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.
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