Several US Department of Labor agencies have issued guidance to assist those individuals, unions, and employers affected by the most recent California wildfires. Relief efforts include a temporary exemption and waiver for federal contractors regarding written affirmative action plans and possible grace periods and other relief for employee benefit plans and service providers, among other guidance for impacted parties.
On November 20, the US Department of Labor (DOL) announced relief efforts by several DOL agencies to assist workers, unions, and employers affected by the California wildfires. “As Californians come together to help their friends, neighbors and all individuals who have been affected recover, the Department of Labor is committed to supporting the American worker,” said Secretary of Labor Alexander Acosta. Agencies aiding with relief efforts include the Office of Federal Contract Compliance Programs (OFCCP), Employee Benefits Security Administration (EBSA), Wage and Hour Division, and Office of Labor-Management Standards (OLMS), among others.
For federal contractors, the OFCCP has granted a temporary exemption and waiver of the requirement to develop written affirmative action plans. The exemption and waiver apply to new supply and service and construction contracts that specifically provide California wildfire relief. This temporary suspension applies to such contracts entered into between November 19, 2018, and February 19, 2019, but this period could be extended. The OFCCP has also posted FAQs, including information on how it will handle pending compliance evaluations in the impacted areas.
EBSA has published employee benefit plan compliance guidance and relief in recognition that the wildfires “may impede efforts by plan fiduciaries, employers, labor organizations, service providers, participants and beneficiaries to comply with the Employee Retirement Income Security Act (ERISA) over the next few months.” Relief is available for verification procedures for retirement plan hardships and loans and timely remittance of contributions and loan repayments if certain criteria are met, including that the failure to comply with requirements is solely attributable to the wildfires. Relief is also available for failure to provide advance notice for blackout periods related to the wildfires. Form 5500 Annual Return/Report filing relief is also provided.
EBSA acknowledges that plans and service providers may be unable to fully and timely comply with claims processing requirements. The agency’s enforcement approach will emphasize compliance assistance including grace periods and other relief in certain situations, such as when physical disruption to the plan’s or service provider’s principal place of business makes compliance impossible. The DOL reminds plans that they are guided by the duty to act reasonably, prudently, and in the interest of the workers and their families, and plan fiduciaries should make reasonable accommodations to prevent loss of benefits or undue delay in benefits payments.
In addition, EBSA published guidance for participants and beneficiaries, including information regarding loss or reduction of health benefits due to the physical closure of a business or death of a spouse, and addresses common COBRA continuation questions. The guidance also addresses retirement benefit situations that may arise due to the wildfires.
The DOL press release advises that “Wage and Hour is prioritizing all calls in the affected areas to continue to provide uninterrupted service to workers and employers.” Employers impacted by the wildfires should be aware that they remain subject to the Fair Labor Standards Act (FLSA) and other wage requirements, even during times of natural disasters and recovery. For example, if a business closes because of the wildfires, the employer must still pay nonexempt covered employees the minimum wage and any earned overtime for all hours worked. We recommend checking with your California state and local agencies for additional information.
The OLMS special enforcement advisory in effect for recent hurricanes also now applies to the California wildfires. The advisory temporarily eases reporting and labor union officer election requirements under the Labor-Management Reporting and Disclosure Act for labor organizations, labor relations consultants, and employers affected by the wildfires. The advisory applies to “unions, employers or labor relations consultants whose principal office is located in the affected areas or whose reportable activities occurred in those areas.” Nevertheless, affected labor unions must still make a good-faith effort to conduct elections, and labor unions, consultants, and employers must still make a good-faith effort to file required public disclosure reports. Because OLMS does not specify what constitutes a good-faith effort in these circumstances, impacted entities should seek clarification from the agency or through counsel.
We will continue to monitor the DOL’s guidance for those impacted by the wildfires.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Kathryn T. McGuigan
Christopher A. Parlo