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What definitions apply to this subpart? (Sec. 641.140)
Section 641.140 of the SCSEP regulations provides definitions for
the SCSEP, including those definitions relevant to the SCSEP
performance measures. This NPRM proposes to amend the definitions in
Sec. 641.140 to accommodate the new additional performance measure in
Sec. 641.710. The first amendment adds ``entry into volunteer work''
to the definition of ``additional indicators.'' The final rule provides
that the only additional indicators are the two statutorily required
measures: (1) Retention in unsubsidized employment for 1 year; and (2)
the satisfaction of participants, employers and their host agencies
with their experiences and the services provided. As proposed, the term
``additional indicators'' will include three measures.
Second, we propose to add a new definition of ``volunteer work'' to
Sec. 641.140 for clarity and uniformity, so that all grantees
understand and use the same definition, all seniors are treated the
same, and so that the data we receive is comparable from grantee to
grantee. The definition states that volunteer work is the equivalent of
``activities or work that former participants perform for a public
agency of a State, local government or intergovernmental agency, or for
a charity or similar non-profit organization, for civic, charitable, or
for humanitarian reasons, and without expectation of compensation.'' It
also clarifies that ``[v]olunteer work does not include work a former
participant performs that is similar or identical to work the former
participant performed for compensation for the organization.''
This definition closely follows the principles of the Fair Labor
Standards Act (FLSA), which is administered and enforced by the
Department's Wage and Hour Division. The FLSA recognizes the generosity
and public benefit of volunteering. Encouraging volunteerism, however,
must be balanced with the fundamental purpose of the FLSA, which is to
prevent covered employers from gaining an unfair competitive advantage
through payment of substandard wages. See Tony and Susan Alamo Found v.
Sec'y of Labor, 471 U.S. 290, 299 (1985). The Department has held
consistently that individuals cannot volunteer in the business and
commercial activities of a non-profit organization when those
activities are covered by the FLSA. Therefore, volunteer work also may
not include work a former participant performs that is similar or
identical to work the former participant performed for compensation for
the organization.
SCSEP and its regulations, at 20 CFR 641.844, provide that SCSEP
placements must result in an increase in employment opportunities in
addition to those otherwise available; must not displace currently
employed workers (including partial displacement, such as a reduction
in the hours of non-overtime work, wages, or employment benefits); must
not impair existing contracts or result in the substitution of Federal
funds for other funds in connection with work that would otherwise be
performed; and must not employ or continue to employ any eligible
individual to perform the same work or substantially the same work as
that performed by any other individual who is on layoff. In addition,
attention must be paid that volunteer activities of former SCSEP
participants do not unfavorably impact current employees and do not
impair existing contracts for services, similar to the protections for
paid placements.
Although non-profit organizations typically are not covered
enterprises under the FLSA because they lack a business purpose,
activities of such organizations that compete in the
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market with retail businesses, are considered covered enterprises. See
29 CFR 779.214; WHD Opinion Letter FLSA 2002-9 (Oct. 7, 2002). Even if
the business activities of a non-profit organization do not meet the
FLSA's thresholds for enterprise coverage (for example, because their
annual dollar volume of sales or business done is less than $500,000),
employees who work on such business activities may still be
individually covered by the FLSA.
We believe that the use of the FLSA standard for volunteers is
consistent with the community service values that underlie SCSEP, and
with the Secretary's goal of ensuring employees are paid required
minimum wages and overtime.
Subpart G--Performance Accountability
What performance measures/indicators apply to SCSEP grantees?
(Sec. 641.700)
20 CFR 641.700 separates SCSEP performance measures into two
categories: Core and additional. This NPRM proposes amending Sec.
641.700(a) to add a new additional indicator. Additional indicators are
not subject to goal-setting and therefore are not subject to corrective
action. However, the statute does mandate that the Department annually
publish each grantee's performance on additional indicators. In
addition, this NPRM also proposes to amend paragraph (c)(3) to reflect
that the Secretary has designated entry into volunteer work as an
additional measure in addition to the current measures of employment
retention and customer satisfaction.
DOL intends for the new measure of ``entered volunteer work'' to
parallel the traditional ``entered employment'' measure, which grantees
have been recording since 2004. SCSEP grantees can capture much of the
information required for this measure at the time of exit and need only
confirm the participant's engagement in volunteer work at any time
during the quarter after the exit quarter, as grantees have long
captured the data for entered employment at the first follow-up after
exit. Like the entered employment measure, which excludes participants
who were employed at the time of enrollment, the new measure excludes
those who were engaged in volunteer work before enrollment. However, as
is true with the entered employment measure, DOL would collect data on
several aspects of the volunteer work, including whether the
participant had been performing volunteer work at the time of entry
into the SCSEP, and information about the type of volunteer work
performed after exit, the setting in which it is performed, and the
number of hours of volunteer work per week. DOL would collect data on
these characteristics in the SCSEP data collection system that could be
used for analysis and additional reporting, but DOL would not use the
data to measure the performance of the grantee.
How are the performance indicators defined? (Sec. 641.710)
This NPRM establishes the new additional indicator in Sec. 641.710
by adding a new paragraph to (b)(3), which defines the ``entered
volunteer work'' measure. As set forth above, DOL intends for the new
measure to parallel the existing core measure of entered employment,
which SCSEP has been reporting since 2004. The denominator for the new
measure consists of all participants who exit during a quarter, and the
numerator consists of all those participants who are engaged in any
volunteer work in the quarter after the exit quarter. Participants who
were engaged in volunteer work at the time of entry into the SCSEP are
excluded from the measure.
Grantees will enter into the SCSEP data system information on the
characteristics of the volunteer work (as they currently do for the
characteristics of unsubsidized employment), including whether
participants were engaged in volunteer work at the time of entry into
the SCSEP, so that it will be possible to determine which participants
are newly engaged in volunteer work after exiting as a result of
participating in the SCSEP. Later in this preamble, the accompanying
Paperwork Reduction Act section sets forth the data elements that DOL
will capture in conjunction with this new measure.
III. Administrative Information
A. Regulatory Flexibility Analysis, Executive Order 13272, Small
Business Regulatory Enforcement Fairness Act
The Regulatory Flexibility Act (RFA) at 5 U.S.C. 603 requires
agencies to prepare a regulatory flexibility analysis to determine
whether a regulation will have a significant economic impact on a
substantial number of small entities. Section 605(b) of the RFA allows
an agency to certify a rule in lieu of preparing an analysis if the
regulation is not expected to have a significant economic impact on a
substantial number of small entities. Section 601 of the RFA defines
small entities to include small businesses, small organizations,
including not-for-profit organizations, and small governmental
jurisdictions. Section 601(4) defines a small organization as any not-
for-profit enterprise that is independently owned and operated and not
dominant in its field.
SCSEP includes approximately 970 grantees, sub-recipients, and sub-
sub-recipients. Of these, more than 50 are States, State agencies, or
territories and are not small entities as defined by the RFA. The vast
majority of the rest are non-profit organizations, many of which may be
categorized as small entities for RFA purposes. The Department does not
have a precise number of small entities that may be impacted by this
rulemaking.
The Department has determined that the economic impact of this NPRM
is not likely to be significant for any of these small entities,
because these regulations will not result in any additional costs to
grantees and sub-recipients. This new NPRM involving SCSEP performance
measures will have only a minor information collection impact on a
number of small entities. At the proper time, DOL will address this
burden by submitting to OMB a request for a non-substantive change of
the reporting forms. The SCSEP is designed so that SCSEP funds cover
the vast majority of the costs of implementing this program. We reached
a similar conclusion in our review of the August 14, 2008 NPRM. At that
time, the Department requested public comments on the potential
economic impact that the rule may have on small entities and did not
receive any comments on this section. For these reasons, the Department
has determined and certifies that this NPRM will not have a significant
economic impact on a substantial number of small entities.
The Department has also determined that this rule is not a ``major
rule'' for purposes of the Small Business Regulatory Enforcement
Fairness Act (SBREFA), Public Law 104-121 (1996) (codified in scattered
sections at 5 U.S.C.). SBREFA requires agencies to take certain actions
when a ``major rule'' is promulgated. 5 U.S.C. 801. SBREFA defines a
``major rule'' as one that will have an annual effect on the economy of
$100 million or more; that will result in a major increase in costs or
prices for, among other things, State or local government agencies; or
that will significantly and adversely affect the business climate. 5
U.S.C. 804(2).
This NPRM will not significantly or adversely affect the business
climate. First, the rule will not create a significant impact on the
business climate at all because, as discussed above, SCSEP grantees are
governmental jurisdictions and not-for-profit enterprises. Moreover,
any secondary impact of the program on the business
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community would not be adverse. To the contrary, the SCSEP assists the
business community by training older Americans to participate in the
workforce and benefits the overall community by providing volunteer
work opportunities.
The proposed rule will also not result in a major increase in costs
or prices for States or local government agencies. The SCSEP has no
impact on prices. Finally, this proposed rule will not have an annual
effect on the economy of $100 million or more.
Therefore, because none of the definitions of ``major rule'' apply
in this instance, we determine that this NPRM is not a ``major rule''
for SBREFA purposes.
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