DOL Withdrawal
MEMORANDUM
To: AHC Organizations
From: American Horse Council
Re: DOL Withdraws Interpretation – Employers may be Liable for H-2A and H-2B Relocation Expenses
Date: March 30, 2009
Introduction
In another action involving the rolling-back of a position taken by the Bush Administration, the Obama Department of Labor (DOL) has withdrawn a DOL interpretation of the Fair Labor Standards Act (FLSA) concerning relocation expenses incurred by H-2A and H-2B workers in order to give it “further consideration.” During the period of reconsideration, employers may no longer rely on it. The interpretation withdrawn was promulgated by the Bush administration when new regulations governing the H-2A and H-2B temporary worker programs were enacted last December.
The change could impact horse owners, breeders, trainers, horse shows and others who employ foreign workers under the H-2A and H-2B temporary worker programs and are not now paying the costs of bringing these foreign workers to the U.S.
FSLA Interpretation
Last December DOL changed the H-2A and H-2B temporary worker rules. As part of that rulemaking, DOL also issued an explanation of how the agency would interpret, and therefore enforce, the FLSA regarding whether employers were responsible for paying the transportation expenses of foreign workers coming to the U.S. to work. DOL ruled that the FLSA and the regulations thereunder “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.” The expenses involved the costs of travel from an employee’s country of origin to the United States.
In adopting the rules in December, DOL concluded that the Eleventh Circuit’s decision and the district court decisions “were wrongly decided and that inbound travel expenses of H-2B workers do not primarily benefit their employers” and therefore did not have to be paid.
In announcing the change in policy, the Obama DOL said that the previous interpretation conflicted with earlier court decisions that had held that the FLSA required employers to pay transportation from Mexico to the U.S. and visa costs for workers under the H-2A program because such costs were primarily for the employer’s benefit because they were necessary and incident to the employment of such workers. Arriaga v. Florida Pacific farms, L.L.C., 305 F.3d 1228 (11th Cir.2002) Several U.S. District Courts extended the Arriaga decision to the H-2B program.
What Now
The withdrawal of the relocation expense interpretation means that employers can no longer rely on it and assume they are not responsible for these relocation expenses.
In announcing the change, DOL said that it would reconsider the interpretation and offer further guidance to employers at a later date. During this reconsideration period, employers may not rely upon the prior interpretation and should consult their advisors regarding how to handle relocation expenses for aliens admitted to the U.S. as H-2As and H-2Bs.
If you have any questions, please contact the AHC.
To: AHC Organizations
From: American Horse Council
Re: DOL Withdraws Interpretation – Employers may be Liable for H-2A and H-2B Relocation Expenses
Date: March 30, 2009
Introduction
In another action involving the rolling-back of a position taken by the Bush Administration, the Obama Department of Labor (DOL) has withdrawn a DOL interpretation of the Fair Labor Standards Act (FLSA) concerning relocation expenses incurred by H-2A and H-2B workers in order to give it “further consideration.” During the period of reconsideration, employers may no longer rely on it. The interpretation withdrawn was promulgated by the Bush administration when new regulations governing the H-2A and H-2B temporary worker programs were enacted last December.
The change could impact horse owners, breeders, trainers, horse shows and others who employ foreign workers under the H-2A and H-2B temporary worker programs and are not now paying the costs of bringing these foreign workers to the U.S.
FSLA Interpretation
Last December DOL changed the H-2A and H-2B temporary worker rules. As part of that rulemaking, DOL also issued an explanation of how the agency would interpret, and therefore enforce, the FLSA regarding whether employers were responsible for paying the transportation expenses of foreign workers coming to the U.S. to work. DOL ruled that the FLSA and the regulations thereunder “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.” The expenses involved the costs of travel from an employee’s country of origin to the United States.
In adopting the rules in December, DOL concluded that the Eleventh Circuit’s decision and the district court decisions “were wrongly decided and that inbound travel expenses of H-2B workers do not primarily benefit their employers” and therefore did not have to be paid.
In announcing the change in policy, the Obama DOL said that the previous interpretation conflicted with earlier court decisions that had held that the FLSA required employers to pay transportation from Mexico to the U.S. and visa costs for workers under the H-2A program because such costs were primarily for the employer’s benefit because they were necessary and incident to the employment of such workers. Arriaga v. Florida Pacific farms, L.L.C., 305 F.3d 1228 (11th Cir.2002) Several U.S. District Courts extended the Arriaga decision to the H-2B program.
What Now
The withdrawal of the relocation expense interpretation means that employers can no longer rely on it and assume they are not responsible for these relocation expenses.
In announcing the change, DOL said that it would reconsider the interpretation and offer further guidance to employers at a later date. During this reconsideration period, employers may not rely upon the prior interpretation and should consult their advisors regarding how to handle relocation expenses for aliens admitted to the U.S. as H-2As and H-2Bs.
If you have any questions, please contact the AHC.
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