[Federal Register Volume 85, Number 247 (Wednesday, December 23, 2020)]
[Rules and Regulations]
[Pages 83816-83818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28469]
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DEPARTMENT OF LABOR
Office of the Secretary
29 CFR Part 20
RIN 1290-AA44
Second and Subsequent Notifications
AGENCY: Office of the Secretary, Labor.
ACTION: Final rule.
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SUMMARY: This final rule makes two changes. First, the final rule more
clearly permits Department of Labor agency heads (or designees) to send
second and subsequent demand letters at intervals of time separated by
less than thirty days. Second, the final rule encourages debt
collection efforts to proceed promptly so that, if needed, uncollected
debt may be referred to the Department of Justice in a timely manner.
DATES: This final rule is effective on December 23, 2020.
FOR FURTHER INFORMATION CONTACT: Erin FitzGerald, Senior Policy
Advisor, U.S. Department of Labor, Room S-2312, 200 Constitution Avenue
NW, Washington, DC 20210; telephone: (202) 693-5076 (this is not a
toll-free number).
SUPPLEMENTARY INFORMATION:
I. Overview of Amendments
Agencies within the Department of Labor (Department) often must
collect debt owed them, including debt relating to legal violations
such as citation penalties. To collect such debt, agencies sometimes
must send multiple demand letters. Prior to this final rule, 29 CFR
20.55(a) provided that ``second and subsequent demands shall generally
be
[[Page 83817]]
made at 30 day intervals from the first.'' The Department's Office of
the Chief Financial Officer (OCFO) has indicated that agencies may have
an increased likelihood of securing debt payments if second and
subsequent demands are sent at intervals of time separated by less than
thirty days. In particular, in reviewing enforcement agency debt
collection practices, OCFO has noted that agencies that send out demand
letters more quickly and at shorter intervals have higher collection
rates than agencies that do not. Although agency heads (or designees)
could send second and subsequent demand letters at intervals of time
separated by less than thirty days pursuant to 29 CFR 20.55(a) as it
existed before this final rule, this final rule amends 29 CFR 20.55(a)
to provide clearer notice to the public that agency heads (or
designees) can send demand letters in their sole discretion more often
than every thirty days.
This final rule also amends 29 CFR 20.55(a) to better describe
current Department practice. Prior to this final rule, 29 CFR 20.55(a)
stated that ``agencies should give due regard to the need to act
promptly so that, as a general rule, if necessary to refer the debt to
the Department of Justice for litigation, such referral can be made
within one year of the final determination of the fact and the amount
of the debt.'' It has been revised to state that ``agencies should give
due regard to the need to act promptly so that, if necessary, the debt
may be referred in a timely manner to the Department of Justice for
litigation.'' This change better reflects current practice, pursuant to
which the Department of Treasury typically seeks to collect federal
debt for up to two years.\1\ After two years, the Department of
Treasury refers uncollected debt back to the relevant agency, including
agencies within the Department of Labor. Because debt is not typically
referred back to agencies until the debt is at least two years old,
referral to the Department of Justice will generally not be made until
the debt is at least two years old.
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\1\ See OMB Circular No. A-129, Policies for Federal Credit
Programs and Non-Tax Receivables. Section V.E.1. January 2013.
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II. Administrative Procedure Act
Pursuant to 5 U.S.C. 553, this rule is being published as a final
rule to have immediate effect upon publication in the Federal Register.
This final rule deals only with internal operating procedures regarding
the Department's debt-collection practices. This final rule thus
qualifies as a rule ``of agency organization, procedure, or practice''
or a ``general statement of policy'' under 5 U.S.C. 553(b)(A), so it is
exempt from the notice-and-comment requirements of the Administrative
Procedure Act.
This rule is not a ``major rule'' under 5 U.S.C. 801(a)(3) nor a
``substantive rule'' under 5 U.S.C. 553(d) and may also qualify as a
``statement[ ] of policy'' under 5 U.S.C. 553(d)(2). Thus it can be
effective immediately. The Department is making it effective
immediately because of its strong interest in promptly collecting debt,
especially debt derived from legal violations. The prompt collection of
such debt provides the regulated public a stronger incentive to follow
the law by showing that duly levied citations and other penalties must
in fact be paid. Collecting debts also strengthens the Department's
fisc, which assists with budgeting and offsets funds that might
otherwise be requested from Congress and, ultimately, the nation's
taxpayers. Delaying the effective date of this rule would unnecessarily
hinder the Department's law-enforcement mission.
III. Executive Orders 12866, 13563; Small Business Regulatory
Enforcement Fairness Act; Regulatory Flexibility; Paperwork Reduction
Act; Unfunded Mandates Reform Act
Executive Order 12866 requires that regulatory agencies assess both
the costs and benefits of significant regulatory actions. Under the
Executive Order, a ``significant regulatory action'' is one meeting any
of a number of specified conditions, including the following: Having an
annual effect on the economy of $100 million or more; creating a
serious inconsistency or interfering with an action of another agency;
materially altering the budgetary impact of entitlements or the rights
of entitlement recipients; or raising novel legal or policy issues.
The Office of Information and Regulatory Affairs (OIRA) in the
Office of Management and Budget (OMB) has determined that this rule is
not a ``significant regulatory action'' under Executive Order 12866 and
waived review. This final rule deals only with internal operating
procedures regarding the Department's debt collection practices.
Because no notice of proposed rulemaking is required for this rule
under section 553(b) of the APA, the requirements of the Regulatory
Flexibility Act (5 U.S.C. 601) pertaining to regulatory flexibility do
not apply to this rule. See 5 U.S.C. 601(2). Accordingly, the
Department is not required to either certify that the final rule would
not have a significant economic impact on a substantial number of small
entities or conduct a regulatory flexibility analysis. Because, as
noted above, no notice of proposed rulemaking is required for this
rule, no requirements of the Unfunded Mandates Reform Act of 1995 are
triggered. In addition, the amended regulation contain no additional
information-collection or record-keeping requirements under the
Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., and the
implementing regulations at 5 CFR part 1320.
List of Subjects in 29 CFR Part 20
Claims, Income taxes, Reporting and recordkeeping requirements,
Wages.
For the reasons discussed in the preamble, the Department of Labor
amends 29 CFR part 20 as follows:
PART 20--FEDERAL CLAIMS COLLECTION
0
1. The authority citation for part 20 continues to read as follows:
Authority: 31 U.S.C. 3711 et seq.; Subpart D is also issued
under 5 U.S.C. 5514; Subpart E is also issued under 31 U.S.C. 3720A;
Subpart F is also issued under 31 U.S.C. 3720D.
0
2. Amend Sec. 20.55 by revising paragraph (a) to read as follows:
Sec. 20.55 Second and subsequent notifications
(a) In accordance with guidelines established by the Chief
Financial Officer, the responsible agency head (or designee) shall send
progressively stronger second and subsequent demands for payment, if
payment or other appropriate response is not received within the time
specified by the initial demand. Unless a response to the first or
second demand indicates that a further demand would be futile or the
debtor's response does not require rebuttal, the second and subsequent
demands shall generally be made at 30-day intervals from the first, and
shall state that a 6 percent per annum penalty will be assessed after
the debt has been delinquent 90 days, accruing from the date it became
delinquent. An agency head (or designee), however, in his or her sole
discretion can send second and subsequent demands at shorter intervals.
The second and subsequent demands shall identify the amount of interest
then accrued on the debt, as well as administrative costs thus far
assessed. In determining the timing of the demand letters, agencies
should give due regard to the need to act promptly so that, if
necessary, the debt may be referred in a timely manner to the
Department of Justice for litigation.
[[Page 83818]]
When the agency head (or designee) deems it appropriate to protect the
government's interests (for example, to prevent the statute of
limitations 28 U.S.C. 2415, from expiring), written demand may be
preceded by other appropriate actions, including immediate referral for
litigation.
* * * * *
Signed on the 18th day of December, 2020, in Washington, DC.
Eugene Scalia,
Secretary, Department of Labor.
[FR Doc. 2020-28469 Filed 12-22-20; 8:45 am]
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