[Federal Register Volume 74, Number 57 (Thursday, March 26, 2009)]
[Notices]
[Pages 13261-13262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6623]


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DEPARTMENT OF LABOR

Employment and Training Administration

Wage and Hour Division


Withdrawal of Interpretation of the Fair Labor Standards Act 
Concerning Relocation Expenses Incurred by H-2A and H-2B Workers

AGENCY: Employment and Training Administration, Department of Labor in 
concurrence with the Wage and Hour Division, Employment Standards 
Administration, Department of Labor.

ACTION: Notice of withdrawal of interpretation.

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SUMMARY: The Department of Labor (DOL or the Department) withdraws for 
further consideration an interpretation of the Fair Labor Standards Act 
(FLSA) published on December 18 and 19, 2008. The interpretation, which 
was published at 73 FR 77148-52 (H-2A program) and 73 FR 78039-41 (H-2B 
program), articulated an opinion that the FLSA and its implementing 
regulations 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. This interpretation is hereby withdrawn for 
further consideration by the Department and may not be relied upon as a 
statement of agency policy.
DATES: Effective Date: March 26, 2009.

FOR FURTHER INFORMATION CONTACT: Richard Brennan, Director of Office of 
Interpretations and Regulatory Analysis, Wage and Hour Division, 
Employment Standards Administration, U.S. Department of Labor, 200 
Constitution Avenue, NW., Room S-3506, Washington, DC 20210; Telephone 
(202) 693-0051 (this is not a toll-free number). Individuals with 
hearing or speech impairments may access the telephone numbers above 
via TTY by calling the toll-free Federal Information Relay Service at 
1-800-877-8339.

SUPPLEMENTARY INFORMATION: The Fair Labor Standards Act (FLSA), 29 
U.S.C. 201 et seq., requires covered employers to pay their nonexempt 
employees a federal minimum wage and overtime premium pay of time and 
one-half the regular rate of pay for hours worked in excess of 40 in a 
week. The agency responsible for administration of the FLSA is the Wage 
and Hour Division, Employment Standards Administration, of the 
Department of Labor. The FLSA and its regulations prohibit an employer 
from either deducting from an employee's pay or imposing an expense 
upon an employee for costs that are primarily for the benefit of the 
employer, if to do so results in an employee receiving less than the 
minimum wage. 29 U.S.C. 203(m); 29 CFR part 531. Thus, during the first 
workweek, workers must be compensated at a rate that would bring their 
wages up to minimum wage, taking into account pre-employment expenses 
that primarily benefit the employer. In Arriaga v. Florida Pacific 
Farms, L.L.C., 305 F.3d 1228 (11th Cir. 2002), the U.S. Court of 
Appeals for the Eleventh Circuit held that, under the FLSA regulations, 
the transportation from Mexico to Florida and visa costs of temporary 
nonimmigrant workers coming to the U.S. under the H-2A visa program, 
see 8 U.S.C. 1101(a)(15)(H)(ii)(a), were primarily for the grower's 
benefit because such costs were necessary and incident to the 
employment of such workers. A number of U.S. district courts have 
extended the Arriaga holding regarding the FLSA requirements to 
temporary nonimmigrant workers admitted into the U.S. under the H-2B 
visa program, 8 U.S.C. 1101(a)(15)(H)(ii)(b). See, e.g., De Leon-
Granados v. Eller & Sons Trees Inc., 2008 WL 4531813 (N.D. Ga., Oct. 7, 
2008); Rosales v. Hispanic Employee Leasing Program, 2008 WL 363479 
(W.D. Mich. Feb. 11, 2008); Rivera v. Brickman Group, 2008 WL 81570 
(E.D. Pa. Jan. 7, 2008); Recinos-Recinos v. Express Forestry Inc., 2006 
WL 197030 (E.D. La. Jan. 24, 2006); but see Castellanos-Contreras v. 
Decatur Hotels LLC, No. 07-30942 (5th Cir. Feb. 11, 2009), pet. for 
reh'g filed (Mar. 11, 2009), rev'g, 488 F. Supp. 2d 565 (E.D. La. 
2007).
    On December 18, 2008, DOL published final regulations revising the 
procedures for the issuance of labor certifications to employers 
sponsoring H-2A nonimmigrants for admission to perform temporary 
agricultural labor or services and the procedures for enforcing 
compliance with attestations made by those employers. 73 FR 77110. The 
H-2A Final Rule became effective on January 17, 2009. The preamble 
accompanying the H-2A Final Rule included a discussion of the Arriaga 
issue, concluding that the Eleventh Circuit's decision was wrongly 
decided and that inbound travel expenses of H-2A workers do not 
primarily benefit their employers. 73 FR 77148-52. DOL characterized 
this discussion as an interpretation of the FLSA, 73 FR 77151, and did 
not seek public comment on the issue when it issued the H-2A Notice of 
Proposed Rulemaking, 73 FR 8538 (Feb. 13, 2008). Prior to the issuance 
of the preamble discussion, courts uniformly had held that relocation 
expenses were primarily for the benefit of employers.
    On December 19, 2008, DOL published final regulations revising the 
procedures for the issuance of labor certifications to employers 
sponsoring H-2B nonimmigrants for admission to perform temporary 
nonagricultural labor or services and the procedures for enforcing 
compliance with attestations made by those employers. 73 FR 78019. The 
Final Rule became effective on January 18, 2009. The preamble 
accompanying the Final H-2B Rule included a discussion of the Arriaga 
issue, concluding that the Eleventh Circuit's decision and the district 
court

[[Page 13262]]

decisions that followed its reasoning in the H-2B context were wrongly 
decided and that inbound travel expenses of H-2B workers do not 
primarily benefit their employers. 73 FR 78039-41. DOL characterized 
this discussion as an interpretation of the FLSA, 73 FR 78041, and did 
not seek public comment on the issue when it issued the H-2B Notice of 
Proposed Rulemaking, 73 FR 29941 (May 22, 2008). Prior to the issuance 
of the preamble discussion, courts uniformly had held that relocation 
expenses were primarily for the benefit of employers.
    This matter concerns important issues as to whether various pre-
employment expenses incurred by workers lawfully may result in workers' 
weekly wages being reduced below the minimum wage. Because of the reach 
of FLSA coverage, any interpretation of FLSA regulations has wide-
ranging effects; the interpretation of section 203(m) of the FLSA and 
its regulations in the preamble of the H-2A and H-2B Final Rules may 
have ramifications well beyond the workers and employers subject to the 
H-2A and H-2B rules. Indeed, the H-2A and H-2B preamble interpretation 
of the FLSA is not codified in any regulatory requirement set out in 
the H-2A and H-2B rules, and DOL did not seek public comment on the 
issue from the H-2A and H-2B regulated communities. DOL is especially 
sensitive to potential adverse impacts an interpretation, which was 
included in the preamble in order to state a policy position of the 
prior Administration, might have on our Nation's most vulnerable 
workers, including low-wage U.S. workers and foreign guest workers. For 
these reasons, DOL believes that this issue warrants further review. 
Consequently, in accordance with authority granted under the FLSA, 29 
U.S.C. 203(m) and 259, as well as the INA, 8 U.S.C. 
1101(a)(15)(h)(ii)(a), 1101(a)(15)(h)(ii)(b), 1103(a)(6), 1184(c), 
1188; 8 CFR 214.2(h); and 20 CFR 655.50(a), DOL withdraws the FLSA 
interpretation at 73 FR 77148-52 and at 73 FR 78039-41 for further 
consideration and the interpretation may not be relied upon as a 
statement of agency policy for purposes of the Portal-to-Portal Act, 29 
U.S.C. 259 or otherwise.\1\ After reconsideration of this issue, DOL 
will provide the public with interpretive guidance through a mechanism 
established for disseminating the Department's opinions and 
interpretations of the FLSA.
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    \1\ On March 17, 2009, DOL proposed to suspend the H-2A Final 
Rule. 74 FR 11408. The proposed suspension is open to public 
comment, but regardless of the outcome of the notice of proposed 
rulemaking, the Department withdraws for further consideration the 
interpretation of the FLSA that appeared in the preamble to the H-2A 
Final Rule.

    Signed in Washington, DC, this 20th day of March 2009.
Douglas F. Small,
Deputy Assistant Secretary, Employment and Training Administration.
Shelby Hallmark,
Acting Assistant Secretary, Employment Standards Administration.
[FR Doc. E9-6623 Filed 3-25-09; 8:45 am]
BILLING CODE 4510-FP-P