Northeast Ohio’s vibrant commercial real estate industry has not only triggered a construction boom, but has resulted in greater volumes of construction and demolition debris (CandDD) that must either be recycled or landfilled. While most of this material is sent to disposal facilities licensed under Ohio law or to recyclers that run responsible, environmentally-friendly operations, some waste finds its way to illegal dump sites. These sites often collect and then abandon large volumes of waste material, creating nuisance conditions and leaving local communities and the state to bear the cost of cleanup.

The six-acre Arco dump in East Cleveland is one such site. It is considered one of the worst illegal dump sites in the state, and it sits in the middle of a residential neighborhood. Throughout this year, the Ohio EPA and Cuyahoga County have worked to clean up the site and hold the property owner accountable. The clean-up effort could cost as much as $6 million in state funds.

Thanks to new legislation signed by Governor Kasich in July, sites like the Arco dump may become less common and their owners easier to prosecute.

Amended Senate Bill 2 (S.B. 2) gives the Director of the Ohio Environmental Protection Agency (EPA) new authority to regulate CandDD recycling in Ohio. State regulators and the CandDD industry alike welcomed the passage of the bill. The new law is designed to encourage legitimate CandDD recycling while preventing the operation of illegal dumps.

As legal counsel to the Construction and Demolition Debris Association of Ohio (CDAO), an industry group representing CandDD landfill operators, Walter | Haverfield LLP played an integral role in drafting S.B. 2. This included submitting written comments and proposed language for the bill itself. We also participated in numerous Ohio EPA working group meetings on behalf of the CDAO and many of its member facilities who are also long-time firm clients.

CandDD is material resulting from the construction or demolition of man-made structures, such as houses, buildings or roadways. It includes non-hazardous materials such as brick, concrete, stone, glass, wall coverings, plaster, drywall, wood and roofing materials. Because CandDD is generally considered to be inert and poses little threat to the environment as compared to other wastes, Ohio regulates CandDD disposal separately from municipal and household solid waste.

Before S.B. 2 was passed, Ohio EPA had authority to license and regulate CandDD disposal facilities but not CandDD recyclers, even though many disposal facility operators had begun separating valuable recyclables for resale. The existing law did not prevent unlicensed operators from illegally collecting and storing mixed CandDD under the guise of recycling.

Ohio EPA now has the authority to develop regulations for CandDD recyclers (called “processing facilities”) to ensure that they will not create a nuisance, fire hazard, health hazard, or cause or contribute to air or water pollution. The new rules will include permit and licensing programs, plus requirements for the location, design, construction, operation, and closure of CandDD processing facilities. The rules may also cover the type of materials that can be recycled, how long they can be stored, and how much can be accumulated.

Most importantly, the new rules will require recyclers to establish financial assurance in case they go bankrupt or are otherwise unable to close properly. Ohio EPA’s newly-expanded legislative authority will allow greater control and oversight of the recycling industry to prevent future Arcos and safeguard public health, safety and the environment across Ohio.

Leslie can be reached at 216-928-2927 or lwolfe@walterhav.com.

Employers across the nation may have thought they were done with changes to the overtime rule. Not so.

Way back last November, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction barring the Obama Administration’s nationwide implementation of new regulations that would have established a higher salary threshold for certain employees to be considered “exempt” from overtime requirements under the Fair Labor Standards Act (FLSA). Under the proposed regulations, the minimum salary level for executive, administrative, and professional employees to be treated as exempt from the general requirement that employees be paid time and a half for all hours worked over 40 in a week would have been $47,476 per year. The injunction represented a reprieve for employers across the country, as the new salary threshold would have impacted the compensation of approximately four million workers.

Ten months, a decidedly significant sea-change in Washington, D.C., and two nominees for Labor Secretary later, the U.S. Department of Labor (DOL) has issued a Request for Information, asking employers, workers, and interests groups for feedback on what the salary threshold should be. A few things to keep in mind:

• On August 31st, the federal case down in Texas concluded with Judge Amos Mazzant issuing a final ruling that, while the DOL had the statutory authority to set a salary floor for exempt status, the specific salary floor set by the Obama overtime rule was invalid. The DOL promptly abandoned its prior appeal of Mazzant’s earlier preliminary injunction – and the Texas case is now over.
• The DOL will be collecting responses to the RFI through late September.
• At his confirmation hearings in March, Secretary of Labor Alexander Acosta signaled his belief that, while the Obama overtime rule represented an excessive increase, some increase is warranted because the salary threshold was last updated in 2004 and “life does become more expensive over time.”
• The RFI strongly suggests that the DOL is considering an inflation-based approach to raising the floor. According to the DOL’s CPI inflation calculator, an adjustment to the rule to account for inflation between 2004 and 2017 would result in a new threshold of somewhere between $30,000 and $33,000, depending on regional differences.

So, amidst all this uncertainty, employers are left in a lurch in terms of building and maintaining their compensation models. A few recommendations:

• Employers are well-advised to determine to what extent they currently pay non-overtime eligible employees less than $33,000 a year.
• Employers are also well-advised to start considering the impact of either increasing compensation for these employees to a new threshold (say, $33,000) or paying overtime to these employees for all hours over 40 worked in a week.
• Many of the same considerations weighed by employers at the time of the Obama overtime rule’s introduction will still be relevant this time around; the only difference is that the Trump overtime rule will impact a smaller cohort of employees. A key consideration is the effect of a higher floor on the rest of the business’ compensation model. For example, if Peter, who was making $28,000 a year, receives a $5,000 raise to preserve his exempt status, what happens to Paul, who was making $33,000 a year for more skilled work? Additionally, should an employer decide instead to keep wages level and make a position overtime eligible, what will be the psychic effect on re-classified employees who may be angry that they now have to punch a time clock even though they have always been considered “white collar.”

Employers should realistically expect some increase in the salary floor for the FLSA’s executive, administrative and professional exemptions. Fortunately, given that both judicial and administrative processes will be ongoing until at least late 2017, employers have time to be thoughtful in their planning.

George can be reached at 216-928-2899 or gasimou@walterhav.com.

The Department of Homeland Security’s U.S. Citizenship and Immigration Services introduced a new version of the Form I-9, Employment Eligibility Verification. The new form can be accessed HERE.

Starting January 22, 2017, employers must use this new version of the Form I-9 in connection with all new hires in the United States. Section 3 of the new Form I-9 is also required to be used in the event a current employee authorized to work under a prior version of the Form I-9 must be re-verified after January 21, 2017. In such cases, simply append the new version’s Section 3 to the employee’s previously completed Form I-9.

No action is needed for current employees with properly completed Form I-9s not requiring re-verification of their work authorization.

The new version of the Form I-9 – which includes the marking “11/14/2016 N” in the footer at bottom left corner of the form – replaces a prior version marked at bottom left as “03/18/13 N.” The new and prior versions are in most ways identical. The chief difference is that the new version is intended to be easier to complete on a computer, featuring such “smart” features as drop down menus, hover messages, and real-time error indicators – in essence, all the tools that have long been available to consumers in everyday e-commerce. These innovations aside, the Form I-9 still needs to be printed out and signed in hard copy for recordkeeping purposes.

While technical compliance requires that the new version of the Form I-9 be used as of January 22, 2017, our recommendation is that employers start using the new version immediately.

For more information on this or other employment law issues, please contact one of our Employment lawyers.

George J. Asimou is an associate in the Labor and Employment Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

In its first significant action under the Frank R. Lautenberg Chemical Safety for the 21st Century Act of 2016, the U.S. Environmental Protection Agency (EPA) has issued a proposal to ban the manufacture, import, processing, distribution and commercial use of the chemical trichloroethylene (TCE) for aerosol degreasing and spot cleaning in dry cleaning facilities. The EPA’s proposal, issued December 7, 2016, also seeks to require manufacturers, processors and distributors, (not including retailers) to provide downstream notification of TCE use prohibitions throughout the supply chain and to keep limited records.

TCE, also known as tetrachloroethylene and perchloroethylene, is one of 10 chemicals the EPA has identified for priority risk assessment under the Lautenberg Act, which made significant changes to the Toxic Control Substances Act of 1976 (TSCA) and required the EPA to publish a list of 10 priority chemicals by December 19, 2016. According to the EPA, the 10 chemicals were selected based on multiple factors, including their prevalence as environmental contaminants, their widespread use (especially in consumer products), and their perceived or known hazards.

The finalization of the EPA’s priority list will start the clock running on the agency’s obligation to complete a risk evaluation for each of the 10 chemicals within three years. These evaluations will determine whether the chemicals present an unreasonable risk to humans and the environment. If an unreasonable risk is found, the EPA must take action to mitigate that risk within two years.

In general, TSCA authorizes the EPA to require reporting, record-keeping and testing and to issue restrictions relating to chemical substances and/or mixtures. It does not apply to certain substances, such as food, drugs, cosmetics and pesticides, which are separately regulated. With the Lautenberg Act, the EPA now has the power to require safety reviews of all chemicals in the marketplace. This is a fundamental shift in the requirements and approach for addressing chemical safety under TSCA. The EPA has stated that the amendments to TSCA will allow the government to better protect public health and the environment.

TCE is a liquid volatile organic compound (VOC) that has long been considered a probable human carcinogen. In 2014, the EPA completed a risk assessment for TCE which identified serious risks to workers and consumers associated with certain uses of TCE based on its potential to cause a range of adverse health effects. Because the TCE risk assessment was completed prior to the 2016 amendment of TSCA by the Lautenberg Act, the EPA already has authority to publish proposed and final rules covering certain specific uses of the chemical.

It is estimated that around 250 million pounds of TCE are produced or imported into the U.S. per year. Although the EPA’s current proposal is limited to banning TCE as an aerosol degreaser and spot remover in dry cleaning operations, the agency is evaluating whether TCE should be prohibited, in other uses, such as vapor degreasing. The agency is developing a separate proposed regulatory action to address those risks.

Although TSCA imposes most of its requirements on chemical manufacturers, importers and processors, owners and operators of properties and facilities that conduct aerosol degreasing or dry cleaning operations should pay close attention to the fast-changing regulatory landscape surrounding TCE and other toxic substances. By being aware of the types of risks they are exposed to and of significant developments in regulation and litigation, property owners can make better informed decisions about risk management, including decisions concerning lease provisions and environmental insurance protection.

Leslie Wolfe can be reached at 216-928-2927 or lwolfe@walterhav.com.