[Federal Register Volume 85, Number 247 (Wednesday, December 23, 2020)]
[Rules and Regulations]
[Pages 83816-83818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28469]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Office of the Secretary

29 CFR Part 20

RIN 1290-AA44


Second and Subsequent Notifications

AGENCY: Office of the Secretary, Labor.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule makes two changes. First, the final rule more 
clearly permits Department of Labor agency heads (or designees) to send 
second and subsequent demand letters at intervals of time separated by 
less than thirty days. Second, the final rule encourages debt 
collection efforts to proceed promptly so that, if needed, uncollected 
debt may be referred to the Department of Justice in a timely manner.

DATES: This final rule is effective on December 23, 2020.

FOR FURTHER INFORMATION CONTACT: Erin FitzGerald, Senior Policy 
Advisor, U.S. Department of Labor, Room S-2312, 200 Constitution Avenue 
NW, Washington, DC 20210; telephone: (202) 693-5076 (this is not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

I. Overview of Amendments

    Agencies within the Department of Labor (Department) often must 
collect debt owed them, including debt relating to legal violations 
such as citation penalties. To collect such debt, agencies sometimes 
must send multiple demand letters. Prior to this final rule, 29 CFR 
20.55(a) provided that ``second and subsequent demands shall generally 
be

[[Page 83817]]

made at 30 day intervals from the first.'' The Department's Office of 
the Chief Financial Officer (OCFO) has indicated that agencies may have 
an increased likelihood of securing debt payments if second and 
subsequent demands are sent at intervals of time separated by less than 
thirty days. In particular, in reviewing enforcement agency debt 
collection practices, OCFO has noted that agencies that send out demand 
letters more quickly and at shorter intervals have higher collection 
rates than agencies that do not. Although agency heads (or designees) 
could send second and subsequent demand letters at intervals of time 
separated by less than thirty days pursuant to 29 CFR 20.55(a) as it 
existed before this final rule, this final rule amends 29 CFR 20.55(a) 
to provide clearer notice to the public that agency heads (or 
designees) can send demand letters in their sole discretion more often 
than every thirty days.
    This final rule also amends 29 CFR 20.55(a) to better describe 
current Department practice. Prior to this final rule, 29 CFR 20.55(a) 
stated that ``agencies should give due regard to the need to act 
promptly so that, as a general rule, if necessary to refer the debt to 
the Department of Justice for litigation, such referral can be made 
within one year of the final determination of the fact and the amount 
of the debt.'' It has been revised to state that ``agencies should give 
due regard to the need to act promptly so that, if necessary, the debt 
may be referred in a timely manner to the Department of Justice for 
litigation.'' This change better reflects current practice, pursuant to 
which the Department of Treasury typically seeks to collect federal 
debt for up to two years.\1\ After two years, the Department of 
Treasury refers uncollected debt back to the relevant agency, including 
agencies within the Department of Labor. Because debt is not typically 
referred back to agencies until the debt is at least two years old, 
referral to the Department of Justice will generally not be made until 
the debt is at least two years old.
---------------------------------------------------------------------------

    \1\ See OMB Circular No. A-129, Policies for Federal Credit 
Programs and Non-Tax Receivables. Section V.E.1. January 2013.
---------------------------------------------------------------------------

II. Administrative Procedure Act

    Pursuant to 5 U.S.C. 553, this rule is being published as a final 
rule to have immediate effect upon publication in the Federal Register. 
This final rule deals only with internal operating procedures regarding 
the Department's debt-collection practices. This final rule thus 
qualifies as a rule ``of agency organization, procedure, or practice'' 
or a ``general statement of policy'' under 5 U.S.C. 553(b)(A), so it is 
exempt from the notice-and-comment requirements of the Administrative 
Procedure Act.
    This rule is not a ``major rule'' under 5 U.S.C. 801(a)(3) nor a 
``substantive rule'' under 5 U.S.C. 553(d) and may also qualify as a 
``statement[ ] of policy'' under 5 U.S.C. 553(d)(2). Thus it can be 
effective immediately. The Department is making it effective 
immediately because of its strong interest in promptly collecting debt, 
especially debt derived from legal violations. The prompt collection of 
such debt provides the regulated public a stronger incentive to follow 
the law by showing that duly levied citations and other penalties must 
in fact be paid. Collecting debts also strengthens the Department's 
fisc, which assists with budgeting and offsets funds that might 
otherwise be requested from Congress and, ultimately, the nation's 
taxpayers. Delaying the effective date of this rule would unnecessarily 
hinder the Department's law-enforcement mission.

III. Executive Orders 12866, 13563; Small Business Regulatory 
Enforcement Fairness Act; Regulatory Flexibility; Paperwork Reduction 
Act; Unfunded Mandates Reform Act

    Executive Order 12866 requires that regulatory agencies assess both 
the costs and benefits of significant regulatory actions. Under the 
Executive Order, a ``significant regulatory action'' is one meeting any 
of a number of specified conditions, including the following: Having an 
annual effect on the economy of $100 million or more; creating a 
serious inconsistency or interfering with an action of another agency; 
materially altering the budgetary impact of entitlements or the rights 
of entitlement recipients; or raising novel legal or policy issues.
    The Office of Information and Regulatory Affairs (OIRA) in the 
Office of Management and Budget (OMB) has determined that this rule is 
not a ``significant regulatory action'' under Executive Order 12866 and 
waived review. This final rule deals only with internal operating 
procedures regarding the Department's debt collection practices. 
Because no notice of proposed rulemaking is required for this rule 
under section 553(b) of the APA, the requirements of the Regulatory 
Flexibility Act (5 U.S.C. 601) pertaining to regulatory flexibility do 
not apply to this rule. See 5 U.S.C. 601(2). Accordingly, the 
Department is not required to either certify that the final rule would 
not have a significant economic impact on a substantial number of small 
entities or conduct a regulatory flexibility analysis. Because, as 
noted above, no notice of proposed rulemaking is required for this 
rule, no requirements of the Unfunded Mandates Reform Act of 1995 are 
triggered. In addition, the amended regulation contain no additional 
information-collection or record-keeping requirements under the 
Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., and the 
implementing regulations at 5 CFR part 1320.

List of Subjects in 29 CFR Part 20

    Claims, Income taxes, Reporting and recordkeeping requirements, 
Wages.

    For the reasons discussed in the preamble, the Department of Labor 
amends 29 CFR part 20 as follows:

PART 20--FEDERAL CLAIMS COLLECTION

0
1. The authority citation for part 20 continues to read as follows:

    Authority: 31 U.S.C. 3711 et seq.; Subpart D is also issued 
under 5 U.S.C. 5514; Subpart E is also issued under 31 U.S.C. 3720A; 
Subpart F is also issued under 31 U.S.C. 3720D.


0
2. Amend Sec.  20.55 by revising paragraph (a) to read as follows:


Sec.  20.55  Second and subsequent notifications

    (a) In accordance with guidelines established by the Chief 
Financial Officer, the responsible agency head (or designee) shall send 
progressively stronger second and subsequent demands for payment, if 
payment or other appropriate response is not received within the time 
specified by the initial demand. Unless a response to the first or 
second demand indicates that a further demand would be futile or the 
debtor's response does not require rebuttal, the second and subsequent 
demands shall generally be made at 30-day intervals from the first, and 
shall state that a 6 percent per annum penalty will be assessed after 
the debt has been delinquent 90 days, accruing from the date it became 
delinquent. An agency head (or designee), however, in his or her sole 
discretion can send second and subsequent demands at shorter intervals. 
The second and subsequent demands shall identify the amount of interest 
then accrued on the debt, as well as administrative costs thus far 
assessed. In determining the timing of the demand letters, agencies 
should give due regard to the need to act promptly so that, if 
necessary, the debt may be referred in a timely manner to the 
Department of Justice for litigation.

[[Page 83818]]

When the agency head (or designee) deems it appropriate to protect the 
government's interests (for example, to prevent the statute of 
limitations 28 U.S.C. 2415, from expiring), written demand may be 
preceded by other appropriate actions, including immediate referral for 
litigation.
* * * * *

    Signed on the 18th day of December, 2020, in Washington, DC.
Eugene Scalia,
Secretary, Department of Labor.
[FR Doc. 2020-28469 Filed 12-22-20; 8:45 am]
BILLING CODE 4510-FN-P