On June 29, 2020, the Department of Labor announced an interim final rule providing regulations necessary to implement and administer the high-wage components of the Labor Value Content (LVC) requirements set forth in the United States-Mexico-Canada Agreement (USMCA) and the treaty’s implementing statute. The LVC requirements promote more high-wage jobs for the U.S. auto industry by requiring that a significant portion of motor vehicles be made with high-wage labor. Among other provisions, the rule details what information the Department will review for omissions and errors on LVC certifications submitted by vehicle producers to U.S Customs and Border Protection, defines the scope of the Department’s role in conducting verifications to help ensure producer compliance, sets forth recordkeeping requirements, and describes the Department’s whistleblower enforcement process. The interim final rule is effective July 1, 2020.
In this interim final rule, the Department:
- Explains how producers must calculate the average hourly base wage rate for direct production work, including what kind of work may be included in the calculation and how to treat certain workers for purposes of the calculation.
- Explains how producers must calculate the high-wage technology expenditures credit.
- Details what information the Department will review for omissions and errors on certifications submitted by the producer to U.S. Customs and Border Protection.
- Defines the scope of the Secretary’s role in conducting verifications of whether a covered vehicle complies with the high-wage components of the LVC requirements and the process by which the Secretary will conduct such verifications.
- Explains producers’ recordkeeping responsibilities and the scope of the Secretary’s authority to request and inspect such records.
- Describes an administrative review process for the Department’s verification analysis and findings concerning a producer’s compliance with the high-wage components of the LVC requirements.
- Describes the Department’s whistleblower enforcement process, including the filing of complaints, investigations, issuance of determinations, and the administrative review process.
The interim final rule provides guidance to the regulated community to aid compliance with the high-wage components of the LVC requirements of the USMCA.
Anyone who submits a comment (including duplicate comments) should understand and expect that the comment, including any personal information provided, will become a matter of public record and will be posted without change to http://www.regulations.gov. Any comment from an individual gathered and submitted by a third-party organization as a group to WHD and posted under a single document ID number on http://www.regulations.gov will likewise be posted without change, including any personal information provided.
- Interim Final Rule: High-Wage Components of the Labor Value Content Requirements under the United States-Mexico-Canada Agreement Implementation Act
- News Release [June 29, 2020]: U.S. Department of Labor Issues Interim Final Rule to Implement Provisions of the United States-Mexico-Canada Agreement
Civil Money Penalty Inflation Adjustments
Starting in 2016, agencies across the federal government must adjust their penalties for inflation each year. Below is a table that reflects the adjustments that have occurred for penalties under this statute. For more information on the penalty adjustments, go here.
|Type of Violation||Statutory Citation||CFR Citation||Maximum Civil Monetary Penalty on or before 1/15/2022||Maximum Civil Monetary Penalty on or after 1/16/2022|
|Discriminating or retaliating against a person because the person:
(1) Disclosed information relating to verification of a producer’s compliance with its Labor Content Value (LVC) requirements; or
(2) Cooperated or sought to cooperate in a verification concerning the producer's compliance with the LVC requirements.
|19 USC 1508(b)(4) and 19 USC 4535(b)||29 CFR 810.800(c)(3)(i)||$50,000||$53,111|