83 FR 48537 - Minimum Wage for Contractors; Updating Regulations To Reflect Executive Order 13838
DEPARTMENT OF LABOR
Office of the Secretary Federal Register Volume 83, Issue 187 (September 26, 2018)
Office of the Secretary
Federal Register Volume 83, Issue 187 (September 26, 2018)
| Page Range | 48537-48542 | |
| FR Document | 2018-20757 |
[Federal Register Volume 83, Number 187 (Wednesday, September 26, 2018)] [Rules and Regulations] [Pages 48537-48542] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-20757] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF LABOR Office of the Secretary 29 CFR Part 10 RIN 1235-AA27 Minimum Wage for Contractors; Updating Regulations To Reflect Executive Order 13838 AGENCY: Wage and Hour Division, Department of Labor. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: In this final rule, the Department of Labor (the Department) implements Executive Order (E.O.) 13838, issued on May 25, 2018. E.O. 13838 exempts certain contracts with the Federal Government from the requirements of E.O. 13658. In particular, the E.O. exempts contracts in connection with both seasonal recreational services and also seasonal recreational equipment rental when such services and equipment are offered to the general public on Federal lands. E.O. 13838 amends E.O. 13658 by inserting two sentences into that order and also directs executive departments and agencies to promptly implement the exemption. In order to carry out that directive, this rule inserts the same two sentences into the Department's regulations. DATES: Effective September 26, 2018. FOR FURTHER INFORMATION CONTACT: Melissa Smith, Director, Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210, telephone: (202) 693-0406 (this is not a toll- free number) or email: [email protected]. SUPPLEMENTARY INFORMATION: I. Background E.O. 13658, titled ``Establishing a Minimum Wage for Contractors,'' was issued on February 12, 2014. See 79 FR 9849. E.O. 13658 raised the hourly minimum wage for certain workers performing work on covered Federal contracts to $10.10 per hour in 2015, with annual inflation- based adjustments thereafter as determined by the Secretary of Labor (Secretary). Id. As of January 1, 2018, the E.O. 13658 minimum wage rate is $10.35 per hour. As of January 1, 2019, the E.O. 13658 minimum wage will be $10.60 per hour. See 83 FR 44906.\1\ --------------------------------------------------------------------------- \1\ For tipped employees performing work on or in connection with covered contracts, E.O. 13658 established a different minimum wage, which is currently $7.25 per hour and will increase to $7.40 per hour beginning January 1, 2019. Id. --------------------------------------------------------------------------- E.O. 13658 and its implementing regulations established that this minimum wage requirement applies only to a ``new contract'' that qualifies as: (A) A procurement contract for construction covered under the Davis-Bacon Act (DBA); (B) a contract for services covered under the McNamara-O'Hara Service Contract Act (SCA); (C) a contract for concessions, including any concessions contract that the Department's regulations at 29 CFR 4.133(b) exclude from the SCA; or (D) a contract with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public. Further, this minimum wage requirement applies only when the Fair Labor Standards Act (FLSA), the SCA, or the DBA governs the workers' wages. The October 7, 2014 final rule implementing E.O. 13658 applied to covered workers of contractors providing seasonal recreational services or seasonal recreational equipment rental on Federal lands under covered contracts. On May 25, 2018, President Donald J. Trump issued E.O. 13838, titled ``Exemption from Executive Order 13658 for Recreational Services on Federal Lands.'' See 83 FR 25341. Section 2 of E.O. 13838 amended E.O. 13658 to add language providing that the provisions of E.O. 13658 do ``not apply to federal contracts or contract-like instruments'' entered into ``in connection with seasonal recreational services or seasonal recreational equipment rental.'' The E.O. additionally stated that seasonal recreational services include ``river running, hunting, fishing, horseback riding, camping, mountaineering activities, recreational ski services, and youth camps.'' E.O. 13838 further specified that this exemption does not apply to ``lodging and food services associated with seasonal recreational activities.'' E.O. 13838 explained that because of the nature of the industry, seasonal recreational workers have ``irregular work schedules, a high incidence of overtime pay, and an unusually high turnover rate.'' The order further explained that implementing E.O. 13658, therefore, threatened to significantly increase the cost of seasonal recreational services on Federal lands, while limiting the hours that recreational- service workers would be available to work. Thus, exempting these services from E.O. 13658 would help prevent job losses and ensure affordable guided tours for visitors to Federal lands. E.O. 13838 requires executive departments and agencies to ``promptly [[Page 48538]] take appropriate action to implement this exemption and to ensure that [their] regulations and agency guidance are consistent'' with the E.O. II. Basis and Purpose A. Basis The Department is updating 29 CFR 10.4 to conform to the requirements of E.O. 13838. The President issued E.O. 13838 pursuant to his authority under the Constitution and the Federal Property and Administrative Services Act (Procurement Act). 83 FR 25341. The Procurement Act authorizes the President to ``prescribe policies and directives that [the President] considers necessary to carry out'' the statutory purposes of ensuring ``economical and efficient'' government procurement and administration of government property. 40 U.S.C. 101, 121(a). The Secretary has delegated his authority to implement E.O. 13658, and hence E.O. 13838, to the Administrator of the WHD. See Secretary's Order 01-2014 (Dec. 19, 2014), 79 FR 77527 (published Dec. 24, 2014). B. Purpose The Department is promulgating this final rule to implement E.O. 13838's exemption for seasonal recreational services and equipment rental. This action makes no substantive changes to E.O. 13658 or its implementing regulations beyond what E.O. 13838 addresses, as E.O. 13838 itself modified E.O. 13658 and directed Federal agencies and departments to implement that exemption. This action conforms E.O. 13658's implementing regulations with the requirements of E.O. 13838. This will help ensure that parties contracting with the Federal Government are aware of the scope of coverage under E.O. 13658, as amended by E.O. 13838. III. Discussion of the Final Rule To incorporate E.O. 13838 into existing regulations, the Department is amending 29 CFR 10.4 to add a new subsection (g), containing language identical to that which E.O. 13838 inserted into E.O. 13658. New 29 CFR 10.4(g) will reflect that the requirements of E.O. 13658 no longer apply to special-use permits or similar instruments issued by the U.S. Forest Service or other Federal agencies for seasonal recreational outfitter services, seasonal recreational guide services, and other seasonal recreational services, or to permits or instruments issued for seasonal recreational equipment rental. Consistent with the instruction in E.O. 13838, new 29 CFR 10.4(g) does not limit E.O. 13658's coverage of lodging and food services associated with seasonal recreational services, even when seasonal recreational services or seasonal recreational equipment rental are also provided under the same contract. Thus, when a contract contains both exempt and covered services--say, services for equipment rental and also services for food and lodging--E.O. 13658 will continue to apply to the covered services (i.e. the contractor minimum wage would apply to the positions in food service and lodging, but not to the positions in equipment rental). In such circumstances, the E.O. minimum wage contract-clause in appendix A of 29 CFR part 10 should therefore be included in all covered contracts and solicitations for such contracts, as described in 29 CFR 10.3. In these instances, the contracting agency, in consultation with the contractor and WHD as needed, shall identify which services are covered and which are exempt from the requirements of E.O. 13658. E.O. 13838 and new 29 CFR 10.4(g) do not affect the Department's implementation, administration, or enforcement of the Final Rule implementing E.O. 13658 with respect to any contracts other than those exempted in whole or in part from coverage under E.O. 13838 and 29 CFR 10.4(g). They likewise do not affect contracting agencies' implementation and administration of E.O. 13658 and its implementing regulations with respect to any contract other than those specifically described in E.O. 13838. E.O. 13838 and new 29 CFR 10.4(g) also do not limit or otherwise modify a contractor's obligations under the FLSA, SCA, DBA, or any other law. For example, as reflected in 29 CFR 10.26(c), the requirements of E.O. 13658 do not limit or otherwise modify a contractor's payroll and recordkeeping obligations, if any, under the FLSA, SCA, or DBA, or their implementing regulations. E.O. 13838 and 29 CFR 10.4(g) therefore do not exempt a contractor who is subject to the exemption, established by E.O. 13838 and by 29 CFR 10.4(g), from the requirements of the FLSA, SCA, DBA, or any other applicable law. IV. Administrative Procedure Act The Department promulgates this final rule without notice or an opportunity for public comment because this action is limited to implementing E.O. 13838 by inserting into the Department's regulations the identical language that E.O. 13838 inserted into E.O. 13658. The Administrative Procedure Act (APA) provides that the notice-and-comment procedure does not apply when an agency for good cause finds that it is ``impracticable, unnecessary, or contrary to the public interest.'' 5 U.S.C. 553(b)(3)(B). Notice and comment are ``unnecessary,'' within the meaning of the APA, when changes to regulations ``merely restate'' the changes in the enabling authority that they implement.\2\ Gray Panthers Advocacy Cmt. v. Sullivan, 936 F.2d 1284, 1291 (D.C. Cir. 1991). In other words, the normal ``notice-and-comment procedures'' are not required when an agency ``reiterates'' an existing requirement by ``reprinting'' that requirement in its own regulations. Komjathy v. Nat'l Transp. Safety Bd., 832 F.2d 1294, 1297 (D.C. Cir. 1987). --------------------------------------------------------------------------- \2\ Although a separate provision dispenses with notice and comment for matters relating to public contracts, 5 U.S.C. 553(a)(2), the Department generally does not rely on that provision, 29 CFR 2.7. --------------------------------------------------------------------------- Here, the Department for good cause finds that notice and comment are unnecessary because this rule updates the October 7, 2014, regulation to conform with E.O. 13838 by inserting into the regulation the identical language that E.O. 13838 inserted into E.O. 13658. Thus, the rule is merely restating the changes to the enabling authority-- E.O. 13658--that these regulations implement. E.O. 13838 requires agencies ``to implement [its] exemption and to ensure that all applicable regulations and agency guidance are consistent with [the E.O.],'' and the Department lacks the discretion to deviate from this directive. The Department has explained that in this circumstance, it ``may not, in response to public comment, change or decline to implement [an] amendment'' to an executive order. 68 FR 56392 (Sept. 30, 2003). Indeed, it has promulgated final rules without notice and comment in similar situations. See, e.g., Affirmative Action Obligations of Government Contractors, 68 FR 56392 (Sept. 30, 2003) (adding religious exemption into regulations by ``simply incorporat[ing]'' language from executive order in regulations). The Department accordingly finds that notice and comment are ``unnecessary'' under the APA. Additionally, this rule is effective on the date of publication because the standard 30-day delay does not apply when a rule recognizes an exemption or relieves a restriction. 5 U.S.C. 553(d)(1). This final rule establishes no new burdens on the regulated community; rather it relaxes an existing restriction. The Department has explained that, under the APA, when a rule ``relieves [[Page 48539]] present restrictions, delay in its effective date is excused by 5 U.S.C. 553(d)(1).'' 33 FR 8542 (June 11, 1968); see also 45 FR 35325 (May 27, 1980). The Department has followed this interpretation on numerous occasions, having rules become effective upon issuance when they recognized an exemption to a generally applicable duty or relieved a regulated community of a restriction. See, e.g., Cranes and Derricks in Construction, 82 FR 51986 (Nov. 9, 2017); Employment of Homeworkers in Certain Industries, 49 FR 11792 (Mar. 27, 1984); Farm Labor Contractor Registration, 45 FR 25323 (May 27, 1980); Procedures for Consolidation of Existing Exclusively Recognized Units, 40 FR 50714 (Oct. 31, 1975); Federal Extension Service Exemption, 33 FR 8542 (June 11, 1968). Because this rule relieves the regulated community of a compliance duty, a 30-day delay is unnecessary and the rule is effective upon issuance. In short, the rule promulgated today adds into the Department's regulations the identical text that E.O. 13838 inserted into E.O. 13658. This action recognizes an exemption to E.O. 13658's requirements for certain contracts. In this circumstance, issuance of the rule without notice and comment is proper, as is the rule's effectiveness upon publication. V. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., and its attendant regulations, 5 CFR part 1320, require the Department to consider the agency's need for its information collections and their practical utility, as well as the impact of paperwork and other information collection burdens imposed on the public, and how to minimize those burdens. The PRA typically requires an agency to provide notice and seek public comments on any proposed collection of information contained in a rule. See 44 U.S.C. 3506(c)(2)(B); 5 CFR 1320.8. This rule does not contain a collection of information subject to Office of Management and Budget (OMB) approval under the Paperwork Reduction Act. VI. Analysis Conducted in Accordance With E.O. 12866, Regulatory Planning and Review, and E.O. 13563, Improved Regulation and Regulatory Review A. Introduction Under E.O. 12866, OMB's Office of Information and Regulatory Affairs determines whether a regulatory action is significant and, therefore, subject to the requirements of the E.O. and OMB review.\3\ Section 3(f) of E.O. 12866 defines a ``significant regulatory action'' as an action that is likely to result in a rule that: (1) Has an annual effect on the economy of $100 million or more, or adversely affects in a material way a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities (also referred to as economically significant); (2) creates serious inconsistency or otherwise interferes with an action taken or planned by another agency; (3) materially alters the budgetary impacts of entitlement grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O.. Because the annual effect of this rule would be less than $100 million, this rule would not be economically significant under section 3(f) of E.O. 12866. --------------------------------------------------------------------------- \3\ 58 FR 51735 (Sept. 30, 1993). --------------------------------------------------------------------------- E.O. 13563 directs agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; that it is tailored to impose the least burden on society, consistent with achieving the regulatory objectives; and that, in choosing among alternative regulatory approaches, the agency has selected the approaches that maximize net benefits. E.O. 13563 recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts. This rule is an E.O. 13771 deregulatory action. B. Economic Analysis E.O. 13658 required an increase in the minimum wage to $10.10 for workers on covered Federal contracts where the solicitation for such contracts was issued (or the contract was awarded outside the solicitation process) on or after January 1, 2015. The E.O. applied only to new contracts. Each year, pursuant to E.O. 13658, the Department adjusts this minimum wage using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). As of January 2018, the minimum wage for non-tipped covered workers on covered Federal contracts was $10.35. E.O. 13838, issued on May 25, 2018, exempts from E.O. 13658 contracts with the Federal Government in connection with seasonal recreational services or seasonal recreational equipment rental for the general public on Federal lands. E.O. 13838 directs executive departments and agencies to implement promptly the exemption. This economic analysis attempts to quantify the transfers and costs associated with the exemption from E.O. 13658 for recreational services on Federal lands, and it provides a qualitative discussion of benefits. Under E.O. 13838, exempted contractors no longer have to pay a minimum wage of $10.35; they can instead pay, at least, the higher of either the Federal minimum wage of $7.25 or any applicable state or local minimum wage. Transfers will occur when employers choose to adjust employees' wages below $10.35. C. Transfer Calculation To calculate transfers, the Department first determined the number of potential workers that E.O. 13838 could affect. There is no single source that provides data on how many workers are employed on contracts in connection with seasonal recreational services on Federal lands, so the Department relied on a variety of data sources to estimate the number of affected workers. The Department assumes that most impacted workers will fall under two Standard Occupational Classification (SOC) codes: SOC 39-7010 Tour and Travel Guides, and SOC 39-9032 Recreation Workers. The Department recognizes that impacted workers may be found in additional occupations, but this analysis is limited to these two occupations because the Department lacks more substantive data on other workers. The Department also recognizes that E.O. 13658 and E.O. 13838 do not govern all workers in these two occupations, but limiting the number of impacted workers to Federal contract workers in those occupations will help narrow the analysis to the impacted population. According to data from the Bureau of Labor Statistics (BLS) Occupational Employment Statistics (OES) program, as of May 2017, the economy had 46,140 workers employed as Tour and Travel Guides and had 352,350 workers employed as Recreation Workers--totaling 398,490 workers employed in those two occupations.\4\ These two occupations together represent approximately 0.28 percent of employment in the United States.\5\ --------------------------------------------------------------------------- \4\ BLS Occupational Employment Statistics, https://www.bls.gov/oes/2016/may/distribution.htm. \5\ May 2017 employment in all occupations was 142,549,250. BLS OES, https://www.bls.gov/oes/tables.htm. --------------------------------------------------------------------------- To estimate the total number of impacted workers, the Department also [[Page 48540]] needed to determine the number of workers carrying out Federal contracts. The Department has previously estimated that annually, 1,727,000 workers carry out Federal contracts in the four categories covered by E.O. 13658.\6\ This figure is an approximation only. The Department multiplied 0.28 percent (the occupational share) by the number of workers on covered Federal contracts to estimate the number of Federal-contract workers who are employed in connection with recreational services.\7\ The Department thus estimates that there are 4,828 workers (= 1,727,000 x 0.28%) employed on Federal contracts as outfitters, guides, and other recreational-service workers. Because about 20 percent of Federal contracts are initiated each year and because E.O. 13658 has been in effect for fewer than four years, the Department estimates that 3,862 (= 4,828 x 80%) workers will be affected by this rule. --------------------------------------------------------------------------- \6\ For a full discussion of this methodology and estimate, see https://www.federalregister.gov/documents/2016/09/30/2016-22964/establishing-paid-sick-leave-for-federal-contractors. \7\ For purposes of this analysis, the Department assumes that the occupational distribution of workers on Federal contracts is the same as in the overall economy. In reality, the occupational distribution may differ, so this number may be imprecise. --------------------------------------------------------------------------- This economic analysis attempts to calculate the total potential transfers from employees to employers when employers no longer have to pay the E.O. 13658 minimum wage, which is currently $10.35. The Department assumes that employers with contracts on Federal lands who were paying $10.35 before E.O. 13838 will now choose to pay the Federal minimum wage of $7.25.\8\ The Department assumes that employers who pay workers more than the minimum wage of $10.35 will continue paying those wages and therefore will not be affected. The analysis assumes that only those making $10.35 per hour will be affected. Because there is no easily accessible data on the exact wages of seasonal recreational employees on Federal contracts, the Department used the distribution of employment within specific wage ranges from BLS Occupational Employment Statistics to estimate the share of workers earning $10.35 or less.\9\ The Department therefore assumes that everyone making $10.35 or less is actually earning the minimum of $10.35. Using a linear approximation of the employment share earning $10.35 within the weighted wage ranges for Tour and Travel Guides and Recreation Workers occupations, the Department estimates that 30.83 percent of workers in the Tour and Travel Guides and Recreation Workers occupations earn $10.35 or less. Applying this share to the previous calculation of workers employed on Federal contracts as outfitters, guides, and other recreational-service workers, the Department estimates that 1,191 of these workers earn $10.35 per hour. --------------------------------------------------------------------------- \8\ This assumption likely significantly overstates the number of employers who, if currently paying the applicable minimum wage, would lower wages all the way to a new minimum. But the Department lacks data on which employers would pay more than $7.25 per hour if not obligated to pay $10.35. \9\ BLS OES, May 2017 National Occupational Employment and Wage Estimates United States, May 2017. https://www.bls.gov/oes/current/oes_nat.htm. --------------------------------------------------------------------------- The total value of these transfers is estimated to be the difference between $10.35 and the minimum wage for each of these workers. Because data are not available to distinguish these workers by state, the Department calculated the difference between $10.35 and the Federal minimum wage of $7.25. This transfer calculation is therefore likely to be an overestimation because some workers will earn their applicable state minimum wage (which is higher than $7.25) and because, in many other instances, contractors with contracts that are now exempt from E.O. 13658 will choose to pay these workers more than the applicable Federal or state minimum wage (though less than $10.35). Multiplying the $3.10 difference in wages by the 1,191 affected workers for 1,040 hours per year, the Department estimates that total transfers will be $3,839,784 at discount rates of both 3 percent and 7 percent.\10\ --------------------------------------------------------------------------- \10\ Full-time, year-round workers usually work around 2,080 hours. Because most affected workers are seasonal, the Department used half of this number as an estimate for usual hours-worked in a year. --------------------------------------------------------------------------- D. Costs The costs associated with this rulemaking are regulatory familiarization costs and any costs that businesses will incur to change their existing payroll systems. Regulatory familiarization costs represent direct costs on businesses associated with reviewing the new regulation. In this rule, regulatory familiarization costs are a function of the number of contractor firms, and only firms that have contracts with the Federal Government in connection with seasonal recreational services will incur costs. For this activity, the Department estimates that contractor firms will spend 15 minutes to determine whether the exemption applies to them, to evaluate and adjust their pay rates, and to modify their payroll systems. For familiarization cost analysis, the Department assumes that a Compensation, Benefits, and Job Analysis Specialist (SOC 13-1141) (or a staff member in a similar position) with a median wage of $30.14 per hour in 2017 will review the rule.\11\ Assuming benefits are paid at a rate of 46 percent of the base wage, and overhead costs are 17 percent of the base wage, the reviewer's effective hourly rate is $49.13 (= $30.14 + ($30.14 x 46%) + ($30.14 x 17%)); thus, the average cost per establishment is $12.28 (=$49.13 x .25 hour of review and adjustment time). According to the 2016 Final Rule to implement E.O. 13706, there are approximately 489,419 potentially affected contractor firms.\12\ In order to estimate the share of these contractors involved in seasonal recreational activities, the Department used the occupational employment share for Travel and Tour Guides and Recreation Workers as a proxy for contractor firm industry share. Applying the 0.28 percent share to the 489,419 contractor firms yields 1,368 contractor firms in industries related to seasonal recreational activities. The Department calculated the total estimated cost as $16,804 (=0.25 hour x $49.13/ hour x 1,368 contractor firms) in the first year. This amounts to a 10- year annualized cost of $1,913 at a discount rate of 3 percent and $2,236 at a discount rate of 7 percent. --------------------------------------------------------------------------- \11\ Compensation/benefits specialist ensures company compliance with Federal and state laws, including reporting requirements; evaluates job positions, determining classification, exempt or non- exempt status, and salary; plans, develops, evaluates, improves, and communicates methods and techniques for selecting, promoting, compensating, evaluating, and training workers. 13-1141 Compensation, Benefits, and Job Analysis Specialists, https://www.bls.gov/oes/current/oes131141.htm (last visited on June 20, 2018). \12\ This estimate includes firms registered in the General Services Administration's (GSA) System for Award Management (SAM) and from additional data sources. For a full discussion of this methodology and estimate, see https://www.federalregister.gov/documents/2016/09/30/2016-22964/establishing-paid-sick-leave-for-federal-contractors. --------------------------------------------------------------------------- E. Qualitative Discussion of Benefits Lowering the cost of business for outfitter providers could incentivize small outfitters to enter the market. Likewise, it could also incentivize existing outfitters to hire more guides and to increase the hours of current employees. What all this translates into is more affordable guided tours and recreational services for visitors to Federal lands. And ultimately, greater access to outfitter services affords ordinary Americans a greater opportunity to experience ``the great beauty of America's outdoors.'' E.O. 13838. [[Page 48541]] F. Summary of Transfers and Costs Table 1 provides a summary of the quantified transfers and costs for this rule. Table 1--Summary of Transfers and Costs Calculations ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- Potential Transfers ---------------------------------------------------------------------------------------------------------------- First Year Transfers.......................................... $3,839,784 ---------------------------------------------------------------------------------------------------------------- Discount Rate = 3% Discount Rate = 7%. ------------------------------------------------- 10-Year Annualized Transfers.................................. $3,839,784 $3,839,784 ---------------------------------------------------------------------------------------------------------------- Regulatory Familiarization and Adjustment Costs ---------------------------------------------------------------------------------------------------------------- First Year Costs.............................................. $16,804 ---------------------------------------------------------------------------------------------------------------- Discount Rate = 3% Discount Rate = 7%. ------------------------------------------------- 10-Year Annualized Transfers.................................. $1,913 $2,236 ---------------------------------------------------------------------------------------------------------------- G. Regulatory Flexibility Analysis In 2014, the Small Business Association's Office of Advocacy provided comments on the regulations implementing E.O. 13658 (Establishing a Minimum Wage for Federal Contractors). The comment letter urged the Department to adopt a regulatory alternative that exempts recreational companies and provides regulatory cost savings for small businesses. In 2018, small business stakeholders also recommended this rule for regulatory reform under E.O. 13771. Per the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (as amended), the Department examined the regulatory requirements of the rule to determine whether they would have a significant economic impact on a substantial number of small entities. As indicated in Section B, Economic Analysis, the annualized burden is estimated to be $2,236 at a discount rate of 7 percent; therefore, the annualized cost per firm is estimated to be $1.63 (= $2,236 / 1,368 firms). See Table 2. Table 2--Annualized Cost per Firm ------------------------------------------------------------------------ ------------------------------------------------------------------------ Estimated number of firms.................................... 1,368 Compensation, Benefits, and Job Analysis Specialists fully $49.13 loaded hourly compensation.................................. Time to review rule and make payroll adjustments............. * 15 Total cost................................................... $16,804 Annualized with 7% Discounting............................... $2,236 Annualized cost per firm..................................... $1.63 ------------------------------------------------------------------------ * Minutes. Table 3 provides the annualized cost per firm as a percentage of revenue by firm size in the arts, entertainment, and recreation industry. As the table shows, the annualized burden as a percentage of the smallest employer's revenue would be far less than 1 percent. Accordingly, the Department certifies that the rule would not have a significant economic impact on a substantial number of small entities. Table 3--Annual Cost per Firm in the Arts, Entertainment, and Recreation Industry ---------------------------------------------------------------------------------------------------------------- Annual cost per Number of Total Annual Average firm as firms number of cost per Annual receipts receipts percent employees firm per firm of receipts ---------------------------------------------------------------------------------------------------------------- Arts, Entertainment, and Recreation Industry Small Business Size Standard: $7.5 million-$38.5 million ---------------------------------------------------------------------------------------------------------------- Firms with sales/receipts/revenue 29,796 43,003 $1.63 $1,434,271,000 $48,136 0.003 below $100,000....................... Firms with sales/receipts/revenue of 46,205 177,421 1.63 11,476,438,000 248,381 0.001 $100,000 to $499,999................. Firms with sales/receipts/revenue of 16,220 161,111 1.63 11,394,483,000 702,496 0.000 $500,000 to $999,999................. Firms with sales/receipts/revenue of 12,675 260,098 1.63 19,329,326,000 1,524,996 0.000 $1,000,000 to $2,499,999............. Firms with sales/receipts/revenue of 4,776 205,728 1.63 16,246,680,000 3,401,734 0.000 $2,500,000 to $4,999,999............. Firms with sales/receipts/revenue of 1,800 126,508 1.63 10,478,303,000 5,821,279 0.000 $5,000,000 to $7,499,999............. Firms with sales/receipts/revenue of 854 78,319 1.63 6,855,951,000 8,028,046 0.000 $7,500,000 to $9,999,999............. Firms with sales/receipts/revenue of 746 94,755 1.63 8,148,731,000 10,923,232 0.000 $10,000,000 to $14,999,999........... Firms with sales/receipts/revenue of 373 58,407 1.63 5,452,457,000 14,617,847 0.000 $15,000,000 to $19,999,999........... Firms with sales/receipts/revenue of 239 46,528 1.63 4,493,765,000 18,802,364 0.000 $20,000,000 to $24,999,999........... Firms with sales/receipts/revenue of 169 36,443 1.63 3,701,048,000 21,899,692 0.000 $25,000,000 to $29,999,999........... Firms with sales/receipts/revenue of 126 34,942 1.63 3,075,728,000 24,410,540 0.000 $30,000,000 to $34,999,999........... Firms with sales/receipts/revenue of 83 22,145 1.63 2,382,282,000 28,702,193 0.000 $35,000,000 to $39,999,999........... ---------------------------------------------------------------------------------------------------------------- H. Unfunded Mandates Reform Act This rule has been reviewed in accordance with the Unfunded Mandates Reform Act of 1995 (UMRA). 2 U.S.C. 1501 et seq. For the purposes of the UMRA, this rule does not impose any Federal mandate that may result in increased expenditures by State, local, or Tribal governments, or increased expenditures by the private sector, of more than $100 million in any year. [[Page 48542]] I. Executive Order 13132 (Federalism) The Department has reviewed this rule in accordance with the Executive Order on Federalism (Executive Order 13132, 64 FR 43255, August 10, 1999). This rule does not have federalism implications as outlined in E.O. 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. J. Executive Order 13175, Indian Tribal Governments The Department has reviewed this rule under the terms of Executive Order 13175 (65 FR 67249, November 6, 2000) and determined it does not have ``tribal implications.'' The rule does not have ``substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.'' As a result, no Tribal summary impact statement has been prepared. VII. Regulatory Revision For the reasons set forth in the preamble, the Department of Labor amends part 10 of title 29 of the Code of Federal Regulations as follows: PART 10--ESTABLISHING A MINIMUM WAGE FOR CONTRACTORS 0 1. The authority citation for part 10 is revised to read as follows: Authority: 5 U.S.C. 301; section 2, E.O. 13838, 83 FR 25341; section 4, E.O. 13658, 79 FR 9851; Secretary's Order 01-2014, 79 FR 77527. 0 2. In Sec. 10.4, add paragraph (g) to read as follows: Sec. 10.4 Exclusions. * * * * * (g) Contracts in connection with seasonal recreational services and seasonal recreational equipment rental offered for public use on Federal lands. This part shall not apply to contracts or contract-like instruments entered into with the Federal Government in connection with seasonal recreational services or seasonal recreational equipment rental for the general public on Federal lands, but this exemption shall not apply to lodging and food services associated with seasonal recreational services. Seasonal recreational services include river running, hunting, fishing, horseback riding, camping, mountaineering activities, recreational ski services, and youth camps. Signed in Washington, DC, this 18th day of September. Bryan L. Jarrett, Acting Administrator, Wage and Hour Division. [FR Doc. 2018-20757 Filed 9-25-18; 8:45 am] BILLING CODE 4510-27-P
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requirement review policy citation
AdCom Systems, a.k.a. the following For all items subject to Presumption of denial ...... 81 FR 14958, 3/21/16.
two aliases: the EAR. (See § 744.11 83 FR [INSERT FR PAGE
—Sky Global Communications; and of the EAR.) NUMBER 9/26/2018].
—Sky Global Communication Systems.
Industrial City of Abu Dhabi—ICAD1,
Mussafah, Abu Dhabi, UAE; and #2
Mezzanine Level, Block 19, Sharq 40
Al Morour Street, Abu Dhabi Island,
Abu Dhabi, UAE.
* * * * * *
* * * * * * *
Dated: September 21, 2018. U.S. Department of Labor, Room S– the workers’ wages. The October 7, 2014
Richard E. Ashooh, 3502, 200 Constitution Avenue NW, final rule implementing E.O. 13658
Assistant Secretary for Export Washington, DC 20210, telephone: (202) applied to covered workers of
Administration. 693–0406 (this is not a toll-free number) contractors providing seasonal
[FR Doc. 2018–20954 Filed 9–25–18; 8:45 am] or email: WHDPRAComments@dol.gov. recreational services or seasonal
BILLING CODE 3510–33–P SUPPLEMENTARY INFORMATION: recreational equipment rental on
Federal lands under covered contracts.
I. Background On May 25, 2018, President Donald J.
DEPARTMENT OF LABOR E.O. 13658, titled ‘‘Establishing a Trump issued E.O. 13838, titled
Minimum Wage for Contractors,’’ was ‘‘Exemption from Executive Order
Office of the Secretary issued on February 12, 2014. See 79 FR 13658 for Recreational Services on
9849. E.O. 13658 raised the hourly Federal Lands.’’ See 83 FR 25341.
29 CFR Part 10 minimum wage for certain workers Section 2 of E.O. 13838 amended E.O.
performing work on covered Federal 13658 to add language providing that
RIN 1235–AA27
contracts to $10.10 per hour in 2015, the provisions of E.O. 13658 do ‘‘not
Minimum Wage for Contractors; with annual inflation-based adjustments apply to federal contracts or contract-
Updating Regulations To Reflect thereafter as determined by the like instruments’’ entered into ‘‘in
Executive Order 13838 Secretary of Labor (Secretary). Id. As of connection with seasonal recreational
January 1, 2018, the E.O. 13658 services or seasonal recreational
AGENCY: Wage and Hour Division, minimum wage rate is $10.35 per hour. equipment rental.’’ The E.O.
Department of Labor. As of January 1, 2019, the E.O. 13658 additionally stated that seasonal
ACTION: Final rule. minimum wage will be $10.60 per hour. recreational services include ‘‘river
See 83 FR 44906.1 running, hunting, fishing, horseback
SUMMARY: In this final rule, the E.O. 13658 and its implementing riding, camping, mountaineering
Department of Labor (the Department) regulations established that this activities, recreational ski services, and
implements Executive Order (E.O.) minimum wage requirement applies youth camps.’’ E.O. 13838 further
13838, issued on May 25, 2018. E.O. only to a ‘‘new contract’’ that qualifies specified that this exemption does not
13838 exempts certain contracts with as: (A) A procurement contract for apply to ‘‘lodging and food services
the Federal Government from the construction covered under the Davis- associated with seasonal recreational
requirements of E.O. 13658. In Bacon Act (DBA); (B) a contract for activities.’’
particular, the E.O. exempts contracts in services covered under the McNamara- E.O. 13838 explained that because of
connection with both seasonal O’Hara Service Contract Act (SCA); (C) the nature of the industry, seasonal
recreational services and also seasonal a contract for concessions, including recreational workers have ‘‘irregular
recreational equipment rental when any concessions contract that the work schedules, a high incidence of
such services and equipment are offered Department’s regulations at 29 CFR overtime pay, and an unusually high
to the general public on Federal lands. 4.133(b) exclude from the SCA; or (D) a turnover rate.’’ The order further
E.O. 13838 amends E.O. 13658 by contract with the Federal Government explained that implementing E.O.
inserting two sentences into that order in connection with Federal property or 13658, therefore, threatened to
and also directs executive departments lands and related to offering services for significantly increase the cost of
and agencies to promptly implement the Federal employees, their dependents, or seasonal recreational services on
exemption. In order to carry out that the general public. Further, this Federal lands, while limiting the hours
directive, this rule inserts the same two minimum wage requirement applies that recreational-service workers would
sentences into the Department’s only when the Fair Labor Standards Act
daltland on DSKBBV9HB2PROD with RULES
be available to work. Thus, exempting
regulations. (FLSA), the SCA, or the DBA governs these services from E.O. 13658 would
DATES: Effective September 26, 2018. help prevent job losses and ensure
1 For tipped employees performing work on or in
FOR FURTHER INFORMATION CONTACT: affordable guided tours for visitors to
connection with covered contracts, E.O. 13658
Melissa Smith, Director, Division of established a different minimum wage, which is Federal lands.
Regulations, Legislation, and currently $7.25 per hour and will increase to $7.40 E.O. 13838 requires executive
Interpretation, Wage and Hour Division, per hour beginning January 1, 2019. Id. departments and agencies to ‘‘promptly
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![48538 Federal Register / Vol. 83, No. 187 / Wednesday, September 26, 2018 / Rules and Regulations
take appropriate action to implement limit E.O. 13658’s coverage of lodging provides that the notice-and-comment
this exemption and to ensure that [their] and food services associated with procedure does not apply when an
regulations and agency guidance are seasonal recreational services, even agency for good cause finds that it is
consistent’’ with the E.O. when seasonal recreational services or ‘‘impracticable, unnecessary, or contrary
seasonal recreational equipment rental to the public interest.’’ 5 U.S.C.
II. Basis and Purpose are also provided under the same 553(b)(3)(B). Notice and comment are
A. Basis contract. Thus, when a contract contains ‘‘unnecessary,’’ within the meaning of
both exempt and covered services—say, the APA, when changes to regulations
The Department is updating 29 CFR
services for equipment rental and also ‘‘merely restate’’ the changes in the
10.4 to conform to the requirements of
services for food and lodging—E.O. enabling authority that they
E.O. 13838. The President issued E.O.
13658 will continue to apply to the implement.2 Gray Panthers Advocacy
13838 pursuant to his authority under
covered services (i.e. the contractor Cmt. v. Sullivan, 936 F.2d 1284, 1291
the Constitution and the Federal
minimum wage would apply to the (D.C. Cir. 1991). In other words, the
Property and Administrative Services
positions in food service and lodging, normal ‘‘notice-and-comment
Act (Procurement Act). 83 FR 25341.
but not to the positions in equipment procedures’’ are not required when an
The Procurement Act authorizes the rental). In such circumstances, the E.O. agency ‘‘reiterates’’ an existing
President to ‘‘prescribe policies and minimum wage contract-clause in requirement by ‘‘reprinting’’ that
directives that [the President] considers appendix A of 29 CFR part 10 should requirement in its own regulations.
necessary to carry out’’ the statutory therefore be included in all covered Komjathy v. Nat’l Transp. Safety Bd.,
purposes of ensuring ‘‘economical and contracts and solicitations for such 832 F.2d 1294, 1297 (D.C. Cir. 1987).
efficient’’ government procurement and contracts, as described in 29 CFR 10.3. Here, the Department for good cause
administration of government property. In these instances, the contracting finds that notice and comment are
40 U.S.C. 101, 121(a). agency, in consultation with the unnecessary because this rule updates
The Secretary has delegated his contractor and WHD as needed, shall the October 7, 2014, regulation to
authority to implement E.O. 13658, and identify which services are covered and conform with E.O. 13838 by inserting
hence E.O. 13838, to the Administrator which are exempt from the into the regulation the identical
of the WHD. See Secretary’s Order 01– requirements of E.O. 13658. language that E.O. 13838 inserted into
2014 (Dec. 19, 2014), 79 FR 77527 E.O. 13838 and new 29 CFR 10.4(g) do E.O. 13658. Thus, the rule is merely
(published Dec. 24, 2014). not affect the Department’s restating the changes to the enabling
B. Purpose implementation, administration, or authority—E.O. 13658—that these
enforcement of the Final Rule regulations implement. E.O. 13838
The Department is promulgating this implementing E.O. 13658 with respect requires agencies ‘‘to implement [its]
final rule to implement E.O. 13838’s to any contracts other than those exemption and to ensure that all
exemption for seasonal recreational exempted in whole or in part from applicable regulations and agency
services and equipment rental. This coverage under E.O. 13838 and 29 CFR guidance are consistent with [the E.O.],’’
action makes no substantive changes to 10.4(g). They likewise do not affect and the Department lacks the discretion
E.O. 13658 or its implementing contracting agencies’ implementation to deviate from this directive. The
regulations beyond what E.O. 13838 and administration of E.O. 13658 and its Department has explained that in this
addresses, as E.O. 13838 itself modified implementing regulations with respect circumstance, it ‘‘may not, in response
E.O. 13658 and directed Federal to any contract other than those to public comment, change or decline to
agencies and departments to implement specifically described in E.O. 13838. implement [an] amendment’’ to an
that exemption. This action conforms E.O. 13838 and new 29 CFR 10.4(g) executive order. 68 FR 56392 (Sept. 30,
E.O. 13658’s implementing regulations also do not limit or otherwise modify a 2003). Indeed, it has promulgated final
with the requirements of E.O. 13838. contractor’s obligations under the FLSA, rules without notice and comment in
This will help ensure that parties SCA, DBA, or any other law. For similar situations. See, e.g., Affirmative
contracting with the Federal example, as reflected in 29 CFR Action Obligations of Government
Government are aware of the scope of 10.26(c), the requirements of E.O. 13658 Contractors, 68 FR 56392 (Sept. 30,
coverage under E.O. 13658, as amended do not limit or otherwise modify a 2003) (adding religious exemption into
by E.O. 13838. contractor’s payroll and recordkeeping regulations by ‘‘simply incorporat[ing]’’
III. Discussion of the Final Rule obligations, if any, under the FLSA, language from executive order in
SCA, or DBA, or their implementing regulations). The Department
To incorporate E.O. 13838 into regulations. E.O. 13838 and 29 CFR accordingly finds that notice and
existing regulations, the Department is 10.4(g) therefore do not exempt a comment are ‘‘unnecessary’’ under the
amending 29 CFR 10.4 to add a new contractor who is subject to the APA.
subsection (g), containing language exemption, established by E.O. 13838 Additionally, this rule is effective on
identical to that which E.O. 13838 and by 29 CFR 10.4(g), from the the date of publication because the
inserted into E.O. 13658. New 29 CFR requirements of the FLSA, SCA, DBA, or standard 30-day delay does not apply
10.4(g) will reflect that the requirements any other applicable law. when a rule recognizes an exemption or
of E.O. 13658 no longer apply to special- relieves a restriction. 5 U.S.C. 553(d)(1).
use permits or similar instruments IV. Administrative Procedure Act This final rule establishes no new
issued by the U.S. Forest Service or The Department promulgates this burdens on the regulated community;
other Federal agencies for seasonal final rule without notice or an rather it relaxes an existing restriction.
recreational outfitter services, seasonal opportunity for public comment
daltland on DSKBBV9HB2PROD with RULES
The Department has explained that,
recreational guide services, and other because this action is limited to under the APA, when a rule ‘‘relieves
seasonal recreational services, or to implementing E.O. 13838 by inserting
permits or instruments issued for into the Department’s regulations the 2 Although a separate provision dispenses with
seasonal recreational equipment rental. identical language that E.O. 13838 notice and comment for matters relating to public
contracts, 5 U.S.C. 553(a)(2), the Department
Consistent with the instruction in inserted into E.O. 13658. The generally does not rely on that provision, 29 CFR
E.O. 13838, new 29 CFR 10.4(g) does not Administrative Procedure Act (APA) 2.7.
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![48542 Federal Register / Vol. 83, No. 187 / Wednesday, September 26, 2018 / Rules and Regulations
I. Executive Order 13132 (Federalism) activities, recreational ski services, and adverse comment to this direct final rule
youth camps. or the companion proposed rule by
The Department has reviewed this
Signed in Washington, DC, this 18th day of October 26, 2018, on any unintended
rule in accordance with the Executive
September. changes this action makes in the
Order on Federalism (Executive Order
Bryan L. Jarrett, nondiscrimination and equal
13132, 64 FR 43255, August 10, 1999).
opportunity obligations the Department
This rule does not have federalism Acting Administrator, Wage and Hour
Division. enforces. If timely, significant adverse
implications as outlined in E.O. 13132.
comment is received, the Department
The rule does not have substantial [FR Doc. 2018–20757 Filed 9–25–18; 8:45 am]
will publish a notification of
direct effects on the States, on the BILLING CODE 4510–27–P
withdrawal of the direct final rule in the
relationship between the national
Federal Register before the effective
government and the States, or on the
DEPARTMENT OF LABOR date. Such notification may withdraw
distribution of power and
the direct final rule in whole or in part.
responsibilities among the various
levels of government. Office of the Secretary ADDRESSES: Comments may be
submitted, identified by Regulatory
J. Executive Order 13175, Indian Tribal 29 CFR Part 34 Information Number (RIN) 1290–AA32,
Governments by any one of the following methods:
RIN 1290–AA32
The Department has reviewed this • Federal e-Rulemaking Portal: http://
rule under the terms of Executive Order Rescission of Regulations www.regulations.gov. Follow the
13175 (65 FR 67249, November 6, 2000) Implementing the Nondiscrimination instructions for submitting comments.
and determined it does not have ‘‘tribal and Equal Opportunity Provisions of • Fax: (202) 693–6505 (for comments
implications.’’ The rule does not have the Job Training Partnership Act of of six pages or less).
‘‘substantial direct effects on one or 1982 • Mail or Hand Delivery/Courier:
more Indian tribes, on the relationship Naomi Barry-Perez, Director, Civil
between the Federal Government and AGENCY: Office of the Assistant Rights Center (CRC), U.S. Department of
Indian tribes, or on the distribution of Secretary for Administration and Labor, 200 Constitution Avenue NW,
power and responsibilities between the Management, Department of Labor. Room N–4123, Washington, DC 20210.
Federal Government and Indian tribes.’’ ACTION: Direct final rule. • Email: CRC-WIOA@dol.gov.
As a result, no Tribal summary impact Please submit your comment by only
statement has been prepared. SUMMARY: The U.S. Department of Labor one method. Receipt of comments will
takes this action to remove regulations not be acknowledged; however, the
VII. Regulatory Revision for an inoperative program but Department will post all comments
For the reasons set forth in the continues to require non-discrimination received on http://www.regulations.gov
preamble, the Department of Labor and equal-employment opportunity without making any change to the
amends part 10 of title 29 of the Code under its programs. The Department is comments, including any personal
of Federal Regulations as follows: undergoing a process of identifying information provided. The http://
identify regulations that are ‘‘outdated’’ www.regulations.gov website is the
PART 10—ESTABLISHING A MINIMUM and ‘‘unnecessary.’’ The regulations Federal e-rulemaking portal, and all
WAGE FOR CONTRACTORS being rescinded by this rule are comments posted there are available
‘‘outdated’’ because they administer a and accessible to the public.
■ 1. The authority citation for part 10 is program that no longer exists. And they The Department cautions commenters
revised to read as follows: are ‘‘unnecessary’’ because they not to include personal information,
Authority: 5 U.S.C. 301; section 2, E.O. currently serve no purpose, as their such as Social Security Numbers,
13838, 83 FR 25341; section 4, E.O. 13658, existence or non-existence has no personal addresses, telephone numbers
79 FR 9851; Secretary’s Order 01–2014, 79 impact on the Department’s and email addresses, in comments, as
FR 77527. enforcement of non-discrimination such submitted information will become
■ 2. In § 10.4, add paragraph (g) to read standards under its existing programs. viewable by the public via http://
as follows: In particular, the Department is www.regulations.gov. It is the
rescinding its regulations implementing responsibility of the commenter to
§ 10.4 Exclusions. Section 167 of the Job Training safeguard personal information.
* * * * * Partnership Act of 1982, as amended Comments submitted through http://
(g) Contracts in connection with (JTPA). Section 167 contained the www.regulations.gov will not include
seasonal recreational services and nondiscrimination and equal- the commenter’s email address unless
seasonal recreational equipment rental opportunity provisions of the JTPA. In the commenter chooses to include that
offered for public use on Federal lands. 1998, Congress passed the Workforce information as part of a comment.
This part shall not apply to contracts or Investment Act (WIA), which repealed Postal delivery in Washington, DC,
contract-like instruments entered into the JTPA and required the Secretary of may be delayed due to security
with the Federal Government in Labor to transition any authority under concerns. Therefore, the Department
connection with seasonal recreational the JTPA to the system that WIA encourages the public to submit
services or seasonal recreational created. WIA, in turn, was subsequently comments via the website indicated
equipment rental for the general public altered by the Workforce Innovation and above.
on Federal lands, but this exemption Opportunity Act (WIOA). In sum, this The Department will also make all the
daltland on DSKBBV9HB2PROD with RULES
shall not apply to lodging and food rule removes regulations for an comments it receives available for
services associated with seasonal inoperative program, but has no impact public inspection during normal
recreational services. Seasonal on existing non-discrimination rules. business hours at the Civil Rights Center
recreational services include river DATES: This direct final rule is effective at the above address. If you need
running, hunting, fishing, horseback on November 26, 2018, unless the assistance to review the comments, the
riding, camping, mountaineering Department receives a significant Department will provide you with
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Document Created: 2018-09-26 00:47:39
Document Modified: 2018-09-26 00:47:39
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective September 26, 2018. | |
| Contact | Melissa Smith, Director, Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210, telephone: (202) 693-0406 (this is not a toll- free number) or email: [email protected] | |
| FR Citation | 83 FR 48537 | |
| RIN Number | 1235-AA27 |
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