security Administration. A final Rule made changes to the Employee Retirement Income Security Act (ERISA) and specifically calls out the term “joint-employer.”
The Rule establishes additional criteria for determining when employers may join together in a group to provide a group health care plan for employees. Understandably this raises the question of potentially triggering joint employer status. Several franchise associations spoke up to this effect, and as a result, there is an entire section dedicated to this subject.
The Bottom Line
The Association Health Plan (AHP) regulation states, “nothing in the final rule is intended to indicate that participating in an AHP sponsored by a bona fide group or association of employers gives rise to joint employer status under any federal or state law, rule, or regulation.” It goes on to address independent contractors, specifically stating in the Rule that businesses do not become employers “merely by participating in an AHP with those independent contractors.”
The News Release
The Rule “is also an acknowledgment the Department of Labor recognizes the importance of providing clear rules for employers on joint employment,” International Franchise Association President and CEO Robert Cresanti said in a prepared statement. “We applaud Secretary Acosta for creating certainty for franchise owners when providing their employees with quality, affordable health insurance.”
Thursday, June 21, 2018: Proposed Merger of U.S. DOL and U.S. DOE
In response to EO 13781, which calls for a comprehensive plan to reorganize the Executive Branch of the Government, the White House released, “Delivering Government Solutions in the 21st Century – Reform Plan and Reorganization Recommendations.”
This report outlines the Administration’s analysis and recommendations for structural realignment of the Executive Branch in an effort to “better serve the mission, service, and stewardship needs of the American people.” This 132-page plan organizes changes into the following four categories:
- Mission Alignment Imperatives (18 Proposals)
- Organizational Realignments to Enhance Mission and Service Delivery
- Changes to Refocus, Reduce, or Expand the Mission
- Management Improvement Opportunities/ Proposals to Enhance Efficiency (8 Proposals)
- Transformation Urgency: New Capability Requirements (6 Proposals)
- Organizations in Alignment (34 Proposals)
Listed as #1 under the Organizational Realignments to Enhance Mission and Service Delivery is the proposal to merge of the Departments of Education and Labor into a single Cabinet agency, the Department of Education and the Workforce. This agency would meet the needs of American students and workers from education and skill development to workplace protection to retirement security. As part of the merger, the Administration also proposes significant Government-wide workforce development program consolidations, streamlining separate programs in an effort to increase efficiencies.
Summary of Proposed Merger
It would consist of four main sub-agencies:
- Higher Education/Workforce Development
- New: American Workforce and Higher Education Administration (AWHEA) would ensure that American workers possess the skills necessary to succeed in the workforce.
- Would include worker protection agencies from DOL that are responsible for enforcing statutes relating to workers’ pay, safety, benefits, and other protections, as well as Federal workers’ compensation programs. The Agency would also include ED’s Office of Civil Rights, which is responsible for ensuring equal access to education through enforcement of civil rights in the nation’s K-12 school and higher education institutions. The DOL agencies represent more than half of DOL’s workforce as measured in full-time equivalents (FTEs), mostly comprised of field enforcement staff. In the new DEW, all of these agencies would report to one senior official.
- OFCCP would land here.
Not going to happen. This is a long-shot proposal facing a lot of opposition. Like the merger of the EEOC and the OFCCP, this is not the first time a merger involving the Department of Education has circulated. The early 80’s saw an attempt when President Ronald Regan took office and another in the mid-1990’s when Congress flipped to Republican control.
THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.
John C. Fox, Esq. is President and Partner at Fox, Wang & Morgan P.C. where he represents companies and tries cases in state and federal courts throughout the United States. Mr. Fox has extensive trial experience, having spent more than 300 days in trial. Mr. Fox was also lead trial counsel in the first of the six wage-hour class actions known to have been tried in California and was lead trial counsel in what are believed to have been the two largest disability law suits in the United States. He is an across-the-board employment lawyer representing management nationwide. Full Bio »