ESA Proposed Rules

Migrant and Seasonal Agricultural Worker Protection Act   [3/18/1996]
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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