Business Overdrive
Jul 5, 2017


The Department of Labor sent a Request for Information (RFI) to the White House Office of Management and Budget (OMB) related to the Obama administration's overtime rule. The overtime rule would have increased the minimum salary for executive, administrative, and professional worker exemptions and was slated to take effect on December 1, 2016, before a Texas federal court delayed implementation of rule. Labor Secretary Alexander Acosta noted that the OMB request would ask the public to comment on a number of questions that would inform the department's thinking to help develop a fair overtime regulation.



The Vermont Supreme Court determined that owner of a limited liability company (LLC) can be considered an independent contractor, even when the person does not have any employees. The Vermont Department of Labor had argued that LLC owners must be considered individuals, and therefore should be considered an employee and not a contractor unless the LLC employed additional workers. Under state and federal labor laws, independent contractors are responsible for paying their own payroll taxes, such as Social Security and Medicare.



Right on cue, the DOL announced it will once again provide Opinion Letters to employers regarding specific compliance questions. Opinion Letters are official written opinions issued by the DOL's Wage and Hour Division that explain how the DOL enforces the Fair Labor Standards Act ("FLSA") in specific circumstances presented by employers, employees, or other entities requesting an Opinion Letter. Secretary Acosta's announcement is a reversal of the March 2010 position of the DOL to cease issuance of Opinion Letters. The DOL's renewal of its Opinion Letter program opens the door for employers to raise specific wage-and-hour compliance situations to the DOL and seek the DOL's opinion regarding the employer's intended approach.



And lastly this week, the Occupational Safety and Health Administration (OSHA) proposed a delay in the electronic reporting compliance date of the rule, Improve Tracking of Workplace Injuries and Illnesses, from July 1, 2017, to December 1, 2017. The proposed delay will allow OSHA an opportunity to further review and consider the rule. OSHA invites the public to comment on the proposed deadline extension. The deadline for submitting comments is July 13, 2017. We will keep working these employment stories through the second half of the year.

Legislative and Judicial Checks and Balances


The North Carolina legislature unanimously approved legislation that will shift the burden of proof to injured workers to prove that a subsequent "injury or condition" stems from a work-related accident. The bill, now headed to Governor Roy Cooper, overturns a recent decision of the North Carolina Supreme Court. Earlier this term, the North Carolina Supreme Court ruled that once an employer admits an employee is entitled to workers' compensation for injuries suffered in a work-related accident, the employer can be liable for medical issues that arise later, unless it proves those ailments didn't relate to the accident.



The Pennsylvania Supreme Court struck down part of the Keystone State's workers' compensation act, eliminating the practice of using the American Medical Association (AMA) guidelines to cap benefits paid out to severely injured workers. Previously, if a worker's impairment fell under a 50 percent threshold, the employer could reduce the payments to reflect a partial injury and cap benefits at 500 weeks. In striking the provision, the court held that the General Assembly gave the AMA unfettered control to establish employee benefits without holding hearings, accepting public comments, or explaining the grounds for its methodology in a reasoned opinion.

Making Our Way Around The Country


Employers in the Commonwealth of Virginia will now have to purchase suitably equipped automobiles for incapacitated workers. Senate Bill 1201, which goes into effect this week, requires that the employer either purchase or modify vehicles if there is a loss of function to either or both feet, legs, hands, or arms. The law caps the purchase or modifications to workers' vehicles at $42,000.



The California Division of Workers' Compensation posted a report on recommendations to prevent fraud in the workers' compensation system, issued by the RAND Corporation. Last year, the Department of Industrial Relations requested that the RAND Corporation assess medical provider fraud in the California workers' compensation system and propose a set of comprehensive and strategic policy recommendations. Three key recommended measures include: the detection of fraudulent providers through the use of advanced analytics, keeping post-employment medical treatment claims under the employer's control, and suspending lien claims for suspected fraud providers.



The Florida Division of Workers' Compensation released its 2016 edition of the Florida Health Care Provider Reimbursement Manual (HCPRM), which becomes effective this week. Among the reimbursement changes to the manual, the HCPRM now defines the dispensing of compound drugs as a "specialty service" under paragraph 440.13(3)(i) of the Florida Workers' Compensation Act. Other specialty services include specialist consultations, surgeries, and X-rays, which require preauthorization for those services if they exceed $1,000. Employers and carriers have 10 days to respond to a written request for authorization.



This week in North America we celebrated Canada Day and Independence Day, two mid-summer celebrations from the Atlantic to the Pacific and all points in between. We wish safe journeys to all of our readers who are vacationing or traveling this week. Please be alert. Risk comes in all shapes and sizes.

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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