Migrant and Seasonal Agricultural Worker Protection Act

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]

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