Labor Relations Insight

by Phil Wilson

5 Steps to Prepare for the Persuader Rule

If you believe the rumors out of Washington (I do), the so-called persuader rule is on track to go from “proposed” to “final” by the end of next month. It could slip into April but at this point it looks like it is going to happen. After more than 5 years the rule will no longer be a hypothetical. Are you ready? Most companies I talk to (not to mention most consultants and law firms) still treat this rule as a potential threat, versus a clear and present danger. That’s all about to change. Here’s a quick recap for those who have had their head under a pillow hoping that this thing was just a bad dream.

• The proposed rule vastly increases the number of activities that qualify as reportable “persuasion” activity to the Department of Labor (DOL). If you hire outside consultants or attorneys to help train your managers, conduct risk assessments, or help design or implement positive employee relations activities (like training videos or websites, employee surveys, dispute resolution programs, feedback programs or apps, etc.) you will likely trigger a reporting requirement under the proposed rule.
• If you trigger the reporting requirement you are required to report the fact of your agreement (including any fees agreed to) right away.
• At the end of each fiscal year you (and your consultant or attorney) also have to report actual disbursements (or receipts if you are a consultant or attorney) for all activities covered by the rule.
• Depending on the part of the country you live in, you also may be required to report on any “advice” activity provided during that same reporting period.

Again, all we have to go on is the proposed rule – the final rule could be different. Of course if you follow us you will be the first to know about any differences between the two. At this point the safe thing to do is assume the final rule will be very similar to the proposed rule. Here are 5 steps you should take between now and next month to prepare for the final persuader rule:

1. Make sure your leaders understand what is about to happen. Nobody other than us labor nerds are paying any attention to this rule. I also get the whole “chicken-little problem” of getting excited (again) about a rule that’s been getting punted for years. Just take my word for it, that’s not what it looks like now. Your top leaders won’t actually pay attention to this until it goes final, at which point they will wonder why you weren’t warning them about it. Now’s your chance to look like the genius you are. Let us know if we can help – we do briefings like this for clients all the time.
2. Inventory all your potential trigger relationships. The list of potential trigger events is long, and you won’t have a lot of time to figure them out when the final rule gets announced. Give yourself a 30-day head start. Even if a few of the trigger areas change there is no harm done in doing an inventory of these different relationships. You may find some you don’t need or others you can consolidate. That’s a proactive step that is high value to your organization independent of the rule.
3. Talk to your vendors about their reporting plan. Once you inventory these relationships talk to each vendor about their plan for reporting. Have they ever reported before? Do they plan to report? If not, do you agree that they shouldn’t (I would carefully question someone who says this rule doesn’t apply to them). Do they plan to continue providing the service if they come under the rule? You really don’t want to get blindsided by having a key vendor who had been helping you for years suddenly decide they are getting out of any reportable activity.
4. Figure out your own reporting plan. Who is going to be in charge of monitoring these reporting requirements? How will you know whether one has triggered (for example, if someone attends a labor relations seminar how will you know)? What is your reporting system for the 30-day and year end reports? How is that going to be coordinated with your vendors?
5. Keep up to date. You are already well on your way by subscribing to our newsletter. We will send out a breaking news when this hits and will do a webinar a few days later explaining any differences between the proposed rule and the final version. Make sure to stay alert for those announcements.

I now this whole thing is one giant pain in the rear end. That’s why I’m offering you this bonus tip: See Deadpool. The day after I saw it I felt like I had done a bunch of crunches. I knew I hadn’t because, well, I haven’t done a bunch of crunches for around two decades. Then I realized why they hurt. I was sore from laughing so hard. Your mileage may vary (especially if you aren’t a comic book nerd or into really foul-mouthed anti-heroes) but any movie that makes you sore from laughing is worth seeing.