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DOL Withdraws Interpretation of the Fair Labor Standards Act Concerning Relocation Expenses

Thursday, 26 March 2009 00:00

Immigration Labor - H-2A Changes

The DOL published a separate notice in the Federal Register today stating that it was, effective immediately, officially withdrawing an interpretation of the Fair Labor Standards Act (a rejection of the Arriaga case) published on December 18 and 19 in the New H-2A and H-2B regulations. The interpretation was included in the Preambles to both new regulations. Farmworker Justice supports DOL’s withdrawal of the flawed interpretation and urges DOL to act promptly to issue an affirmative statement about the impact of the Arriaga decision.

In December, when the Bush Administration published the final version of their new rules for our nation’s agricultural guestworker program, it included in the Preamble a discussion of a 2002 court case, Arriaga v. Florida Pacific Farms. In this case, the court ruled that employers have to reimburse transportation costs and visa costs of the guestworkers they hire if those expenses made the workers' wages drop below the federal minimum wage. The reasoning is that because they are costs incurred primarily for the benefit of the employer, they must be treated as deductions from wages. The decision was based on similar rulings in other situations and was then followed by other courts.

Without providing any opportunity for notice and comment from the public on this important matter, the Bush Administration unlawfully concluded in the Final Rule’s Preamble that Arriaga was “wrongly decided.” This new interpretation raised the possibility that employers would not have to reimburse their employees for these types of expenses after all. Based entirely on this flawed interpretation, employers around the country argued that they didn’t have to re-pay these costs to their employees. The Fifth Circuit Court of Appeals also came to the same conclusion in a February ruling in Castellanos-Contreras v Decatur Hotels.

On March 26, 2009, DOL published a notice in the Federal Register that it was, effective immediately, officially withdrawing the interpretation of the FLSA and rejection of Arriaga that appeared in the Preamble to the H-2A and H-2B Final Rules in December.

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