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One of the watermelon research projects conducted primarily through funding from the National Watermelon Association has been completed by Matthew Cutulle at Clemson University.  The study, ‘Improving Watermelon Plant Establishment and Resistance to Soil Borne Diseases’, had two primary objectives:

            1: Determine if watermelon variety and SC-27 inoculation influences plant vigor and stem lengths.

2: Determine if watermelon variety and SC-27 inoculation influence Fusarium oxusporum(FON) Race 1 and Race 2.

Click HERE to review the findings of the project
 

Produce Safety Immersion Program

NWA Members:  Our friends at United Fresh announced the launch of the Produce Safety Immersion Program, a year-long experience for up to 20 individuals with less than 5 years in produce safety.  Maybe they have worked in produce, but not the safety side, or maybe they have done food safety, but not with produce.  The program will blend hands-on experiences, webinars, and mentoring to build the technical and critical thinking skills to be successful in this discipline.  Applications are due by Nov 1.  If you are interested in applying, please contact the NWA for more details and help with the application process.  CLICK HERE for more information.

https://www.unitedfresh.org/events-programs/produce-safety-immersion-program/

 

 

Improving Watermelon Plant Establishment and Resistance to Soil Borne Diseases

One of the watermelon research projects conducted primarily through funding from the National Watermelon Association has been completed by Matthew Cutulle at Clemson University.  The study, ‘Improving Watermelon Plant Establishment and Resistance to Soil Borne Diseases’, had two primary objectives:

  1. Determine if watermelon variety and SC-27 inoculation influences plant vigor and stem lengths.
  2. Determine if watermelon variety and SC-27 inoculation influence Fusarium oxusporum(FON) Race 1 and Race 2.

Click HERE to review the findings of the project.    

 

Breaking: USDOL Releases Overtime Rule 2.0 For 2020

The suspense is over – the Department of Labor just this morning announced the revised Overtime Rule, which will set the minimum salary threshold for the Fair Labor Standard Act’s white-collar exemptions at $684 per week, or $35,568 per year. The rule, which will expand overtime pay obligations to an estimated 1.3 million additional workers, will take effect on January 1, 2020. What do you need to know about this breaking news?

Executive Summary: Proposed Rule In A Nutshell

  • The minimum salary threshold will be $684 per week, annualized to $35,568 per year.
    • The rule provides for one threshold regardless of exemption, industry, or locality, subject to a few exceptions that already existed.
    • Employers will be able to credit certain non-discretionary payments in limited ways.
  • The highly compensated employee exemption’s additional total annual compensation requirement will be set at $107,432 per year.
  • No changes will be made to the duties tests – the crux of the relevant exemptions.
    • The changes are limited to the executive, administrative, professional, and highly compensated employee exemptions.
    • No change has been made to the various other exemptions (for example, outside sales) that do not specifically include a salary requirement even if the employee happens to earn a salary.
  • There will be no “automatic” updates, or even a formal schedule of future adjustments to these figures.
    • However, you can expect that the salary threshold will be assessed more frequently than it has been in the past, but hopefully not so often that it essentially drives the market.

A Brief History Of The Overtime Rule Saga

It seems an eternity ago when President Obama directed the U.S. Department of Labor (USDOL) to revise the regulations governing the outdated white-collar exemptions of the Fair Labor Standards Act (FLSA). The proposal eventually released by the USDOL would have radically altered the federal compensation rules. Most notably, the agency would have more than doubled the salary threshold and applied, essentially, a formula to update the amount every three years. This minimum threshold was set to become effective on December 1, 2016, and the “updating” would begin, ironically, on January 1, 2020.

But concerned states and business groups sought to block the rule from taking effect, and, at the last minute, a federal court issued a preliminary injunction preventing the rule from being implemented on a nationwide basis. Since the Texas court put the final nail in Overtime Rule 1.0’s coffin by striking down the rule once and for all in August 2017, employers have been patiently awaiting a revised rule.

Under the current administration, USDOL leadership indicated that it would no longer advocate for the $913 per week proposal but would instead undertake further rulemaking to determine what the salary level should be. In what seemed like a painstakingly long process, the agency held public forums, issued a request for information, and sought comments on a proposed rule that, like Overtime Rule 1.0, focused solely on the pay component but without completely overshadowing the duties tests. After all, the FLSA authorizes the agency to define and delimit the executive, administrative, and professional exemptions – not supplant them. Today, finally, all of the work culminated in the release of Overtime Rule 2.0.

Will This Rule Survive?

After the drama surrounding the last-minute injunction blocking the 2016 proposal, it would be natural for employers to feel gun-shy about adjusting to these changes. After all, isn’t there a chance that another court will once again block these changes and put us in yet another state of limbo? While there is always a chance for litigation to unfold in such a way that it would impact the implementation of this rule, there are several reasons why you should be preparing as if this rule will go into effect as planned on January 1, 2020.

First, while there is no magic number for setting the salary threshold (that's the whole point), there is something to be said for certainty. The new rule skirts some of the more problematic areas that existed with the first attempt at revisions. The $684 per week threshold will require the reclassification (or pay increases) of some employees, but a far less significant portion than would have seen increases had the $913-per-week proposal of three years ago was adopted. 

Second, while the rule contains some of the same flaws as Overtime Rule 1.0, they generally are not the kinds of concerns that were previously raised in lawsuits. Employer advocates will have more difficulty taking the position that this particular threshold eclipses the duties tests. Likewise, while employee advocates might feel that the threshold is set at too low a level, meeting the pay component does not make someone exempt in and of itself, so this argument is more philosophic in nature and may not warrant the rule being blocked.

Finally, the USDOL must be well prepared at this point to defend the rule. Even aside from the litigation, it has received voluminous public feedback on an increase from $455 per week numerous times, including those shared in 20152017, and 2018. So, while litigation seems inevitable, employers should not be idle in preparing for this rule to take effect.

Avoiding The Last-Minute Panic

As recounted above, the drama surrounding Overtime Rule 1.0 was a painfully long process for employers as they waited to see what might happen. The best practice, though, is to assume Overtime Rule 2.0 is the real thing. That said, you should not run out tomorrow and make immediate changes to your compensation structure. Instead, you should use this time to start evaluating not just whether changes will be necessary, but how best to make those changes (timing, communications, etc.).

If you made changes in 2016 in anticipation of the $913 per week threshold, you are certainly ahead of the curve. If you did some of the work but decided to wait to implement once the preliminary injunction was put in place, you also have a great head start. Nonetheless, in both cases, you must keep in mind that three years have passed and it is possible that an employee’s work has changed in the interim. 

It is imperative to confirm your prior findings at least for any employee that might receive a salary increase to qualify for exempt status under Overtime Rule 2.0. No employee is automatically entitled to be treated as exempt; in contrast, increasing the salary for an employee that does not meet the duties tests can only make matters worse.

Right now, you should be:

  • Analyzing whether those exemptions you have been relying upon will still apply;
  • Considering the possible application of alternative FLSA exemptions; and
  • Developing FLSA-compliant pay plans for employees who have been treated as exempt but who no longer will be.

The USDOL released extensive commentary explaining its rationales for the revised provisions. We are continuing to study the final regulations and accompanying discussion carefully and will offer further considered views, so you should ensure you are subscribed to Fisher Phillips’ alert system to gather the most up-to-date information, and follow our Wage And Hour Blog to see our latest commentary.

Contact your Fisher Phillips attorney, or any member of our Wage and Hour Practice Group, for materials and other guidance as you consider what steps to take.

 

Breaking The ICE: How Employers Can Push Back Against Punitive I-9 Fines

Climate change may make our summers hotter, but the ICEman still cometh. Since late 2017, Immigration and Customs Enforcement (ICE) has significantly increased the number of Notices of Inspections issued to employers nationwide. This spike in I-9 audits has also resulted in an increase in assessed civil penalties and punitive fines to employers with non-compliant I-9s. While ICE audits and fines are on the rise, this article will walk you through options to assist with breaking the ICE and decreasing assessed fines.  

What Employers Can Expect In 2019 Through The Election

If your business has not yet had an ICE I-9 Notice of Inspection, consider yourself lucky. However, if you think you are in the clear – think again. In the upcoming election year where politics will be dominated by immigration news, ICE will continue to punish employers for failures to complete I-9s properly and maintain a culture of immigration compliance. Driven by a “zero-tolerance” agenda, ICE will likely push for higher penalty amounts, and have less interest in coming to a reasonable settlement amount with most employers.

ICE assesses penalties after an employer receives a Notice of Inspection and ICE completes its I-9 audit; after that, an employer may receive a Notice of Intent to Fine (NIF). This document title speaks for itself – ICE intends to fine the company a dollar amount.

After receiving a NIF, you have two options: (1) request a hearing before the Office of Chief Administrative Hearing Officer (OCAHO); or (2) agree to pay the fine assessed by ICE. Below we will walk you through these two options and the financial impact each can have on your business.

How OCAHO Can Affect Penalty Amounts 

OCAHO sits within the Executive Office of Immigration Review of the Department of Justice, where traditionally an Administrative Law Judge (ALJ) is assigned to adjudicate I-9 penalty hearings. The ALJ follows the same statutory regulations that ICE is required to follow, which includes the following five statutory factors to determine penalty amount: (1) the size of the employer’s business, (2) the employer’s good faith, (3) the seriousness of the violations, (4) whether or not the individual was an unauthorized alien, and (5) the employer’s history of previous violations.

Although the OCAHO ALJ and ICE follow the same five factors in determining penalty amount, the ALJ is not bound by ICE fine amounts. Instead, the ALJ has discretionary authority in considering a company’s financial situation when determining the fine amount. This flexible discretion can impact fine amounts dramatically.

ICE “Fine Matrix” Calculating Penalty Amounts

ICE follows a “fine matrix” – entirely an ICE invention and a ridged matrix tying base fine amounts to the violation percentage. The violation percentage is broken into six levels, with the highest base fine amount when a company’s violation percentage reaches 50 percent (meaning 50 percent or more of an employer’s I-9s were found to be deficient).  

Next, ICE utilizes its “enhancement matrix,” which will either add or decrease to the base fine based upon its audit findings. The aggravating and mitigating factors are the five statutory factors discussed above: business size, good faith, seriousness, unauthorized aliens, and company history. Each of these five factors has a plus or minus five percent (+/- 5 %) to the base fine amount, making the maximum increase +25 % and the maximum decrease -25%

Unlike OCAHO, ICE does not consider the company’s ability to pay or financial health when assessing fine amounts. Therefore, this ridged formula almost always leads to a hefty fine determination because it artificially inflates the base fine amount. ICE has traditionally demonstrated little interest in whether the fine proposal may have a devastating effect on the company. On the other hand, OCAHO ALJs regularly hold that the I-9 penalty should not be unduly punitive.

A Fine Calculation Example

Let’s assume your company received a Notice of Inspection, then presented 100 I-9 forms to ICE for inspection. During the audit, ICE determined that 50 of the forms presented were defective due to sustentative and uncorrected technical violations (uncorrected errors on the form itself). This would result in your company having a 50 percent violation rate. Using ICE’s fine matrix, it would calculate the fine using the highest base fine amount of $1,862 per defective I-9. Therefore, you would be facing a base fine already at $93,100 before factoring the aggravating and mitigation factors.

After ICE takes into account the aggravating and mitigating factors, the final fine amount will stand somewhere between $69,825 (base fine -25%) and $116,375 (base fine +25%).    

This simple example demonstrates how ICE’s unforgiving fine matrix artificially inflates the fine amount by setting the 50 percent violation rate as the threshold for the highest fine amount for each defective I-9 form. Even if your business has less than 100 employees, a small amount of defective I-9s can result in a hefty fine proposal.  

OCAHO ALJ Fine Determination History

Unlike ICE, however, OCAHO case law indicates that the ALJ’s fine determination has been far more lenient than ICE’s fine matrix and enhancement matrix. In fact, in a review of the 32 OCAHO I-9 cases from the past four years, not a single OCAHO fine determination resulted in a fine increase. Of the 32 cases, only two cases upheld ICE’s fine proposal without reduction. The other 30 cases allreceived a fine reduction, with the average fine reduction rate at over 40%. By way of example, in the simple example above with your company being assessed a fine from ICE of $116,375, an average OCAHO reduction could reduce this fine to $69,231.

In the most recent 2019 OCAHO case, U.S. v. Intelli Transport Services, the ALJ primarily used the employer’s small size to justify a nearly 80% fine reduction, which reduced the fine amount from ICE’s $21,506 proposal to a mere $4,500. In another 2015 OCAHO case, the dollar amount fine reduction was over $207,000. These cases demonstrate that when ICE’s fine proposal is high enough, there is truly little reason not to push back and litigate the case to the OCAHO.

Conclusion

While many attorneys have negotiated with ICE, few have experience with OCAHO and litigation strategies around reducing ICE proposed fines. If you have questions about ICE, OCAHO, and litigation strategies to “break the ICE,” please contact any member of our firm’s experienced Global Immigration Practice Group or your Fisher Phillips attorney.

For more information, contact the authors at RHua@fisherphillips.com (206.247.7014) orLSobaski@fisherphillips.com (816.460.1237).

 
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