[Federal Register Volume 61, Number 53 (Monday, March 18, 1996)]
[Proposed Rules]
[Pages 10911-10918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6379]
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DEPARTMENT OF LABOR
Employment Standards Administration; Wage and Hour Division
29 CFR Part 500
RIN 1215-AA93
Migrant and Seasonal Agricultural Worker Protection Act
AGENCY: Wage and Hour Division, Employment Standards Administration,
Labor.
ACTION: Notice of proposed rulemaking, request for comments.
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SUMMARY: This document proposes regulations to implement amendments to
the Migrant and Seasonal Agricultural Worker Protection Act (MSPA),
with respect to the relationship between workers' compensation benefits
and the benefits available under the MSPA as required by Public Law
104-49. This Public Law 104-49 specifically requires amendment to the
MSPA regulations concerning disclosure of workers' compensation
information and additionally authorizes reconsideration of the MSPA-
required transportation liability insurance. This document also
proposes to amend existing regulations in order to provide for the
expedited proceeding before an Administrative Law Judge (ALJ) of
actions initiated by the Administrator of the Wage and Hour Division to
revoke, suspend, or refuse to issue or renew a Farm Labor Contractor
Certificate of Registration, and for review by the Secretary of Labor.
Additionally, this document proposes to amend the regulations in order
to make them comport with amendments to MSPA. Lastly, this document
proposes to amend the regulations to indicate that the Certificate of
Registration will reflect the maximum number of farm workers that the
farm labor contractor is authorized to transport.
DATES: Comments on the proposed rule are due on or before April 17,
1996.
ADDRESSES: Submit written comments to Maria Echaveste, Administrator,
Wage and Hour Division, Employment Standards Administration, U.S.
Department of Labor, Room S-3502, 200 Constitution Avenue, NW.,
Washington, DC 20210. Commenters who wish to receive notification of
receipt of comments are requested to include a self-addressed, stamped
post card or to submit them by certified mail, return receipt
requested. As a convenience to commenters, comments may be transmitted
by facsimile (``FAX'') machine to (202) 219-5122. This is not a toll-
free number. If transmitted by FAX and a hard copy is also submitted by
mail, please indicate on the hard copy that it is a duplicate copy of
the FAX transmission.
FOR FURTHER INFORMATION CONTACT: Michael Hancock, Office of Enforcement
Policy, Farm Labor Team, Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, Room S-3510, 200 Constitution
Avenue, NW., Washington, DC 20210; telephone (202) 219-7605. This is
not a toll-free number. Copies of this NPRM in alternative formats may
be obtained by calling (202) 219-7605, (202) 219-4634 (TDD). The
alternative formats available are large print, electronic file on
computer disk and audio-tape.
SUPPLEMENTARY INFORMATION:
I. Paperwork Reduction Act of 1995
The reporting requirements contained in these proposed regulations
have been submitted for review to the Office of Management and Budget
pursuant to section 3507(d) of the Paperwork Reduction Act of 1995.
Title: Worker Information, Form WH-516.
Summary: These proposed regulations amend sections 500.75 and
500.76 of Regulations, 29 CFR Part 500, Migrant and Seasonal
Agricultural Worker Protection Act, to require disclosure to migrant
and seasonal agricultural workers of certain information regarding the
availability of workers' compensation insurance.
Need: Various sections of the Migrant and Seasonal Agricultural
Worker Protection Act (MSPA), 29 U.S.C. 1801 et seq., require that each
farm labor contractor, agricultural employer and agricultural
association disclose in writing the terms and conditions of employment
to: (a) Migrant agricultural workers at the time of recruitment
(section 201(a)(1)); (b) seasonal agricultural workers, upon request,
at the time of employment (section 301(a)(1)) and (c) seasonal
agricultural workers employed through a day-haul operation at the place
of recruitment (section 301(a)(2)). Sections 201(b) and 301(b), which
relate to posting in a conspicuous place at the place of employment a
poster provided by the Secretary setting forth the rights and
protections afforded covered workers under MSPA, also require that each
such employer provide to each worker (upon request in the case of
seasonal agricultural workers) a written statement of the terms and
conditions of employment. In addition, sections 201(g) and 301(f)
require that such information be provided in English, or as necessary
and reasonable, in a language common to the workers and that the U.S.
Department of Labor (DOL) make forms available to provide such
information. Optional Form WH-516, Worker Information, is made
available by DOL for these purposes. As an alternative to use of the
Form WH-516, employers may disclose the terms and conditions of
employment in writing to migrant workers, or in writing upon request to
seasonal workers, using any other format provided the required
information is contained within the disclosure.
Public Law 104-49 provides in section 4 for the disclosure of
certain additional information regarding workers' compensation
insurance to the employee, i.e., whether workers' compensation is
provided and if so, the name of the workers' compensation insurance
carrier, the name of the policyholder of such insurance, the name and
the telephone number of each person who must be notified of an injury
or death, and the time period within which this notice must be given.
Optional Form WH-516 is being revised
[[Page 10912]]
to include this new statutorily-required information. This requirement
can alternatively be met by the employer furnishing the worker with a
photocopy of any notice regarding workers' compensation insurance
required by law of the state in which such worker is employed, provided
the notice contains the information specified above (with respect to
workers' compensation) required for disclosure by section 4 of Public
Law 104-49. It is important to note that the information on the terms
and conditions of employment (including the workers' compensation
information) required to be disclosed is to be disclosed to prospective
employees. Outside of an investigation context in which the employer is
specifically requested to provide a copy of any written disclosure made
to workers, this information is not to be forwarded to, nor will it be
maintained by, the Federal government.
Respondents and proposed frequency of response: MSPA covers only
those farms with over 500 man-days of hired agricultural labor during
any calendar quarter during the preceding calendar year. Unless the 500
man-day threshold is reached, there is no coverage under the Act and no
obligation to provide the disclosure. A yard stick for measuring when
the 500 man-day threshold is reached is if a farm employs 7 full-time
equivalent workers during a calendar quarter. The 1992 Census of
Agriculture reported approximately 160,000 farms which hired 5 or more
agricultural workers during the survey year. 1992 Census of
Agriculture, Vol. 1, Part 51, U.S. Dept. of Commerce, Bureau of Census,
pg. 207. Therefore, it is estimated that no more than 160,000 farms are
covered by the disclosure obligation. According to the U.S. Department
of Agriculture Quarterly Surveys, there are approximately 1,500,000
migrant and seasonal agricultural workers, some of whom are probably
employed on exempt farms. According to the National Agricultural Worker
Survey, these workers averaged 1.75 agricultural employers annually.
U.S. Farmworkers in the Post-IRCA Period, USDOL, pg. 30, 1993.
Therefore, the number of actual disclosures required will not exceed
2,625,000 (1,500,000 x 1.75).
Estimated total annual burden: It is estimated that it requires 32
minutes to gather and prepare for disclosure the required information,
and to make the required disclosures. Of those 32 minutes, it is
estimated that the new disclosure items required by Pub. L. 104-49 will
require 2 minutes and the remaining time is for the disclosure items
already required by MSPA and the regulations. This includes the time
for reviewing instructions, searching existing data sources, gathering
and maintaining the data needed, completing and reviewing the
collection of information, making copies if needed, and actually making
the required disclosures to prospective employees. This results in an
estimated annual burden of 85,333 hours (160,000 farms x 32 minutes).
To obtain an estimate of respondent costs for making the required
disclosure to prospective employees, the average wage rate for an
agricultural worker nationwide of $6.05 per hour was used (Farm Labor,
May 1995, National Agricultural Statistic Service, U.S. Department of
Agriculture). An average markup of 20% for a farm labor contractor is
added to yield an hourly rate of $7.26 per hour. Annual respondent
costs are thus estimated as $619,518 (85,333 annual burden hours x
$7.26).
The public is invited to provide comments on this information
collection requirement so that the Department of Labor may:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) evaluate the accuracy of the agency's estimates of the burden
of the collection of information, including the validity of the
methodology and assumptions used;
(3) enhance the quality, utility and clarity of the information to
be collected; and
(4) minimize the burden of the collection of information on those
who are to make the required disclosure of the terms and conditions of
employment to prospective employees, including through the use of
appropriate automated, electronic, mechanical, or other technological
collection techniques or other forms of information technology, e.g.,
permitting electronic submission of the information to be disclosed to
prospective employees. Written comments should be sent to the Office of
Information and Regulatory Affairs, Office of Management and Budget,
Attention: Desk Officer for Employment Standards Administration, U.S.
Department of Labor, Washington, D.C. 20503.
II. Background
Public Law 104-49 amends the Migrant and Seasonal Agricultural
Worker Protection Act (MSPA) provisions dealing with the private right
of action, the regulatory process for setting minimum transportation
liability insurance requirements, and disclosure obligations to
agricultural workers. The Act requires the Secretary to reexamine the
current MSPA transportation insurance regulations and to amend the
regulations governing disclosure. The insurance rulemaking must be
completed and a final rule published within 180 days of enactment, or
no later than May 13, 1996. The disclosure regulations, while under no
statutory deadline, provide important new information to agricultural
workers and require regulations before they become effective.
The final proposed regulatory amendment would give adjudication
priority to administrative actions denying, revoking, or suspending a
farm labor contractor (FLC) certificate. Currently, some FLCs continue
to lawfully operate for extended periods awaiting an administrative
hearing and final order on a certification action. This proposed
regulation would establish deadlines for Administrative Law Judge
proceedings and Secretarial review proceedings in MSPA certificate
actions.
Key issues addressed in the proposed regulations on which public
comment is particularly solicited are summarized and explained below.
III. Summary and Discussion
Workers' Compensation Disclosure Requirements
The MSPA was amended by Public Law 104-49 to require farm labor
contractors, agricultural employers and agricultural associations who
recruit or hire agricultural workers subject to the protections of the
Act to provide the workers certain additional information about the
terms and conditions of employment. This information must be included
in a written document, and that disclosure document must be given to
each agricultural worker so that it may be retained in the event that
the information contained therein becomes useful or necessary. Under
current regulations, the information to be disclosed includes the place
of employment, the period of employment, wage rate(s), crops and
activities, whether transportation or other benefits are provided,
housing and its cost (if provided), information about any strike, work
stoppage, slowdown, or interruption in operations, and information
about any employer charges for goods or services.
The disclosures required by the MSPA, including the proposed
additions, must be given to each migrant agricultural worker at the
time of recruitment, or, if sufficient information is unavailable at
that time, at the earliest
[[Page 10913]]
time that the information becomes available, but in no event later than
the commencement of employment. Seasonal agricultural workers are
entitled to the same information in the same form upon request.
Only limited information about workers' compensation is required in
the current regulation; the agricultural worker must be informed only
as to whether or not workers' compensation is provided. Under Public
Law 104-49, the disclosure of additional information concerning
workers' compensation will now be required.
Public Law 104-49 provides that migrant agricultural workers are
entitled to receive, in writing, the name of the workers' compensation
insurance carrier, the name of the policy holder of such insurance, the
name and telephone number of each person who must be notified of an
injury or death, and the time period within which such notice must be
given. Seasonal agricultural workers must also receive the workers'
compensation information identified above, in writing if so requested
by the worker(s). The Department proposes to amend Secs. 500.75 and
500.76 to include these new statutorily-required disclosure items.
Under the proposed rule, the information concerning workers'
compensation may be communicated to the worker in one of two forms. The
farm labor contractor, agricultural employer, or agricultural
association may provide this additional information via the optional
written disclosure form (Optional Form WH-516). In the alternative, the
farm labor contractor, agricultural employer or agricultural
association may communicate the necessary workers' compensation
information by giving the agricultural worker a photocopy of any notice
regarding workers' compensation insurance required by the law of the
state in which the worker is employed, as long as such photocopy
contains all the required information.
Transportation Insurance Under MSPA
Under the MSPA, agricultural employers, agricultural associations,
and farm labor contractors who use or cause to be used a vehicle to
transport agricultural workers subject to the Act must comply with
certain minimum transportation safety requirements and provide a
minimum level of financial security to insure against injuries to
workers or third parties. Public Law 104-49 amended the MSPA provision
regarding the determination of the level of financial security to be
required.
MSPA provides three means by which farm labor contractors,
agricultural employers, or agricultural associations may insure against
liability for damage to persons or property arising from the ownership,
operation or causing to be operated a vehicle used to transport
agricultural workers. The security may be in the form of (1) a vehicle
liability insurance policy that insures employees and nonemployees; (2)
a workers' compensation policy along with a liability certificate of
insurance covering transportation whenever nonemployees and employees
may be transported under circumstances not covered by workers'
compensation; or (3) the posting of a $500,000 liability bond. Public
Law 104-49 amended the MSPA provision to require the Secretary to re-
examine the minimum liability insurance requirement and make any
changes indicated by May 13, 1996.
While this proposed rule concerns only the minimum liability
insurance levels per occurrence for such transportation, clarification
is also provided regarding the obligations under MSPA if a farm labor
contractor, agricultural employer, or agricultural association chooses
workers' compensation as the primary transportation insurance coverage
for the agricultural workers being transported. Further, the
legislative history of Public Law 104-49 indicates a need to reaffirm
and further explain the circumstances under which carpooling
arrangements among workers fall outside of the scope of MSPA. Joint
Statement of Legislative Intention, Rep. William F. Goodling, E1943,
Cong. Rec., Oct. 13, 1995. To provide the needed clarification, these
issues are discussed below.
Workers' Compensation as Primary Transportation Insurance
Workers' compensation coverage is a partial alternative to meeting
liability obligations under MSPA and the Department's regulations.
However, workers' compensation coverage alone does not completely
satisfy the legal obligations under MSPA. Property damage insurance is
also required. In addition, the regulations require that if an employer
chooses workers' compensation as the primary coverage, additional
insurance in a specified minimum amount must also be provided to
compensate employees and nonemployees for property damage and bodily
injuries not covered by workers' compensation benefits whenever there
is a possibility that workers may be transported under circumstances
not covered by workers' compensation insurance. Employers who are
certain that the transportation will occur only under circumstances
covered by workers' compensation are not obligated to secure additional
bodily injury coverage but they do so at their own risk and will be in
violation of the MSPA insurance obligations if they transport workers
outside the scope of workers' compensation coverage and are exposed to
suits for actual damages. The regulation at 29 CFR 500.122(c)(2) has
required this supplemental coverage since 1983 and nothing in this
proposed rule is intended to alter this obligation.
Transportation Under MSPA and Carpools
As discussed previously, the legislative history of Publc Law 104-
49 indicated a need to reaffirm and clarify what constitutes a
legitimate carpool arrangement among workers and therefore, beyond the
scope of the MSPA transportation requirements (including minimum
insurance obligations). Carpooling is described in the regulation at
Sec. 500.100(c), which remains unchanged in this proposed rule. Under
the regulation, carpooling is a voluntary arrangement among workers for
transportation to and from work using a worker's own vehicle. The
workers may contribute to offset the costs of the transportation but
only to reasonably reflect the actual costs of the transportation. Any
compensation or other valuable consideration in excess of the actual
costs means the transportation provider is considered a farm labor
contractor and thereby subject to the registration and transportation
requirements of the Act and the regulations. Likewise, any arrangement
in which a farm labor contractor participates will not be considered a
carpool. If any agricultural employer or association directs or
requests such transportation arrangements or provides money or other
valuable consideration for the transportation service, such an
arrangement is not a carpooling arrangement among workers.
There is also some apparent misunderstanding concerning another
transportation practice governed by MSPA transportation regulations. In
California and elsewhere, a substantial industry of individuals known
as ``raiteros'' has developed. The primary function of the ``raitero''
is to transport agricultural workers, for a fee, from common gathering
points to the fields on a day-to-day basis. Under the current
regulations, this would not be considered a carpooling arrangement but
rather a farm labor contracting activity and, consequently, subject to
the MSPA transportation regulations.
According to the Department of Labor National Agricultural Worker
Survey
[[Page 10914]]
(hereinafter referred to as ``NAWS''), U.S. Farmworkers in the Post-
IRCA Period, USDOL, pg. 51, 1993, 10% of the U.S. farm labor force
working in fruit, vegetables, or horticulture, is charged by
``raiteros'' for transportation to and from work. The Report of the
Commission on Agricultural Workers stated that two-thirds of those
working in California citrus and tomatoes paid ``raiteros'' an average
of $3.00 per day for transportation. Report of the Commission on
Agricultural Workers, pgs. 108-109, 1992. It is unknown to what extent
these transportation providers have registered as farm labor
contractors but it is apparent from the farm labor contractor
registration data maintained by the Department of Labor that many have
not. Department of Labor Region 9, which includes the major labor-
intensive agricultural state of California where the ``raitero''
practice is common, reports that only 79 of the 4298 registered farm
labor contractors are authorized to provide transportation.
The ``raitero'' practice is clearly farm labor contracting activity
and subject to MSPA, but many persons who provide this service have
failed to properly register.
Liability Insurance Requirements and Proposed Rulemaking
Public Law 104-49 requires DOL to reexamine the current minimum
liability insurance requirements and determine whether or not changes
are warranted. Among the factors to be considered are the type of
vehicle used, passenger capacity of the vehicle, distance the workers
will be transported, type of roads and highways on which the workers
will be transported, any undue burden on employers and similar
requirements under State law. All of these factors have been considered
by the Department in this proposal.
The overriding concern, as stated in section 401(b)(2)(B) of MSPA,
is the protection of the health and safety of migrant and seasonal
agricultural workers. Prior to Public Law 104-49, the Secretary had the
discretion to set a minimum insurance amount but this could not be less
than the amount required for common carriers of passengers under part
II of the Interstate Commerce Act and the regulations promulgated
thereunder. The factors which the Secretary was to consider in
establishing such requirements are the same as set out in Public Law
104-49.
The legislative history of MSPA makes clear that the requirements
to provide safe vehicles and adequate levels of transportation
insurance are key worker protections in the Act (Report of the House
Committee on Education and Labor, Rept. No. 97-885, 97th Cong., 2d
Sess.; 1982 U.S. Code Cong. and Ad. News 4547 (hereinafter referred to
as Report), at 4565). It was noted that there were a variety of factors
that the Secretary should consider in determining both the substantive
vehicle safety standards and the required minimum insurance amounts.
The House Education and Labor Committee Report accompanying original
MSPA enactment noted that ``[t]he overriding concern of the Secretary
shall be the protection of the health and safety of the workers.'' Id
at 4565. The Committee went on to note the ``* * * often dangerous
conditions under which agricultural workers are transpoted.'' Id at
4566.
The Department's review of MSPA minimum liability insurance levels
as required by Pub. L. 104-49 is guided by the factors set out in the
statute, the legislative intent of the original MSPA enactment and the
amendment, and the underlying purpose articulated by the Interstate
Commerce Commission in setting the minimum levels incorporated by
reference in the current MSPA regulation.
Current Liability Insurance
In both the original MSPA regulations issued in 1983 and a
subsequent amendment in 1992 that significantly raised the insurance
levels, the minimum level of insurance required by the Department under
MSPA has been the same as that set by the Interstate Commerce
Commission regulations for vehicles transporting passengers for hire in
interstate commerce, found at 49 CFR 1043.2(b)(1)(ii). The current ICC
regulation requires at least $1.5 million in liability insurance
coverage for vehicles with a passenger capacity of 15 or fewer and $5
million for a passenger capacity of 16 and more. (Note: under the ICC
regulations--regardless of the outcome of this MSPA rulemaking
process--those who transport agricultural workers in interstate
commerce for a fee may well be required to also comply with the current
ICC insurance rates.)
In a formal rulemaking proceeding to determine the appropriate
minimum insurance levels, the ICC considered a number of factors. The
Commission stated that the primary purposes to be served by the minimum
liability insurance levels include incentives to motor carriers to
operate their vehicles in a safe manner and to assure that they
maintain adequate levels of financial responsibility sufficient to
satisfy claims covering public liability and property damage. The
agency determined, after notice and an opportunity to comment, that the
appropriate amount of minimum coverage was $1.5 million for vehicles
with a seating capacity of 15 or less and $5 million for vehicles with
a seating capacity of 16 or more. In reaching this conclusion, the ICC
considered the protection of the public, the stability of the regulated
industry, the ability of the insurance industry to provide coverage,
and the particular needs of small and minority businesses.
Transportation of Agricultural Workers
According to the Bureau of Labor Statistics, agricultural workers
were second only to truck drivers in number of occupational fatalities
in 1994. Among agricultural workers, vehicular accidents accounted for
50 percent of all occupational fatalities in 1994. Highway deaths
accounted for 20 percent and vehicular accidents in parking lots and
other non-public locations accounted for about 30 percent of all
agricultural worker occupational fatalities. National Census of Fatal
Occupational Injuries, 1994 (Bureau of Labor Statistics; August 3,
1995).
The Department of Labor has received information from
investigations, published reports, and elsewhere documenting the risks
to agricultural workers from vehicular accidents. The liability
insurance required by MSPA is intended to compensate agricultural
workers involved in vehicular accidents when the most common workplace
insurance, workers' compensation, is not provided or when the injuries
resulted from an accident that falls beyond the scope of workers'
compensation. The minimum levels of liability insurance must be
adequate to satisfy the purposes of the Act.
A further consideration in determining the appropriate minimum
insurance levels under MSPA is the insured person's ability to meet
his/her financial responsibility should it be determined that the he/
she is liable for the injuries resulting from an accident. While
agricultural employers generally have assets (land, equipment, crops,
etc.) in addition to the policy of insurance, agricultural workers
employed by many farm labor contractors are likely to find that
compensation for injuries is limited to coverage provided by the
vehicle insurance. Of the 10,899 farm labor contractors registered with
the Department as of October 6, 1995, 975 were authorized to provide
transportation under MSPA in FY 1995. It has been demonstrated in Wage-
Hour enforcement that many farm labor contractors have few assets to
satisfy
[[Page 10915]]
even modest civil money penalty and back wage assessments. It is
reasonable to conclude that many farm labor contractors will also be
without sufficient assets beyond the liability insurance policy with
which to compensate workers injured in accidents.
Based on information indicating that farm labor contractors often
have few financial assets, automobile liability insurance carried on
vehicles operated by or caused to be operated by a farm labor
contractor must be sufficient to cover non-catastrophic injuries
incurred by agricultural workers. Should the damages resulting from
transportation accidents, such as medical costs and lost wages, exceed
the limits of the minimum insurance amounts, the farm labor contractor
may well have insufficient assets to fully compensate for the injuries.
A further consideration is the availability of other insurance
coverage to compensate agricultural workers in the event that they
suffer injuries in a transportation accident. Unlike most U.S. workers,
many agricultural workers do not enjoy full mandatory workers'
compensation protection in most states. According to information
provided by the Department of Labor's Employment Standards
Administration/Office of Workers' Compensation Programs, agricultural
workers are specifically covered in varying degrees by workers'
compensation under current State laws in thirty-nine (39)
jurisdictions. In only fourteen (14) of the 39 jurisdictions in which
agricultural workers are statutorily covered (Arizona, California,
Colorado, Connecticut, the District of Columbia, Hawaii, Louisiana,
Massachusetts, Montana, New Hampshire, New Jersey, Ohio, Oregon, and
the Virgin Islands), farm workers are covered the same as all other
employees. In the remaining twenty-five of the 39 jurisdictions in
which agricultural workers are statutorily covered (Alaska, Delaware,
Florida, Georgia, Illinois, Iowa, Maine, Maryland, Michigan, Minnesota,
Missouri, New York, North Carolina, Oklahoma, Puerto Rico,
Pennsylvania, South Dakota, Texas, Utah, Vermont, Virginia, Washington,
West Virginia, Wisconsin, and Wyoming), there are limitations that are
not applicable to covered employees in other industries. And in another
14 jurisdictions (Alabama, Arkansas, Idaho, Indiana, Kansas, Kentucky,
Mississippi, Nebraska, Nevada, New Mexico, North Dakota, Rhode Island,
South Carolina, and Tennessee), agricultural employers may secure
coverage voluntarily, even though no statutory provisions are
prescribed.
According to the National Agricultural Worker Survey, only 41
percent of the agricultural workforce employed in fruit, vegetables,
and horticultural commodities are covered by workers' compensation, and
only 27 percent of the workers employed by farm labor contractors.
Findings from the National Agricultural Workers Survey 1990; A
Demographic and Employment Profile of Perishable Crop Farm Workers,
USDOL, pg. 74, 1991. Further, according to unpublished NAWs survey data
for FY 1993-1994, only 14 percent of those employed by agricultural
employers or associations and only 7 percent of those employed by farm
labor contractors have any health insurance. Therefore, many workers
will be completely reliant on the liability insurance to compensate for
injuries suffered in transportation accidents. Should the damages
resulting from transportation accidents, such as medical costs and lost
wages, exceed the limits of the minimum insurance amounts, agricultural
workers may find it difficult to secure adequate compensation.
State Insurance Regulation of Agricultural Worker Transportation
In addition to these factors, similar agricultural worker
transportation requirements under State law must be considered. In that
regard, a telephone survey was taken of several States having major
agricultural activity. In every instance, the information provided was
that the State deferred to Federal requirements. Among the States
surveyed were the major labor intensive agricultural states of
California, Texas, and Florida.
The Department considered the limits under the various State
compulsory liability-financial responsibility laws governing personal
vehicles as indicative of sufficient minimum insurance under MSPA. An
examination of these minimum liability insurance levels reveals a wide
range among the various States. For instance, Florida, Louisiana,
Mississippi, and Oklahoma have minimum levels of $10,000 per person and
a limit of $20,000 per occurrence. On the other hand, Hawaii requires
minimum liability coverage of $50,000 per person and has no per
occurrence limit. The most common minimum coverages are $25,000 per
person up to a maximum of $50,000 per occurrence, found in nearly half
the States.
The levels required for personal automobiles appear to be far too
low to serve the fundamental purpose for which the MSPA transportation
insurance requirement was intended. These levels of mandatory coverage
are not sufficient to adequately compensate for reasonably foreseeable
incidents of agricultural worker accidents and the resulting damages.
For instance, in the 1982 ICC rulemaking that resulted in the current
MSPA levels, the ICC found that the average loss in an interstate bus
accident in 1981 exceeded $125,000 per accident. Information concerning
agricultural worker accidents in Florida over the last six years shows
actual loss exceeding $1.5 million per accident is not unusual.
Consideration of the Current Regulatory Scheme
It has also been suggested that the regulations retain the current
scheme setting a required insurance level for vehicles with a capacity
of 15 passengers or below or 16 and more, either at the current minimum
amounts or reduced amounts.
The current regulatory scheme is simple and easily understood; the
vehicle capacity is either 15 or below or 16 and above. Underwriting is
simplified in that there are only two insurance amounts and these are
the same as required of others engaged in commercial transportation.
The standards are well known in that the agricultural and insurance
industries have worked under this structure for over a decade and the
current insurance amounts have been in place for over three years.
There is no evidence that the higher 1992 amounts have resulted in
reduced compliance with the insurance obligation.
Lowering these liability insurance levels could actually work
against one of the primary rationales for overturning the Adams Fruit
decision. That decision allowed injured workers to sue and recover full
actual damages for MSPA violations even when workers are covered by
workers' compensation. In restoring the workers' compensation bar
against suits for actual damages, the primary sponsor of the
legislation believed that it would be more likely for employers in
voluntary workers' compensation States to opt for workers' compensation
over the presumably more expensive liability insurance option. Securing
workers' compensation insurance would benefit workers by providing
coverage for a broad range of workplace injuries, not simply
transportation accidents. (See statement of Rep. William Goodling,
Congressional Record, H10090, Oct. 17, 1995.) However, if the minimum
liability insurance requirements are lowered, this desired movement to
[[Page 10916]]
voluntary workers' compensation coverage may well be thwarted.
It is the view of the Department that the important interests
served by the transportation insurance requirements can be maintained
with additional flexibility for the regulated community in structuring
transportation practices to suit its particular need. Departing from
the two-level scheme, the proposed rule would maintain an adequate
level of insurance coverage but at the same time allow a lower minimum
insurance amount and, presumably, decrease the premiums to be paid.
This approach most closely reflects the statutory considerations
guiding this rulemaking.
Request for Information From the Regulated Community
Also among the factors to be considered is the extent to which the
proposed minimum insurance levels cause an undue burden on agricultural
employers, agricultural associations, and farm labor contractors.
Information from the regulated community is sought to help DOL assess
the financial impact of the current insurance levels and the levels
specified in this proposed rule. The Department would be aided by
receiving financial statements from agricultural employers,
agricultural associations, and farm labor contractors, detailing the
vehicular liability insurance premiums paid for years 1990-1995, the
number of vehicles covered, the types of transportation provided, and
the period within each year that the transportation was provided. This
information should be accompanied by information regarding accidents in
this period involving agricultural workers and insurance claims,
damages, medical expenses, and other loss information resulting
therefrom.
The Department is particularly interested in receiving information
from insurance companies providing this insurance regarding premiums
charged for this coverage, by county or region, as well as any
information the companies can provide concerning total costs for
accidents involving fatalities, personal injuries and property damage.
Specific information about economic loss in each accident would be most
helpful. In the absence of specific agricultural worker information,
data concerning the transportation of passengers for hire would be
helpful. This information is requested for each year between 1990 and
1995. Similar information is requested for interstate motor carriers
covered by 49 CFR 387.31. Finally, information concerning any State
minimum insurance levels for intrastate passenger transportation for
hire but not subject to the ICC levels would be helpful.
Information from state insurance and/or labor agencies concerning
state agricultural worker transportation insurance requirements would
be helpful.
The Department also solicits information from the regulated
community evidencing whether, and if so, the extent to which the 1992
minimum insurance increases resulted in agricultural employers,
agricultural associations, or farm labor contractors transporting
agricultural workers without securing the required insurance coverage.
In addition, the Department solicits information evidencing whether
and, if so, the extent to which farm labor contractors failed to secure
DOL authorization to transport because they were unable to find an
insurer willing to provide a liability insurance policy at the levels
required in 1992. There is no evidence which supports such a finding in
the enforcement and registration records of DOL. In fact, DOL is unable
to detect any significant decrease in the number of farm labor
contractors registering as transportation providers before and after
the insurance increases. In 1991, the year before the insurance
minimums were increased to the current levels, 40% of all farm labor
contractors inspected by the Department in the course of enforcement
activities were found to be transporting workers without the required
transportation authorization. A year after the increase, in 1993, the
percentage of farm labor contractors in violation had risen slightly to
43%. Similarly, enforcement against farm labor contractors,
agricultural employers and agricultural associations detected no
significant increase in violations of the minimum insurance
requirements. In 1991, 24% of those transporting agricultural workers
did so without securing the required insurance while in 1993, 28% were
in violation, a slight rise. We cannot conclude based on these data
that the increased insurance premiums caused the regulated community to
forego compliance with the legal obligations to register as a farm
labor contractor or to secure the required insurance.
Agricultural workers are requested to provide information
concerning loss suffered by workers injured in accidents and the amount
of insurance necessary to insure against reasonably foreseeable risks.
It is not the intention of this rulemaking to establish a minimum level
of insurance sufficient to cover every possible accident. There are
catastrophic events beyond the scope of this coverage and it is not the
Department's purpose to set excessive minimum insurance levels.
Commentators are invited to discuss the level of insurance necessary to
insure against reasonably foreseeable risks.
Public Law 104-49 directs the Secretary to consider the factors set
out in section 401(b)(2)(B) of the Act in determining the appropriate
insurance for MSPA transportation. That section states: ``To the extent
consistent with the protection of the health and safety of migrant and
seasonal agricultural workers, the Secretary shall * * * consider,
among others--(i) the type of vehicle used, (ii) the passenger capacity
of the vehicle, (iii) the distance which such workers will be carried
in the vehicle, (iv) the type of roads and highways on which such
workers will be carried in the vehicle, and (v) the extent to which a
proposed standard would cause an undue burden on agricultural
employers, agricultural associations, or farm labor contractors.''
In the proposed rule discussed below, the capacity of the vehicle
is the central feature in determining the amount of insurance required.
The type of vehicle, the type of road and the geographic area within
which it will be operated, and the distances to be traveled are
considered by the insurance industry in determining the premiums to be
charged for the required minimum insurance coverage amounts. The
proposal should have the effect of lowering the minimum insurance
required in most transportation covered by MSPA and, presumably,
lowering the premiums to be paid. We solicit comments on the statutory
factors and how they bear on this proposal.
Minimum Transportation Insurance Proposal
The proposed rule would amend the current MSPA liability insurance
requirement to decouple the minimum insurance requirement from the 15-
passenger ICC threshold and would substitute a standard which varies
with the seating capacity of the insured vehicle. This approach would
be a more accurate reflection of actual practice in the agricultural
workplace, where vehicle capacity varies widely. Many agricultural
workers are transported in vehicles that have a maximum capacity of
five, six, nine seats, etc. Growers often transport in buses that seat
30-40 passengers. By eliminating the 15-seat dividing line and
substituting a per-passenger capacity standard, the regulation would
grant the transportation provider the ability to choose its vehicles in
such a way as to control its insurance costs. This course would
probably result in a net decrease in insurance premiums for those who
[[Page 10917]]
transport in vehicles with a seating capacity of fewer than 15
passenger or from 16 to 49 passengers.
Agricultural workers face significant risk from transportation
accidents. Workers have been killed and seriously disabled in such
accidents and have generally not had recourse to workers' compensation.
The damages in such accidents are often substantial, involving the
payment of death benefits to the decedent's survivors or damages for
permanent disabilities. The traumatic injuries suffered in
transportation accidents can result in large medical expenses and
substantial amounts of lost wages. Based on the current regulatory
requirement that a 15 passenger vehicle have at least $1.5 million per
occurrence in liability insurance, the Department proposes a
requirement of $100,000 for each person the vehicle has the seating
capacity to lawfully transport. This amount reflects the reasonably
foreseeable damages that result from transportation accidents without
being excessive.
Administrative Hearings on Denials, Suspensions, and Revocations of
Farm Labor Contractor Certificates
Through enforcement experience under MSPA, the Department is aware
that there are often significant delays in the administrative hearing
and review proceedings to which farm labor contractors are entitled
when the Administrator issues a determination denying, suspending, or
revoking a Certificate of Registration (including a Farm Labor
Contractor Employee Certificate). These delays have resulted in
individuals determined to have violated provisions of MSPA remaining in
business as farm labor contractors for considerable periods after the
Wage and Hour Division has found sufficient basis for barring them from
such activity. To remedy this situation and, thereby, assure more
effective enforcement of MSPA while affording appropriate due process,
the Department proposes to amend the procedural regulations to
establish deadlines for administrative hearings and review proceedings:
the hearing is to be held within 60 days after referral of the matter
to the Office of Administrative Law Judges (ALJ); the ALJ decision is
to be issued within 90 days after the close of the hearing; and a
Secretarial decision will be made within 90 days after the issuance of
a notice of intent to review an ALJ decision (in the event of a proper
appeal to the Secretary of the ALJ's decision).
Executive Order 12866/Section 202 of the Unfunded Mandates Reform Act
of 1995
This proposed rule is not ``economically significant'' within the
meaning of Executive Order 12866, nor does it require a Sec. 202
statement under the Unfunded Mandates Reform Act of 1995. However,
because the rule provides initial regulations required to implement
provisions of Public Law 104-49 and may raise novel legal or policy
issues arising out of legal mandates, it has been determined to be a
``significant regulatory action'' within the meaning of Sec. 3(f)(4) of
Executive Order 12866. The proposed rule addresses insurance and
disclosure obligations required under MSPA, as amended by Public Law
104-49. In addition, the rule proposes to revise the administrative
proceedings involving decisions to revoke, suspend, or refuse to issue
or renew Certificates of Registration under MSPA. No economic analysis
is required because the rule will not have a significant economic
impact.
Regulatory Flexibility Analysis
This proposed rule will not have a significant economic impact on a
substantial number of small entities. The proposed rule amends current
regulations at 29 CFR Part 500 to bring the regulations into conformity
with the statutory changes made to MSPA by the enactment of Public Law
104-49. Additionally, the proposed rule amends Sec. 500.225 of the
current rule to provide for expedited administrative proceedings in
matters where the Administrator has initiated action to revoke,
suspend, or refuse to issue or renew a farm labor contractor's
Certificate of Registration (including Farm Labor Contractor Employee
Certificates).
While certain small entities may benefit by reductions to their
insurance premiums resulting from the proposed change to the prescribed
vehicle insurance limits, any benefit would be modest in nature.
Further, the Department anticipates that the portion of the regulated
community which provides transportation, and thus would be affected by
the proposed minimum insurance requirements, is not substantial in
number in any event. According to the Department's farm labor
contractor registration data, only 975 of all registered contractors
(less than 9% of the total), provide transportation to agricultural
workers. It is believed that a similarly small percentage of
agricultural employers and agricultural associations provide MSPA-
covered transportation.
Therefore, this proposed rule is not expected to have a
``significant economic impact on a substantial number of small
entities'' within the meaning of the Regulatory Flexibility Act, and
the Department has certified to this effect to the Chief Counsel for
Advocacy of the Small Business Administration. Accordingly, a
regulatory flexibility analysis is not required.
Document Preparation: This document was prepared under the
direction and control of Maria Echaveste, Administrator, Wage and
Hour Division, Employment Standards Administration, U.S. Department
of Labor.
List of Subjects in 29 CFR Part 500
Administrative practice and procedure, Agricultural associations,
Agricultural worker, Aliens, Carpooling, Day-Haul, Farmer, Farm labor
contractor, Health, Housing, Housing standards, Immigration, Insurance,
Investigation, Migrant agricultural workers, Migrant labor, Motor
carriers, Motor vehicle safety, Occupational safety and health,
Penalties, Reporting and recordkeeping requirements, Seasonal
agricultural workers, Transportation, Wages, Manpower training
programs, Labor, Safety.
Signed at Washington, D.C., on this 12th day of March, 1996.
Maria Echaveste,
Administrator, Wage and Hour Division.
For the reasons set forth above, 29 CFR part 500 is amended as set
forth below:
PART 500--MIGRANT AND SEASONAL AGRICULTURAL WORKER PROTECTION
1. The authority citation for part 500 is amended to read as
follows:
Authority: Pub. L. 97-470, 96 Stat. 2583 (29 U.S.C. 1801-1872);
Secretary's Order No. 6-84, 49 FR 32473; Sec. 210A(f), Pub. L. 99-
603, 100 Stat. 3359 (8 U.S.C. 1161(f)); and Pub. L. 104-49, 109
Stat. 432 (29 U.S.C. 1854).
2. Section 500.48 is proposed to be amended by revising paragraph
(d) to read as follows:
Sec. 500.48 Issuance of certificate.
* * * * *
(d) Authorize the activity of transporting a migrant or seasonal
agricultural worker, subject to the maximum number of workers
authorized to be transported under the vehicle liability policy and as
indicated on the face of the Certificate of Registration, only upon
receipt of:
[[Page 10918]]
(1) A statement in the manner prescribed by the Secretary
identifying each vehicle to be used, or caused to be used, by the
applicant for the transportation of any migrant or seasonal
agricultural worker during the period for which registration is sought;
(2) written proof that every such vehicle which is under the
applicant's ownership or control, is in compliance with the vehicle
safety requirements of the Act and this part; and
(3) written proof that every such vehicle is in compliance with the
insurance requirements of the Act and this part;
* * * * *
3. In Sec. 500.75, paragraph (b)(6) is proposed to be revised to
read as follows:
Sec. 500.75 Disclosure of information.
* * * * *
(b) * * *
(6) Whether state workers' compensation or state unemployment
insurance is provided:
(i) If workers' compensation is provided, the required disclosure
must include the name of the workers' compensation insurance carrier,
the name(s) of the policyholder(s), the name and telephone number of
each person who must be notified of an injury or death, and the time
period within which such notice must be given.
(ii) The information in paragraph (b)(6)(i) of this section may be
provided to the worker by giving the worker a photocopy of any workers'
compensation notice required by State law if such State-required notice
contains the information in paragraph (b)(6)(i) of this section.
* * * * *
4. In Sec. 500.76, paragraph (b)(6) is proposed to be revised to
read as follows:
Sec. 500.76 Disclosure of information.
* * * * *
(b) * * *
(6) Whether state workers' compensation or state unemployment
insurance is provided:
(i) If workers' compensation is provided, the required disclosure
must include the name of the workers' compensation insurance carrier,
the name(s) of the policyholder(s), the name and telephone number of
each person who must be notified of an injury or death, and the time
period within which such notice must be given.
(ii) The information in paragraph (b)(6)(i) of this section may be
provided to the worker by giving the worker a photocopy of any workers'
compensation notice required by State law if such State-required notice
contains the information in paragraph (6)(b)(i) of this section.
* * * * *
5. Section 500.121 is proposed to be amended by revising paragraphs
(a) and (b) to read as follows:
Sec. 500.121 Coverage and level of insurance required.
(a) Except where a liability bond pursuant to Sec. 500.124 of this
part has been approved by the Secretary, a farm labor contractor,
agricultural employer or agricultural association shall, in order to
meet the insurance requirements in Sec. 500.120, obtain a policy of
vehicle liability insurance.
(b) The amounts of vehicle liability insurance shall not be less
than $100,000 for each seat in the vehicle. The number of seats in the
vehicle shall be determined by reference to Sec. 500.105(b)(3)(vi). See
Sec. 500.122 regarding insurance requirement where State workers'
compensation coverage is provided.
* * * * *
6. Section 500.122 is proposed to be amended by removing and
reserving paragraph (b), and revising paragraph (c) to read as follows:
Sec. 500.122 Adjustments in insurance requirements when workers'
compensation coverage is provided under State law.
* * * * *
(c) A farm labor contractor, agricultural employer or agricultural
association who is the employer of a migrant or seasonal agricultural
worker may evidence the issuance of workers' compensation and passenger
insurance under paragraph (a) of this section by obtaining and making
available upon request to the Department of Labor:
(1) A workers' compensation coverage policy of insurance, and
(2) A liability certificate of insurance covering transportation of
all passengers who are not employees and of workers whose
transportation by the employer is not covered by workers' compensation
insurance. See Sec. 500.121.
* * * * *
7. Section 500.224 is proposed to be amended by redesignating
paragraph (b) as paragraph (c), revising paragraph (c), and adding a
new paragraph (b) to read as follows:
Sec. 500.224 Referral to Administrative Law Judge.
* * * * *
(b) In cases involving a denial, suspension, or revocation of a
Certificate of Registration (Farm Labor Contractor Certificate; Farm
Labor Contractor Employee Certificate) or ``certificate action,''
including those cases where the farm labor contractor has requested a
hearing on civil money penalty(ies) as well as on the certificate
action, the date of the hearing shall not be more than sixty (60) days
from the date on which the Order of Reference is filed. No request of
postponement shall be granted except for compelling reasons.
(c) A copy of the Order of Reference, together with a copy of these
regulations, shall be served by counsel for the Secretary upon the
person requesting the hearing, in the manner provided in 29 CFR 18.3.
8. Section 500.262 is proposed to be amended by redesignating
paragraphs (b), (c), (d), (e), (f), and (g) as (c), (d), (e), (f), (g),
and (h) respectively, and adding a new paragraph (b) to read as
follows:
Sec. 500.262 Decision and order of Administrative Law Judge.
* * * * *
(b) In cases involving certificate actions as described in
Sec. 500.224(b) the Administrative Law Judge shall issue a decision
within ninety (90) calendar days after the close of the hearing.
* * * * *
9. Section 500.268 is amended by revising paragraph (a) to read as
follows:
Sec. 500.268 Final decision of the Secretary.
(a) The Secretary's final Decision and Order shall be issued within
120 days from the notice of intent granting the petition, except that
in cases involving the review of an Administrative Law Judge decision
in a certificate action as described in Sec. 500.224(b) of this part,
the Secretary's final decision shall be issued within ninety (90) days
from the date such notice. The Secretary's Decision and Order shall be
served upon all parties and the Chief Administrative Law Judge, in
person or by certified mail.
* * * * *
[FR Doc. 96-6379 Filed 3-15-96; 8:45 am]
BILLING CODE 4510-27-P
