[Federal Register Volume 74, Number 57 (Thursday, March 26, 2009)]
[Notices]
[Pages 13261-13262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6623]
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DEPARTMENT OF LABOR
Employment and Training Administration
Wage and Hour Division
Withdrawal of Interpretation of the Fair Labor Standards Act
Concerning Relocation Expenses Incurred by H-2A and H-2B Workers
AGENCY: Employment and Training Administration, Department of Labor in
concurrence with the Wage and Hour Division, Employment Standards
Administration, Department of Labor.
ACTION: Notice of withdrawal of interpretation.
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SUMMARY: The Department of Labor (DOL or the Department) withdraws for
further consideration an interpretation of the Fair Labor Standards Act
(FLSA) published on December 18 and 19, 2008. The interpretation, which
was published at 73 FR 77148-52 (H-2A program) and 73 FR 78039-41 (H-2B
program), articulated an opinion that the FLSA and its implementing
regulations do not require employers to reimburse workers under the H-
2A and H-2B nonimmigrant visa programs, respectively, for relocation
expenses even when such costs result in the workers being paid less
than the minimum wage. This interpretation is hereby withdrawn for
further consideration by the Department and may not be relied upon as a
statement of agency policy.
DATES: Effective Date: March 26, 2009.
FOR FURTHER INFORMATION CONTACT: Richard Brennan, Director of Office of
Interpretations and Regulatory Analysis, Wage and Hour Division,
Employment Standards Administration, U.S. Department of Labor, 200
Constitution Avenue, NW., Room S-3506, Washington, DC 20210; Telephone
(202) 693-0051 (this is not a toll-free number). Individuals with
hearing or speech impairments may access the telephone numbers above
via TTY by calling the toll-free Federal Information Relay Service at
1-800-877-8339.
SUPPLEMENTARY INFORMATION: The Fair Labor Standards Act (FLSA), 29
U.S.C. 201 et seq., requires covered employers to pay their nonexempt
employees a federal minimum wage and overtime premium pay of time and
one-half the regular rate of pay for hours worked in excess of 40 in a
week. The agency responsible for administration of the FLSA is the Wage
and Hour Division, Employment Standards Administration, of the
Department of Labor. The FLSA and its regulations prohibit an employer
from either deducting from an employee's pay or imposing an expense
upon an employee for costs that are primarily for the benefit of the
employer, if to do so results in an employee receiving less than the
minimum wage. 29 U.S.C. 203(m); 29 CFR part 531. Thus, during the first
workweek, workers must be compensated at a rate that would bring their
wages up to minimum wage, taking into account pre-employment expenses
that primarily benefit the employer. In Arriaga v. Florida Pacific
Farms, L.L.C., 305 F.3d 1228 (11th Cir. 2002), the U.S. Court of
Appeals for the Eleventh Circuit held that, under the FLSA regulations,
the transportation from Mexico to Florida and visa costs of temporary
nonimmigrant workers coming to the U.S. under the H-2A visa program,
see 8 U.S.C. 1101(a)(15)(H)(ii)(a), were primarily for the grower's
benefit because such costs were necessary and incident to the
employment of such workers. A number of U.S. district courts have
extended the Arriaga holding regarding the FLSA requirements to
temporary nonimmigrant workers admitted into the U.S. under the H-2B
visa program, 8 U.S.C. 1101(a)(15)(H)(ii)(b). See, e.g., De Leon-
Granados v. Eller & Sons Trees Inc., 2008 WL 4531813 (N.D. Ga., Oct. 7,
2008); Rosales v. Hispanic Employee Leasing Program, 2008 WL 363479
(W.D. Mich. Feb. 11, 2008); Rivera v. Brickman Group, 2008 WL 81570
(E.D. Pa. Jan. 7, 2008); Recinos-Recinos v. Express Forestry Inc., 2006
WL 197030 (E.D. La. Jan. 24, 2006); but see Castellanos-Contreras v.
Decatur Hotels LLC, No. 07-30942 (5th Cir. Feb. 11, 2009), pet. for
reh'g filed (Mar. 11, 2009), rev'g, 488 F. Supp. 2d 565 (E.D. La.
2007).
On December 18, 2008, DOL published final regulations revising the
procedures for the issuance of labor certifications to employers
sponsoring H-2A nonimmigrants for admission to perform temporary
agricultural labor or services and the procedures for enforcing
compliance with attestations made by those employers. 73 FR 77110. The
H-2A Final Rule became effective on January 17, 2009. The preamble
accompanying the H-2A Final Rule included a discussion of the Arriaga
issue, concluding that the Eleventh Circuit's decision was wrongly
decided and that inbound travel expenses of H-2A workers do not
primarily benefit their employers. 73 FR 77148-52. DOL characterized
this discussion as an interpretation of the FLSA, 73 FR 77151, and did
not seek public comment on the issue when it issued the H-2A Notice of
Proposed Rulemaking, 73 FR 8538 (Feb. 13, 2008). Prior to the issuance
of the preamble discussion, courts uniformly had held that relocation
expenses were primarily for the benefit of employers.
On December 19, 2008, DOL published final regulations revising the
procedures for the issuance of labor certifications to employers
sponsoring H-2B nonimmigrants for admission to perform temporary
nonagricultural labor or services and the procedures for enforcing
compliance with attestations made by those employers. 73 FR 78019. The
Final Rule became effective on January 18, 2009. The preamble
accompanying the Final H-2B Rule included a discussion of the Arriaga
issue, concluding that the Eleventh Circuit's decision and the district
court
[[Page 13262]]
decisions that followed its reasoning in the H-2B context were wrongly
decided and that inbound travel expenses of H-2B workers do not
primarily benefit their employers. 73 FR 78039-41. DOL characterized
this discussion as an interpretation of the FLSA, 73 FR 78041, and did
not seek public comment on the issue when it issued the H-2B Notice of
Proposed Rulemaking, 73 FR 29941 (May 22, 2008). Prior to the issuance
of the preamble discussion, courts uniformly had held that relocation
expenses were primarily for the benefit of employers.
This matter concerns important issues as to whether various pre-
employment expenses incurred by workers lawfully may result in workers'
weekly wages being reduced below the minimum wage. Because of the reach
of FLSA coverage, any interpretation of FLSA regulations has wide-
ranging effects; the interpretation of section 203(m) of the FLSA and
its regulations in the preamble of the H-2A and H-2B Final Rules may
have ramifications well beyond the workers and employers subject to the
H-2A and H-2B rules. Indeed, the H-2A and H-2B preamble interpretation
of the FLSA is not codified in any regulatory requirement set out in
the H-2A and H-2B rules, and DOL did not seek public comment on the
issue from the H-2A and H-2B regulated communities. DOL is especially
sensitive to potential adverse impacts an interpretation, which was
included in the preamble in order to state a policy position of the
prior Administration, might have on our Nation's most vulnerable
workers, including low-wage U.S. workers and foreign guest workers. For
these reasons, DOL believes that this issue warrants further review.
Consequently, in accordance with authority granted under the FLSA, 29
U.S.C. 203(m) and 259, as well as the INA, 8 U.S.C.
1101(a)(15)(h)(ii)(a), 1101(a)(15)(h)(ii)(b), 1103(a)(6), 1184(c),
1188; 8 CFR 214.2(h); and 20 CFR 655.50(a), DOL withdraws the FLSA
interpretation at 73 FR 77148-52 and at 73 FR 78039-41 for further
consideration and the interpretation may not be relied upon as a
statement of agency policy for purposes of the Portal-to-Portal Act, 29
U.S.C. 259 or otherwise.\1\ After reconsideration of this issue, DOL
will provide the public with interpretive guidance through a mechanism
established for disseminating the Department's opinions and
interpretations of the FLSA.
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\1\ On March 17, 2009, DOL proposed to suspend the H-2A Final
Rule. 74 FR 11408. The proposed suspension is open to public
comment, but regardless of the outcome of the notice of proposed
rulemaking, the Department withdraws for further consideration the
interpretation of the FLSA that appeared in the preamble to the H-2A
Final Rule.
Signed in Washington, DC, this 20th day of March 2009.
Douglas F. Small,
Deputy Assistant Secretary, Employment and Training Administration.
Shelby Hallmark,
Acting Assistant Secretary, Employment Standards Administration.
[FR Doc. E9-6623 Filed 3-25-09; 8:45 am]
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