Wilson Elser Alert: USDOL proposed revisions under Fair Labor Standards Act

Excerpt from legal brief by MTAC Partner Wilson Elser.

On March 7, 2019, the Department of Labor (Department) announced a proposed rule that would make more than a million more workers in the United States eligible for overtime. The Department seeks to update and revise regulations set forth under the Fair Labor Standards Act (FLSA) implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, professional, outside sales, and computer employees. This proposed changed would raise the current-enforced salary level for exemption, and as a result, would extend overtime protection to more workers.

Background of FLSA

Under the current Department regulations, most white-collar employees—such as executives and supervisors—are exempt from the FLSA rules and are not paid overtime for workweeks in which they work more than 40 hours if they satisfy two conditions: (1) they must perform what the Department has deemed as “exempt” duties; and (2) they must receive a salary below $455 per week ($23,660 annually). Workers making at least this salary are eligible for overtime based on their particular job duties. The proposed rule focuses on the minimum salary requirement.

This proposal comes more than two years after a federal judge granted a nationwide injunction to prevent the Department’s 2016 salary threshold from taking effect. In May 2016, the Department issued a rule increasing the standard salary level, which was declared invalid by the United States District Court for the Eastern District of Texas, and is being held in abeyance on appeal with the United States Court of Appeals for the Fifth Circuit. Following this, the Department collected comments from the public on changes to the salary requirements.

Proposed Changes

The Department proposes to rescind the 2016 rule in three major ways. First, the new rule seeks to update the minimum weekly salary “to reflect growth in wages and salaries, and allow the inclusion of certain nondiscretionary bonuses and incentive payments to count towards up to ten percent of the standard salary level.” The Department’s proposal would extend the standard salary level for overtime to $679 per week—or $35,308 annually. Overtime eligibility above this salary level would be based on the employee’s job duties.

The complete legal brief from Wilson Elser is available online.

Carbon tax testimony

This week, MTAC President Joe Sculley submitted testimony in opposition to a bill that would establish a carbon tax in Connecticut. His testimony stated that he used information from ATA and ATRI to calculate potential costs to the CT trucking industry.

In the testimony, he referenced an explanation from ATA which said, “If transportation fuels were to be assessed a $10/metric tonne carbon tax, gasoline and diesel costs would increase by $.09/gallon and $.10/gallon respectively; at a $50/metric tonne tax, gasoline and diesel fuel costs would increase by $.46/gallon and $.51/gallon respectively. At a tax rate of $100/metric tonne of carbon, consumer fuel prices would increase by $.89/gallon and $1.01/gallon for gasoline and diesel respectively.”

Separately, the American Transportation Research Institute (ATRI) estimates that the average 18-wheel tractor trailer uses about 16,000 gallons of diesel fuel each year.

Based on those numbers, below is a table showing what cost increases could be in store for Connecticut-based small business trucking companies if this bill passes.

A copy of MTAC’s testimony is available here.

Recreational marijuana legalization testimony

This Friday, March 22, MTAC President Joe Sculley will testify on legislation to legalize recreational marijuana. Written testimony has already been submitted, which states, in part:

MTAC is not necessarily opposed to the legalization of recreational marijuana. However, Commercial Driver’s License holders operating Commercial Motor Vehicles (CMVs) are required by federal regulation to be tested for controlled substances (drugs and alcohol), per 49 CFR Part 382 – CONTROLLED SUBSTANCES AND ALCOHOL USE AND TESTING. This will still be the case even if Connecticut legalizes recreational marijuana.

Commercial truck drivers based in Connecticut who are required to obtain a Commercial Driver’s License will still be subject to all of the following testing, even if Connecticut legalizes recreational marijuana:

  • Pre-employment drug testing
  • Random testing
  • Post-accident drug testing (if applicable)
  • Reasonable suspicion testing (if applicable)
  • Return to duty testing (if applicable)
  • Follow up testing (if applicable)

The testimony also called for protections for employers. Accordingly, employers should not be penalized by the state in any way if they are forced to take action against an employee for simply acting in accordance with federal regulations. Any legislation to legalize recreational marijuana should, at a minimum, refer to federal regulations and provide protection for the employer who complies as required.

Click here to see a copy of the complete testimony.

Tolls, like income tax, will hurt Connecticut economy

HBJ Op Ed by MTAC President Joe Sculley.

They say those who do not study history are doomed to repeat it.

Everyone in Connecticut should study history of the creation of the state income tax, because the state appears on track to being doomed to repeat a bad decision by implementing tolls.

When the income tax was being debated, it was pitched as the only way to restore fiscal stability. Since the new income tax would be created, significant sales-tax cuts were promised, and the sales tax rate was cut to 6 percent. That rate is currently 6.35 percent, but an increase to 7 percent is now on the table. Additionally, the initial income tax rates have also increased since its inception.

Now, tolls are up for debate and are being pitched as the only way to secure revenue for the Special Transportation Fund. There are token offers to slightly cut fuel taxes in exchange for tolls. Tolls inherently increase once they go up, so we know that creation of tolls will be just like creation of the income tax. Once it’s there, the rates will only increase.

On the off chance that fuel tax rates are actually cut in conjunction with tolls, I’d be willing to bet that fuel tax rates would find their way back up, just like the sales tax rate has following creation of the income tax.

I will never forget the night I was at a forum held at the UConn Law School about three years ago, when a legislative leader from 1991 bluntly admitted that the idea of a spending cap was only floated to secure votes for the income tax. The income tax was passed, but legislative language implementing a spending cap was not put in place for more than 25 years. The spending cap was essentially meaningless, but it helped push through the income tax.

See the complete Op Ed in the Hartford Business Journal online.

Paine readies garbage-disposal business for next generation as he trashes tolls

From Hartford Business Journal.

In its early days, Paine’s Inc. Recycling and Rubbish Removal had a different idea of waste-to-energy.

“When my grandfather started the business, he picked up garbage from two private schools, and fed it to the pigs at the family farm,” said the trash-hauler’s current owner, Michael Paine, of the company circa 1929. “Here we are now, nearly 90 years later, talking about organic collection from homes.”

In addition to switching to swine-free disposal methods, the company has ballooned in size and influence since Paine started working at the family business in the early 1970s. The current fleet of 53 trucks dwarfs the company’s disco-era count of four, and at the beginning of this year Paine began his first term as chairman of the Motor Transport Association of Connecticut (MTAC), which represents companies with commercial vehicles traveling state roads.

His timing for stepping up on the MTAC pedestal coincides with Gov. Ned Lamont laying the groundwork for tolling Connecticut’s highways, an initiative Paine says is short-sighted and informed by flawed logic. It would also cost his company more money.

Read the full article at the Hartford Business Journal website.

FMCSA resources for CDL drug and alcohol clearinghouse

From FMCSA.

The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) today released additional online resources for Commercial Driver’s License (CDL) holders, employers, state driver licensing agencies, medical review officers, and substance abuse professionals regarding the upcoming implementation of its CDL Drug and Alcohol Clearinghouse in January 2020.

The new clearinghouse resource webpage provides commercial motor vehicle (CMV) stakeholders with a variety of informative resources about the clearinghouse, including a comprehensive fact sheet, implementation timeline, frequently asked questions, and more. Additionally, CMV stakeholders can sign-up to receive clearinghouse-related email updates as the implementation progresses.

“As this Congressional mandate is enacted, FMCSA’s goal is to provide as many resources and updates as possible to those who will be using the upcoming Drug and Alcohol Clearinghouse. As we transition to the use of the clearinghouse, we will ensure drivers, employers, and state licensing agencies are kept up-to-date throughout the implementation process. FMCSA is here to be helpful and to assist all CMV stakeholders who have questions regarding the Drug and Alcohol Clearinghouse,” said FMCSA Administrator Raymond P. Martinez.

The clearinghouse will be a secure online database that will allow FMCSA, CMV employers, State Driver Licensing Agencies, and law enforcement officials to identify – in real-time – CDL drivers who have violated federal drug and alcohol testing program requirements, and thereby improve safety on our nation’s roads.

More information available at the  FMCSA’s new Drug and Alcohol Clearinghouse resource website.

Connecticut carbon tax legislation

From Connecticut Energy Marketers Association (CEMA).

On Monday, March 18, the Environment Committee will hold a public hearing on a bill that would impose a tax on fossil fuels sold in the state: Raised Bill 1064, An Act Establishing a Carbon Price for Fossil Fuels Sold in Connecticut.

Heating oil, propane, diesel, gasoline and even natural gas and electricity would all be subject to the tax if it passes.

The cost of diesel for trucks will go up 16.8 cents per gallon in the first year, costing about $490 per truck, increasing to about $2000 per truck by 2030.

The tax on gasoline will be 14.7 cents per gallon in year one costing you an additional $96.43; 34.3 cents per gallon in year five costing you $225.016, and 58.8 cents per gallon in year 10 costing you $385.73.

Visit the Stop the Carbon Tax website for more information.

Does Connecticut need a transportation authority?

From CT News Junkie.

As the legislature gets closer to approving tolls, it’s also distancing itself from the process by debating legislation that would create a transportation authority, like the Metropolitan Transportation Authority.

“I don’t understand why anyone wants to be like the MTA in New York,” Joe Sculley, president of the Motor Transport Association of Connecticut, told the Transportation Committee Monday. “They have sky-high tolls … and they’re $38 billion in debt.”

Sculley was testifying on a bill that would “create an authority dedicated to overseeing and prioritizing transportation projects.”

Rep. Roland Lemar, D-New Haven, said the bill was added to Monday’s public hearing agenda because Monday was their deadline to have a hearing on proposed bills. He said the concept is also included in other bills that more directly deal with revenue ideas like tolls to fund improvements to Connecticut’s roads, bridges, and rail.

Sculley said if these transportation authorities are so great, then how come none of them have any money?

He also asked why the state of Connecticut would want to “abdicate” all its control to an unelected board that’s going to establish tolls on almost every highway in the state?

“This is worse than just tolls,” Sculley said. “If people want tolls, then put up a tolls bill and just vote for it, don’t try to go through this quasi-government body.”

See the complete story from CT News Junkie online.

Transportation authority debate sets stage for larger battle coming on highway tolls

From Hartford Courant.

A public hearing Monday on a bill to create a state transportation authority served as a warmup for a much bigger hearing coming this week on the divisive topic of electronic highway tolls.

The state’s truckers’ association believes the authority would be a front for tolls. A key legislator said that is not the case. But the battle over tolls is expected to continue Wednesday before a large crowd at the state Capitol when a public hearing is held on the two main toll bills of the legislative session.

“I think the only reason for this bill is for tolls,” Joseph R. Sculley, executive director of the Motor Transport Association of Connecticut, said at Monday’s hearing. “I’m not exaggerating when I say that running tolls through this unaccountable, quasi-government body would be a step worse than adding tolls and running them through [the state department of transportation]. It’s not good either way. But when you set it up so that blame can be deflected … I just can’t believe that most people in the state of Connecticut would want something like that.”

Sculley said other authorities, like the Metropolitan Transportation Authority in New York, had not set good examples.

See the complete article from the Hartford Courant online.