The Department of Labor is working on a new independent contractor rule and is seeking input from employers and workers. The US Supreme Court issued a unanimous decision that raised the issue as to what are the requirements to waive an arbitration agreement in an employment case. The OSHA Assistant Secretary detailed the activities and priorities of OSHA in testimony before a congressional subcommittee and the IRS is increasing the standard mileage rate used to calculate the deductible costs of operating an automobile for business by 4 cents.
DOL Planning to Issue Independent Contractor Rule – Jessica Looman, Acting Administrator, Department of Labor’s Wage and Hour Division announced that the Labor Department plans to engage in rulemaking to determine whether individuals are employees or independent contractors under the Fair Labor Standards Act (FLSA). She stated that the Labor Department remains “committed to ensuring that employees are recognized correctly when they are, in fact, employees so that they receive the protections the FLSA provides. At the same time, we recognize the important role legitimate independent contractors play in our economy.”
She advised that the Labor Department had delayed in March 2021 and then in May 2021 withdrew the independent contractor rule issued by the previous administration. In March 2022, a district court vacated the Department’s actions to delay and withdraw the rule resulting in the rule issued by the prior administration going into effect retroactively on March 8, 2021. The District Court ruling is currently on appeal to the US Court of Appeals for the Fifth Circuit.
The Labor Department wants to hear from employers and workers as they develop the regulatory proposal. They have scheduled two public forums this month to hear from those who might be affected by the rule. The employer forum is scheduled for June 24, 2022, from 2:30 p.m. – 4:30 p.m. EDT and anyone interested in participating can register. The worker forum will be held on June 29, 2022, from 5:00 p.m. – 7:00 p.m. EDT and those interested are invited to register. When the proposed rule is finalized, it will be published in the Federal Register with a notice and comment period that will allow interested individuals the opportunity to submit comments.
Showing of Prejudice Not Required in Waiver of Arbitration Case – The United States Supreme Court issued a unanimous decision in the case of Robyn Morgan v. Sundance, Inc. ruling that a finding of prejudice against the plaintiff is not required to waive an arbitration requirement in an employment case. According to Justice Kagan who wrote the court’s decision, “a court must hold a party to its arbitration contract just as the court would to any other kind. But a court may not devise novel rules to favor arbitration over litigation.”
Robyn Morgan was an hourly employee at a Taco Bell franchise owned by Sundance, Inc. When applying for the job, she signed an agreement to “use confidential binding arbitration, instead of going to court,” to resolve any employment dispute. Despite that agreement, Morgan brought a nationwide action against Sundance in federal court for violations of the Fair Labor Standards Act (FLSA). She alleged that Sundance violated the FLSA’s overtime rules. The employer initially defended the lawsuit as if no arbitration agreement existed. Nearly eight months after the filing of the lawsuit, Sundance moved to stay the litigation and compel arbitration based on the Federal Arbitration Act.
The 8th Circuit found that a party waives its contractual right to arbitration if it knew of the right, acted inconsistently with that right, and “prejudiced the other party by its inconsistent actions.” The Supreme Court accepted the case to resolve a split among the judicial circuits, with eight circuits, agreeing with the 8th Circuit that the strong federal policy favoring arbitration as set forth in the Federal Arbitration Act required a showing of prejudice against the other party to waive the arbitration agreement, while 2 other circuits rejected this requirement. The Supreme Court concluded that the waiver of an arbitration right doesn’t require a showing of prejudice. In remanding the case to the 8th Circuit, the Supreme Court said it should determine whether Sundance knowingly relinquished the right to arbitrate by acting inconsistently with that right.
OSHA Official Testifies on Its Activities – Douglas Parker, Assistant Secretary, Occupational Safety and Health Administration (OSHA) testified on OSHA activities and priorities recently. The Subcommittee on Workforce Protections of the House Committee on Education and Labor held the hearing. He stated, “Our goal at OSHA is to align this most basic and fundamental shared value – our health and safety and that of our families – with the core values of every workplace in America, and to ensure we are equitable and inclusive and reaching and protecting all workers in our efforts.”
Mr. Parker advised that OSHA is working to finalize a permanent COVID-19 standard for health care workers and has undertaken 1,826 COVID-19 related inspections in health care facilities. He indicated that OSHA has an enforcement initiative to ensure that hospitals and skilled nursing facilities are ready to protect workers if there are increases in COVID-19 patients. As part of its National Emphasis Program, OSHA continues to inspect other high-risk industries and investigate COVID-related whistleblower complaints. He testified that OSHA is also developing an infectious disease standard to protect health care workers in future pandemics while developing infectious disease preparedness training for all workplaces.
He noted that OSHA also is working to develop a heat illness prevention standard. OSHA has launched a National Emphasis Program to educate employers and for the first time, is inspecting workplaces for heat hazards. He testified that another OSHA priority is developing a standard to protect health care workers from workplace violence. OSHA is also increasing its inspection and enforcement activity and he cited the approximately 17,000 construction inspections that resulted in about $138 million in penalties being assessed.
Training and compliance assistance is another priority area for OSHA according to Mr. Parker. During the last fiscal year, he reported that OSHA trained over 1.1 million workers on how to understand and prevent workplace hazards. OSHA’s on-site consultation program assists employers in establishing safety and health management programs.
IRS Increases Mileage Rate for Rest of 2022 – The Internal Revenue Service (IRS) announced an increase in the optional standard mileage rate to 62.5 cents per mile, up 4 cents per mile for the final 6 months of 2022. Announcement 2022-13 provides that taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business. The new rate for deductible medical expenses will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. These new rates, which recognize the recent increase in gas prices become effective on July 1, 2022.
Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at neilreichenberg@yahoo.com.