In August 2022, President Biden signed into law the Inflation Reduction Act of 2022. Under this law, there are increased tax benefits for certain clean energy projects that begin on or after January 29, 2023 – with a catch. Such projects must use both registered apprentices and prevailing wages (and fringe benefits)must be paid. Employers (construction companies, subcontractors) working on a clean energy project should be sure to verify whether this applies to you. The DOL has provided some general guidance here that such employers may find helpful.
Minnesota and St. Paul Minimum Wage to Increase January 1, 2023 – Mandatory Poster Updated
Minnesota employers should be sure to have an updated minimum wage poster (required), reflecting the new minimum wage ($10.59 for large employers, and $8.63 for other wages). It can be downloaded for free here. Also – don’t forget Minneapolis minimum wages are more and increase every July 1. A schedule of those wage increases can be found here. St. Paul, on the other hand, also increases their minimum wages effective January 1, 2023, which is also greater. Those rates can be found here.
DOL Comment Period Closed for Proposed New Rule Regarding Employee v Independent Contractor Classification
On October 13, 2022, the U.S. Department of Labor published a Notice of Proposed Rulemaking regarding how to determine whether an individual is an employee or independent contractor. After an extension, that comment period finally closed this week. The DOL has continued its flip-flopping on this issue. You may recall on September 22, 2020 (during the Trump administration), the DOL issued a notice of proposed rulemaking that it would adopt the economic realities test, with two core factors. I blogged about that here. In January 2021, days prior to the change of administration, the DOL issued a Final Rule, basically adopting the two “core” factor test – the nature and degree of control over the work and the individual’s ability to make or lose money based on their initiative and/or investment. Not surprisingly, a few months later, the Biden administration officially withdrew that Final Rule, which a Texas court held was unlawful, restoring it in May 2022.
Where are we today?
The latest proposed rule basically nullifies the 2021 rule, and goes back to the DOL’s position prior to the Trump administration (pre-2017) in a swift 180. The new rule states that economic dependence is the “ultimate inquiry” and whether the worker is, in economic reality, in business for themself. Don’t be fooled, however, this does not mean the amount of income earned, or if they have other income streams (according to the DOL).
The DOL’s new rule is back to looking at 6 factors as a “guide” for the “assessment of the economic realities” with no one factor dispositive – oh, and the 7th factor of a catch-all, whatever else they deem important:
- Opportunity for profit or loss depending on managerial skill.
- Investments by the worker and the employer.
- Degree of performance of the work relationship.
- Nature and degree of control.
- Extent to which the work performed is an integral part of the employer’s business.
- Skill and initiative.
- “Additional factors”.
To keep this short, I won’t get into the examples for all of the above, but the DOL’s examples make it very clear that the starting point is they are an employee until proven otherwise. And finally, my simple advice to clients remains unchanged – if it looks like a duck, quacks like a duck…it’s probably a duck.
DOL Seeking Comments on Proposed Revisions to Davis-Bacon Act Wage Survey & New Voluntary Subcontractor Survey
On June 10, 2022, the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) submitted a notice of proposed changes to its wage information collection form, WD-10, that it uses to determine prevailing wages. The WHD is also proposing a new optional form, WD-10A, which it will use before sending out the actual survey, in order to identify potential respondents who worked in the construction industry.
In other words, the new form will allow contractors to voluntarily report subcontractors with whom they’ve worked, so that the WHD can also send subcontractors the survey. This should ideally reach more non-union contractors, and thus, the rates should more closely reflect actual prevailing wages (versus union wages). Contractors have until August 10, 2022 to submit comments on the proposed notice. A summary of the changes can be found here. As always, the more non-union contractors that actually fill out and complete the survey, the better the chance that the set prevailing wage will reflect actual market (prevailing) rates.
MN DOLI Provides Home Health Care Providers With Wage Guidance Webpage
If you are a home health care provider (personal care attendants, community first service and support workers), the Minnesota Department of Labor & Industry (MNDOLI) has created a new webpage for information related to employment practices in your industry. This includes a general video on:
- Overtime (follow federal (40+ hrs/wk) and state law (48+ hrs/wk) at 1.5 times the regular rate) *Note – this is where I see the majority of violations – (and investigations) – make sure you are properly paying overtime – if you are paying a “bonus” for additional hours worked, I’d highly encourage you to have that pay practice reviewed asap.
- Minimum wage requirements
- Travel time
- Rest periods (less than 20 minutes paid)
- Payment of all hours worked (regardless of reimbursements)
- Discipline for working unauthorized overtime (but paying it)
- On-site work/rest time (sleep time – Minn. 177.23, sub.11 and Minn. Rule 5200.0121 and federal law)
- Regular payments, timely payments and final pay law
Employers should be careful to remember that this guidance is ONLY for Minnesota state law. If federal law applies to your business and is more beneficial for the employee, then federal law applies.
Frontline Worker Pay Notices Must Be Posted By June 23, 2022
Minnesota employees who are eligible for Frontline Worker Pay will be able to apply at https://frontlinepay.mn.gov starting tomorrow, June 8, 2022. That means that Minnesota employers who are in the frontline industry sector (see my previous post), must provide notice by June 23, 2022.
MNDOLI has drafted the employer notice in several languages, which you can download here. The notice must be given to each employee and/or placed where all other notices (such as your minimum wage poster) are posted. For many employers this is a breakroom, kitchen or job trailer. If you chose to provide notice to each employee, I would also recommend posting it as well, to be sure nobody is missed and/or loses the notice.
A detailed list of the industry sectors (and now with examples) can be found here.
June 23, 2022 Is Anticipated Deadline for Minnesota Frontline Worker Pay Notice
The Minnesota Department of Labor & Industry is indicating that the frontline worker pay application period will be open from June 8 to July 22, 2022. Within 15 days – June 23, 2022, employers in the applicable sectors (see my previous post) will need to post the notice. The notice will be available at frontlinepay.mn.gov when the application dates are finalized. There are also a few webinars today at 1 pm and Friday, June 3 at 3:30, and an outreach toolkit (this is NOT the employer notice). That’s all I know, folks!
Frontline Worker Pay Expected to Launch Mid-June
As promised, I’m sharing what I know. As of now, the Minnesota Department of Labor & Industry (MNDOLI) is indicating that their goal is to launch the frontline worker pay application mid-June (at which time the 45 day application period will begin). MNDOLI anticipates payments will be made late summer or early fall.
Minnesota Frontline Worker Pay – Employers Have 15 Days to Provide Notice
It’s been quiet around here (from a wage and hour standpoint) in Minnesota! I’ve had very little to blog about – no more! Governor Tim Walz recently signed a bill, Frontline Worker Payments, which will provide a payment to frontline workers up to $1,500. While the actual process is not yet up and running, once the Minnesota Department of Labor & Industry (MNDOLI) finalizes the online application system, and opens the application period, employers will have 15 days to notify all current workers that may be eligible for the payment. MNDOLI is preparing a form to be used (stay tuned). Employees will then have 45 days to apply. Once the application period closes, there will be a 15 day period for applicants to contest the decision. Once that timeframe is closed, the available money will be split equally upon the eligible applicants, in an amount not to exceed $1,500 per individual.
What are the frontline business sectors?
- Long-term and home care, health care, vocational rehabilitation
- Emergency responders
- Child care, schools
- Food service (including production, processing, preparation, sale and delivery)
- Retail (including sales, fulfillment, distribution and delivery)
- Temporary shelters and hotels
- Building services, including maintenance, janitorial and security
- Ground and air transportation services, public transit
Which employees are eligible within the frontline sector?
- Must have worked at least 120 hours between March 15, 2020 and June 30, 2021 AND unable to telework AND worked in close proximity to others (not in your household).
- Must have an annual income of less than $185,000 for married taxpayers filing jointly, or $85,000 for all others if the occupation does not have COVID-19 patient care responsibilities.
- Must have an annual income of less than $350,000 for married taxpayers filing jointly, or $175,000 for all others if the occupation had direct COVID-19 patient responsibilities.
- Must not have received unemployment for more than 20 weeks on a cumulative basis between March 15, 2020 and June 26, 2021.
So, for now this is just a heads-up. I’ll certainly post more as the process develops. Again, employers will only have 15 days to provide notice to employees, so you’ll want to be sure to keep your eyes out!
DOL Announces First Major Revisions to Davis-Bacon Act in 40 Years
Today, March 11, 2022, the U.S. Department of Labor (DOL) announced its notice of proposed rulemaking (NPRM) that seeks to update the Davis-Bacon and Related Acts (DBA). This NPRM is the first major revision to the DBA in over 40 years.
I’ll provide a more comprehensive blog soon of how this is going to affect employers (I’ve got to read the over 400 pages), but here’s what the DOL is highlighting in the changes (all of which result in increased prevailing wages):
- Prevailing wage rates will increase, to “keep up with actual wages”.
- Return to pre-1983 definition of “prevailing wage”.
- Wage determinations will be periodically updated (note, some states’ little DBA already do this).
- Allows contracting agency to adopt state or local wage determinations.
- Will allow for supplemental rates for key job classifications when there is no survey data.
- Regulatory language will be updated to reflect modern construction practices.
- “Strengthen worker protections and enforcement, including debarment and anti-retaliation.
Also, employers should keep in mind that this is not law yet, it is just a NPRM, which is the first step the DOL must take to attempt to change the regulations.