Labor Changes
Jun 14, 2017


Labor Secretary Alexander Acosta announced the immediate withdrawal of two Obama administration legal opinions that expanded protections for workers. Both opinions broadened the definitions of employee and of a joint employer under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act.






The first opinion had directed Labor Department employees to use a broad definition of who is an employee versus who is an independent contractor.  By withdrawing the opinion, Secretary Acosta would allow companies to classify more workers as independent contractors. Those workers would then not be subject to federal wage and hour regulations and laws.



The second opinion broadened the definition of joint employer. Companies or organizations are considered joint employers if they share control over workers even if it had only indirect or unexercised control over hiring. This opinion had been a burden on the restaurant franchise industry with the uncertainty of holding one business responsible for the actions of another independent business.



Despite the Labor Department's reversal on joint employer, the Obama standard can still be applied to business. The National Labor Relations Board, an independent agency that serves as the nation’s main labor law enforcer, adopted the standard and has not rescinded its interpretation. There are two open seats on the five-member board that need to be filled by President Trump. We'll keep watch to see if this changes once new folks are on the board.

Dodd-Frank No More?


The House passed the Financial Choice Act, which seeks to undo significant parts of the 2010 Dodd-Frank financial reform law. The major highlights of the Act include an end to taxpayer bailouts of large financial institutions, reforms to the Consumer Financial Protection Bureau (CFPB), the Labor Department's fiduciary rule (which requires brokers to act in the best interest of their clients when providing investment advice about retirement), and regulatory relief for community financial institutions. 


Under the Act, the CFPB and the Federal Housing Finance Agency, which oversee mortgage giants Fannie Mae and Freddie Mac, would be restructured into an Executive Branch agency. The directors of both would become a political appointee and removable by the President. The CFPB's supervisory function would be eliminated and its authority to bring cases against financial institutions would be removed. It faces long odds in the Senate; however, some parts of the House bill could survive in some form.

Making Our Way Around The Country


The Colorado Division of Workers' Compensation (DWC) will increase the annual employer assessment to 0.7% from 0.5% beginning July 1, 2017.  The assessment pays for the cost of administering the state's workers' compensation system.  The DWC originally proposed increasing the assessment to 0.9%. The assessments to the Premium Cost Containment program and the Subsequent Injury Fund (SIF) will remain unchanged at 0.03% and 0.1% respectfully. The Premium Cost Containment program offers certified employers with a qualified risk management program in place for at least one year a 10% premium discount. The SIF is closed to workers with new injuries but maintains claims for beneficiaries who qualified before the fund was closed to new applicants.



Gov. John Bel Edwards signed three opioid bills into law to help stem the opioid epidemic gripping the nation. H.B. 192 limits first-time opioid prescriptions to seven days for acute conditions and will allow patients the option to be prescribed a smaller quantity. S.B. 55 requires a new controlled dangerous substance license from the Board of Pharmacy, which requires the prescriber to review the patient's record in the Prescription Monitoring Program (PMP) before prescribing opioid drugs and re-reviewing that record every 90 days. H.B. 490 requires the Drug Policy Board to establish an Advisory Council on Heroin and Opioid Prevention and Education. Louisiana had 861 fatal drug overdoses in 2015. 



Congrats to the Golden State Warriors on their NBA Championship win (I love Bulls alum Steve Kerr from the 90s). If you want to see some true champions, check out the scholarship winners of Kids' Chance, an organization that provides educational scholarships to children affected by a parents' work related injury or death.

About The Way

The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly.



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