Timekeeping Requirement, 70564-70569 [2020-23811]
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70564
Federal Register / Vol. 85, No. 215 / Thursday, November 5, 2020 / Proposed Rules
J. What is codification and is the EPA
codifying Texas’ hazardous waste
program as authorized in this rule?
Codification is the process of placing
the State’s statutes and regulations that
comprise the State’s authorized
hazardous waste program into the CFR.
We do this by referencing the
authorized State rules in 40 CFR parts
272. We reserve the amendment of 40
CFR parts 272, subpart SS for this
authorization of Texas’ program changes
until a later date. In this authorization
application the EPA is not codifying the
rules documented in this Federal
Register notice.
K. Corrections to the August 18, 1999
(64 FR 44836) Authorization Federal
Register Document for Texas
In the ADDRESSES section of the
August 18, 1999 authorization notice,
the reference to ‘‘the State of Louisiana’’
is corrected to read ‘‘the State of Texas.’’
In addition, the State’s address
referencing Louisiana Department of
Environmental Quality is corrected to
read ‘‘Texas Commission on
Environmental Quality, (TCEQ), 12100
Park S Circle, Austin, Texas 78753–
3087, (512) 239–6079.’’
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L. Administrative Requirements
The Office of Management and Budget
(OMB) has exempted this action (RCRA
State Authorization) from the
requirements of Executive Orders 12866
(58 FR 51735, October 4, 1993) and
13563 (76 FR 3821, January 21, 2011).
Therefore, this action is not subject to
review by OMB. This action proposes to
authorize State requirements for the
purpose of RCRA 3006, and imposes no
additional requirements beyond those
imposed by State law. Because this
proposed rule is not subject to Executive
Order 12866, this proposed rule is not
subject to Executive Order 13771 (82 FR
9339, February 3, 2017), entitled
Reducing Regulations and Controlling
Regulatory Costs. Accordingly, this
action will not have a significant
economic impact on a substantial
number of small entities under the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.). Because this action proposed to
authorize preexisting requirements
under State law and does not impose
any additional enforceable duty beyond
that required by State law, it does not
contain any unfunded mandate or
significantly or uniquely affect small
governments, as described in the
Unfunded Mandates Reform Act of 1995
(Pub. L. 104–4). For the same reason,
this proposed action also does not
significantly or uniquely affect the
communities of Tribal governments, as
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specified by Executive Order 13175 (65
FR 67249, November 9, 2000). This
action will not have substantial direct
effects on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government, as
specified in Executive Order 13132 (64
FR 43255, August 10, 1999), because it
merely proposes to authorize State
requirements as part of the State RCRA
hazardous waste program without
altering the relationship or the
distribution of power and
responsibilities established by RCRA.
This proposed action also is not
subject to Executive Order 13045 (62 FR
19885, April 23, 1997), because it is not
economically significant and it does not
make decisions based on environmental
health or safety risks. This proposed
rule is not subject to Executive Order
13211, ‘‘Actions Concerning Regulations
That Significantly Affect Energy Supply,
Distribution, or Use’’ ’ (66 FR 28355
(May 22, 2001)) because it is not a
significant regulatory action under
Executive Order 12866.
Under RCRA 3006(b), the EPA grants
a State’s application for authorization as
long as the State meets the criteria
required by RCRA. It would thus be
inconsistent with applicable law for the
EPA, when it reviews a State
authorization application; to require the
use of any particular voluntary
consensus standard in place of another
standard that otherwise satisfies the
requirements of RCRA. Thus, the
requirements of section 12(d) of the
National Technology Transfer and
Advancement Act of 1995 (15 U.S.C.
272 note) do not apply. As required by
section 3 of Executive Order 12988 (61
FR 4729, February 7, 1996), in issuing
this proposed rule, the EPA has taken
the necessary steps to eliminate drafting
errors and ambiguity, minimize
potential litigation, and provide a clear
legal standard for affected conduct. The
EPA has complied with Executive Order
12630 (53 FR 8859, March 15, 1988) by
examining the takings implications of
the rule in accordance with the
‘‘Attorney General’s Supplemental
Guidelines for the Evaluation of Risk
and Avoidance of Unanticipated
Takings’’ issued under the Executive
Order. This proposed rule does not
impose an information collection
burden under the provisions of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.).
Executive Order 12898 (59 FR 7629,
Feb. 16, 1994) establishes federal
executive policy on environmental
justice. Its main provision directs
federal agencies, to the greatest extent
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practicable and permitted by law, to
make environmental justice part of their
mission by identifying and addressing,
as appropriate, disproportionately high
and adverse human health or
environmental effects of their programs,
policies, and activities on minority
populations and low-income
populations in the United States.
Because this rule proposed to authorize
pre-existing State rules which are at
least equivalent to, and no less stringent
than existing federal requirements, and
imposes no additional requirements
beyond those imposed by State law, and
there are no anticipated significant
adverse human health or environmental
effects, the proposed rule is not subject
to Executive Order 12898.
List of Subjects in 40 CFR Parts 271
Environmental protection,
Administrative practice and procedure,
Confidential business information,
Hazardous waste, Hazardous waste
transportation, Indian lands,
Intergovernmental relations, Penalties,
Reporting and recordkeeping
requirements.
Authority: This action is issued under the
authority of sections 2002(a), 3006, and
7004(b) of the Solid Waste Disposal Act as
amended 42 U.S.C. 6912(a), 6926, 6974(b).
Dated: October 26, 2020.
Kenley McQueen,
Regional Administrator, Region 6.
[FR Doc. 2020–24242 Filed 11–4–20; 8:45 am]
BILLING CODE 6560–50–P
LEGAL SERVICES CORPORATION
45 CFR Part 1635
Timekeeping Requirement
Legal Services Corporation.
Proposed rule.
AGENCY:
ACTION:
The Legal Services
Corporation (LSC) is proposing to
amend its rule establishing timekeeping
requirements for LSC funding
recipients.
SUMMARY:
Comments must be received by
February 3, 2021.
ADDRESSES: You may submit comments
by any of the following methods:
• Federal Rulemaking Portal: Follow
the instructions for submitting
comments.
• Email: lscrulemaking@lsc.gov.
Include ‘‘Part 1635 Rulemaking’’ in the
subject line of the message.
• Fax: (202) 337–6519.
• Mail: Stefanie K. Davis, Senior
Assistant General Counsel, Legal
Services Corporation, 3333 K Street NW,
DATES:
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Washington, DC 20007, ATTN: Part
1635 Rulemaking.
• Hand Delivery/Courier: Stefanie K.
Davis, Senior Assistant General
Counsel, Legal Services Corporation,
3333 K Street NW, Washington, DC
20007, ATTN: Part 1635 Rulemaking.
Instructions: LSC prefers electronic
submissions via email with attachments
in Acrobat PDF format. LSC will not
consider written comments sent to any
other address or received after the end
of the comment period.
FOR FURTHER INFORMATION CONTACT:
Stefanie K. Davis, Senior Assistant
General Counsel, Legal Services
Corporation, 3333 K Street NW,
Washington, DC 20007; (202) 295–1563
(phone), (202) 337–6519 (fax), or
sdavis@lsc.gov.
SUPPLEMENTARY INFORMATION:
I. Background
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In 1995, LSC initiated rulemaking to
require recipient employees to keep
records of time spent working on LSCfunded activities. 60 FR 48956, Sep. 21,
1995. LSC took this step to ‘‘improve
accountability of recipients for their
Corporation funds, and in response to
concerns expressed during
Congressional hearings.’’ Id. LSC
wanted to assure that recipients
maintained adequate documentation to
support allocation of costs to the LSC
grant. Id. at 48957. Consequently, LSC
intended the rule ‘‘to require all
recipients to account for the time spent
on all cases, matters and other activities
by their attorneys and paralegals,
whether funded by [LSC] or other
sources.’’ Id. (emphasis added). LSC did
not define either attorney or paralegal,
although LSC did define the terms cases
and matters.1 Id. LSC did not prescribe
either the format or the content of the
required timekeeping reports. Id.
After receiving public comment, LSC
adopted the proposed rule as final, with
limited changes. 61 FR 14261, Apr. 1,
1996. In the preamble to the final rule,
LSC stated that the rule applied to
recipient attorneys and paralegals
regardless of whether their salaries were
paid using LSC funds. Id. Applying the
rule to all attorneys and paralegals, LSC
explained, reflected language that
Congress included in a version of the
fiscal year 1996 appropriations act that
1 LSC’s regulations at part 1600 define terms used
throughout the regulations. 45 CFR part 1600. These
terms govern unless LSC defined the term
differently in a part. For purposes of this
discussion, the Part 1600 definition of the term
attorney (‘‘a person who provides legal assistance
to eligible clients and who is authorized to practice
law in the jurisdiction where assistance is
rendered’’) applies. Id. § 1600.1. There is no part
1600 definition for the term paralegal.
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it passed, but the President vetoed. Id.
LSC retained the requirement because it
anticipated that Congress and the
President would agree on legislation
containing a similar requirement for
fiscal year 1996, which they did. Sec.
504(a)(10), Public Law 104–134, 110
Stat. 1321, 1321–54 (1996) (stating that
LSC could not award appropriated
funds to any person or entity unless
‘‘such person or entity agrees to
maintain records of time spent on each
case or matter with respect to which the
person or entity is engaged.’’).
In the preamble to the final rule, LSC
explained how it expected recipients to
implement the requirement to maintain
‘‘contemporaneous’’ time records. LSC
stated that ‘‘contemporaneous’’ meant
‘‘in most cases, by the end of the day.’’
61 FR at 14262.
LSC initiated its first revision of part
1635 in 1998. That year, the Office of
Inspector General (OIG) conducted an
audit of recipients’ compliance with
specific regulations, including part
1635, and issued a report that formed
the basis for Management’s
recommended changes. In the report,
OIG stated its finding that, based on
records maintained in compliance with
part 1635, it could not tell whether parttime employees of an LSC funding
recipient engaged in restricted work
during LSC-funded time. 63 FR 56594,
Oct. 22, 1998.
In response to OIG’s findings, LSC
proposed two changes. The first was to
require recipients to ensure that the
time records for both full- and part-time
employees were consistent with their
payroll time and attendance records. In
other words, ‘‘the time spent by an
employee must at least add up to the
amount reflected in the attendance
records.’’ Id. at 56595. LSC also
proposed to require full-time and parttime attorneys and paralegals to record,
for each case, matter, or supporting
activity that they handled, the date and
exact time of day they worked on that
activity. Id. Alternatively, LSC proposed
that part-time attorneys and paralegals
could certify that they did not engage in
restricted activities during the time they
were working for the recipient. Id.
LSC did not finalize its revisions to
part 1635 until 2000. At that time, LSC
adopted the rule with two changes
relevant here. 65 FR 41879, Jul. 7, 2000.
First, LSC removed the proposed text
requiring attorney and paralegal time
records to be consistent with their
payroll time and attendance records. Id.
at 41880. Several commenters on the
proposed rule expressed concern that a
rule requiring employee time records to
match the payroll records would put
recipients at risk of violating the Fair
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Labor Standards Act. Id. Although LSC
did not agree with the commenter
raising the concern, LSC removed the
language because it believed the
language was not necessary. Id. Second,
LSC adopted the certification
requirement for part-time attorneys and
paralegals. Id. Put differently, part-time
attorneys and paralegals do not have to
report the date and exact time of day
that they worked on cases, matter, or
supporting activities, but must certify
that they did not work on restricted
activities during the hours they worked
for a recipient.
Management believes that regulatory
action is justified at this time for three
reasons. First, the lack of a definition for
the term paralegal creates a lack of
uniformity across recipients regarding
which employees must keep time. In
other words, some recipients employ
staff who are called paralegals, but who
do only administrative work, while
others employ staff who perform
substantive legal work under an
attorney’s supervision or who have
satisfied their state’s requirements for
holding oneself out as a paralegal, but
who may not have the title of paralegal.
Because the regulation does not define
the term paralegal, it is unclear whether
some or all recipient employees
described in the preceding sentence
must keep time consistent with part
1635. Consequently, LSC cannot be
certain that part 1635 covers all
recipient employees who are doing
substantive work on the LSC grant,
which appears to be what LSC intended
when it originally drafted the rule to
cover attorneys and paralegals. LSC
proposes to remedy this problem by
revising the language to include all
employee staff, regardless of
qualification or title, who are doing
substantive work on identifiable awards.
Conversely, employee staff who are not
doing substantive work on identifiable
awards need not record their time under
part 1635.
Second, the federal government rules
governing recipient timekeeping have
changed significantly, as have best
practices for nonprofit timekeeping. LSC
believes it is reasonable to reconsider
the requirements of part 1635 in light of
these advances and determine whether
to revise the rule to reflect the new
standards. Finally, LSC proposes to
remove any provisions of the rule that
are obsolete.
LSC added rulemaking on part 1635
to its annual rulemaking agenda in April
2016. On January 30, 2020, the
Operations and Regulations Committee
(‘‘Committee’’) of the Board voted to
recommend that the Board authorize
rulemaking on part 1635. The Board
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voted to authorize rulemaking on
January 31, 2020. On October 19, 2020,
the Committee voted to recommend that
the Board approve publication of an
NPRM in the Federal Register with a
60-day public comment period. On
October 20, 2020, the Board accepted
the Committee’s recommendation and
voted to approve publication of the
NPRM.
Materials regarding this rulemaking
are available in the open rulemaking
section of LSC’s website at https://
www.lsc.gov/about-lsc/laws-regulationsguidance/rulemaking.
II. Section-by-Section Discussion of
Proposed Changes
Section 1635.1
this section?
What is the purpose of
LSC proposes to make technical edits
to this section for clarity.
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Section 1635.2
Definitions
LSC proposes to revise the definition
of the term case in paragraph (a) to be
more consistent with the definition of
the same term in the Case Service
Report Handbook (CSR Handbook). In
the CSR Handbook, LSC defined a case
as ‘‘the provision of LSC-permissible
legal assistance to an eligible client with
a legal problem, or a set of closely
related legal problems, accepted for
assistance in accordance with the
requirements of the LSC Act,
appropriations acts, regulations, and
other applicable law.’’ See Legal
Services Corporation, Case Service
Reporting Handbook, at 2 (2017). LSC is
now proposing to revise the first
sentence of the definition in part 1635
to read ‘‘Case means a form of program
service in which a recipient employee
provides legal assistance to one or more
specific clients[. . .]’’
LSC proposes to introduce a new
definition for the term case oversight in
paragraph (b) of this section. The new
definition is necessary to ensure that
supervisors accurately report the time
they spend examining attorneys’ and
paralegals’ case files for regulatory
compliance, CSR compliance, and
quality of legal assistance provided.
LSC proposes to relocate the
definitions in existing paragraphs (b)
through (d) of this section to paragraphs
(c) through (e) in the revised rule with
only minor technical edits.
Section 1635.3 Who is covered by the
timekeeping requirement?
LSC proposes to create a new section
dedicated to explaining which recipient
employees must report time consistent
with the requirements of this section.
LSC proposes to replace the language
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limiting the application to part 1635 to
recipient employees and paralegals with
language extending part 1635 to any
recipient employee whose salary is
allocated, in whole or in part, to any of
the recipient’s funding sources as a
direct cost.
As noted earlier in this preamble, LSC
has determined that the current rule’s
use of the term paralegal, without a
definition, makes it difficult to ensure
that all recipient employees who do
substantive work on the recipient’s
awards accounts for the time they spend
on cases, matters, and supporting
activities. Additionally, since LSC last
revised part 1635 in 2000, states have
explored novel structures that would
permit nonlawyers, as well as
paralegals, to practice law in a limited
fashion. For example, in 2013, the
Washington State Bar Association
initiated the Limited License Legal
Technician (LLLT) program, through
which individuals could become
licensed to provide litigants with a
limited range of legal services in family
law. Similarly, the Arizona Supreme
Court recently adopted changes to the
state rules governing the practice of law
that will allow legal paraprofessionals to
provide legal services in family law,
limited criminal cases where no jail
time is involved, limited civil cases, and
administrative cases where permitted by
the agency. As more states expand
access to justice by authorizing
nonlawyers to provide services
traditionally limited to licensed
attorneys, LSC anticipates that legal
services providers will hire these
paraprofessionals to assist their clients.
The purpose of part 1635 is to
establish the standards for reporting
time that any employee of an LSC
funding recipient who provides legal
assistance to clients must follow. LSC
believes that removing the current
language limiting the timekeeping
requirement to attorneys and an
undefined group of paralegals and
instead tying the requirement to
employees whose salaries are charged to
awards as direct costs is necessary to
ensure that the recipient’s funds are
spent in compliance with LSC’s
governing statutes and regulations. In
other words, if a recipient employee
handles cases and the recipient allocates
the costs associated with those cases to
the LSC grant as direct costs, then that
employee must keep time consistent
with part 1635, regardless of their title.
LSC cross-references the standards for
allocating costs as direct costs contained
in 45 CFR 1630.5(d) as the basis for
determining which recipient employees
must keep time under this section. In
that section, LSC describes direct costs
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as including ‘‘salaries and wages of
recipient staff who are working on cases
or matters that are identified with
specific grants or contracts[.]’’ 45 CFR
1630.5(d). This connection means that a
recipient employee who enters time
worked on a case into the case
management system with a code that
designates the case as an LSC-funded
case must comply with the timekeeping
requirements contained in part 1635. If
adopted, this proposed change would
mean that a recipient employee who
does not handle cases as part of their
regular duties but who accepts a case or
steps into a case on an emergency basis
would have to keep time consistent with
part 1635 for the periods in which that
employee’s salary is being allocated to
an award as a direct cost.
Example 1: A recipient’s executive
director does not handle cases at all and
does not participate in the recipient’s
legal information activities. The
executive director’s duties are purely
administrative, and the costs associated
with their salary are allocated across all
the recipient’s funding sources as
indirect costs. Because none of the costs
associated with the executive director’s
salary are allocated to the LSC grant as
direct costs, the executive director does
not need to keep time consistent with
this part.
Example 2: A recipient’s board has
adopted a policy that management staff
who are licensed attorneys will
maintain a small caseload in addition to
their administrative responsibilities.
Costs associated with handling
individual cases must be allocated to
one of the recipient’s grants as direct
costs. Consequently, each manager must
comply with this part when recording
their time.
Example 3: A recipient’s executive
director does not handle cases on a
regular basis. The executive director’s
salary is allocated across all the
recipient’s funding sources as an
indirect cost. On the day of a court
hearing, however, a recipient attorney
could not attend due to a family
emergency. The executive director
represented the attorney’s client at the
hearing. For that pay period, the
executive director must keep their time
consistent with part 1635.
Section 1635.4 What are LSC’s
timekeeping standards?
LSC proposes to replace existing
section 1635.3 with a new section
1635.4 that adopts documentation
requirements for personal compensation
from the Uniform Guidance. Section
200.430(i) of the Uniform Guidance
requires that ‘‘[c]harges to Federal
awards for salaries and wages [ ] be
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based on records that accurately reflect
the work performed.’’ 2 CFR 200.430(i).
LSC concurs with this policy and
proposes to incorporate the
requirements contained in § 200.430(i)
in significant part.
LSC specifically seeks comment on
the question of when employees
covered by part 1635 must record their
time in a recipient’s timekeeping
system. Current section 1635.3(b)(1)
states that ‘‘[t]ime records must be
created contemporaneously[.]’’ 45 CFR
1635.3(b)(1). LSC established this
requirement in the 1996 final rule for
part 1635. 61 FR 14261, 14262, Apr. 1,
1996. LSC intended that ‘‘in most cases,
records should be created no later than
the end of the day.’’ Id. Recipients and
LSC staff alike have identified two
problems with this language. The first is
that it is not always possible for
attorneys and paralegals currently
subject to part 1635 to enter their time
by the end of the day for multiple
reasons, including lack of remote access
to the case management system. The
second is that the rule is not clear on
what type of time records must be
created by the end of the day—personal
timekeeping records or the entry of
official time into the recipient’s
timekeeping system.
LSC proposes to address the second
issue by introducing language in this
section stating that the rule applies to
the entry of time into the recipient’s
timekeeping system. LSC believes entry
of time into the recipient’s official
system is the appropriate activity to
cover in this rule rather than employees’
individual timekeeping practices.
However, LSC has not concluded what
the appropriate time frame for entering
time should be. LSC has considered
several time periods in which
employees covered by part 1635 should
enter their time into the recipient’s
official system, including by the end of
the business day; within 48 hours of the
completion of a business day; within
two business days of the completion of
a business day; within one week of the
completion of a business day; or by the
end of the pay period. LSC requests
public comment on this question.
Paragraph (a) establishes the
following requirements for recipients’
timekeeping records:
• Records are supported by a system
of internal controls that provide
reasonable assurance that charges to the
recipient’s awards are accurate,
allowable, and properly allocated;
• Records are incorporated into the
recipient’s official records;
• Records reflect the total activity for
which the recipient compensates the
employee;
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• Records encompass both LSCfunded and all other activities
compensated by the recipient on an
integrated basis, but may include the
use of subsidiary records if permitted by
the recipient’s written policies;
• Records comply with the recipient’s
established accounting policies and
procedures;
• Records support the allocation of
employees’ salary or wages across
specific activities or cost objectives if
the employees work on more than one
award or charge their salaries to one or
more awards as direct costs; and
• Records must contain specific
information for cases and matters that
will allow recipients and LSC to
connect cases and matters handled by
recipient employees to the awards that
they will be charged to.
LSC believes it is appropriate to
incorporate the documentation
standards applicable to Federal awards
for two reasons. First, many of LSC’s
also receive Federal funding and must
comply with the same requirements
under the Uniform Guidance. LSC does
not see a reason to create different
documentation standards except insofar
as LSC needs to obtain specific
information on cases, matters, and
supporting activities handled to ensure
compliance with LSC’s governing
statutes and regulations. Second, LSC
believes that allowing recipients to
develop their own internal policies for
recording and maintaining time records,
rather than continuing to dictate how
recipients keep time, will improve the
quality and accuracy of recipient
timekeeping records and the level of
compliance with part 1635.
Paragraphs (b) and (c) are taken
verbatim from the Uniform Guidance.
Paragraph (b) requires recipients to
maintain records for employees who are
not exempt from Fair Labor Standards
Act overtime requirements stating the
total number of hours worked each day.
Paragraph (c) requires recipients to use
the same documentation and standards
to justify counting salaries and wages of
staff working on the LSC grant toward
the cost matching requirements of any
Federal awards that they use to charge
the salaries to the LSC grant. This
requirement ensures that recipients
maintain consistency across funding
sources when documenting time
charged by employees to those sources.
LSC proposes to move current section
1635.3(b)(1) to paragraph (d) of this
section with revisions. Existing section
1635.3(b)(1) requires recipient attorneys
and paralegals to document their time
‘‘in increments not greater than onequarter of an hour.’’ LSC proposes to
allow recipients to establish the
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70567
increments for which employees subject
to part 1635 report their time,
recommending that the increment be no
greater than one-quarter of an hour. The
primary reason for proposing this
change is that LSC recognizes that the
same reporting increment may not work
for all its recipients. In 2018, the last
year for which numbers are available,
LSC funding represented between less
than 20% of some recipients’ total
funding and more than 80% of other
recipients’ total funding. See Lim, L.,
Layton, J., Abdelhadi, S., Bernstein, D.,
Ahmed, R. 2018. LSC by the Numbers:
The Data Underlying Legal Aid
Programs (2018). Legal Services
Corporation, Washington, DC. Overall,
LSC funding represented 34% of total
funding for civil legal aid, with the
remainder coming from sources such as
state and local appropriations, court
fees, Interest on Lawyers’ Trust
Accounts (IOLTA) income, and other
awards from federal, state, and local
governments and private foundations.
Id. LSC is sensitive to its role as a
minority funder for many of its
recipients and, accordingly, is
attempting to balance its need for
effective oversight measures with the
demands that recipients’ other funders
may place on them as a condition of
receiving funds.
Recipients also vary in the number of
funding sources they have, which
further decreases the practicality of
requiring all recipients to use the same
time increment for timekeeping. In other
words, while it may be reasonable for a
recipient who has only two or three
funding sources to require its employees
to report their time in 15-minute
increments, it may be more practical for
a recipient whose staff are funded by a
larger number of sources to keep time in
smaller increments. When a recipient
has only a small number of funding
sources, it may be appropriate for the
recipient to use a larger increment of
time for reporting, including up to as
long as half an hour or an hour. LSC
recommends that to maximize the
accuracy of reporting, recipients use
increments no larger than 15 minutes.
Although LSC does not propose
imposing a maximum increment, LSC
may consider adopting such a
requirement after receiving public
comments on this proposed rule.
LSC proposes to relocate existing
section 1635.3(d), the certification
requirement for part-time employees, to
paragraph (e) of this section with
revisions. LSC initially created this
section to require paralegals and
attorneys who work part-time for
recipients and part-time for
organizations that engage in restricted
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activities to certify on a quarterly basis
that they neither conduct restricted
activities on recipient time nor use
recipient resources to carry out such
activities. LSC proposes to rewrite this
paragraph for clarity and to eliminate
the existing language regarding de
minimis activities.
In current section 1635.3(d), part-time
attorneys and paralegals do not need to
certify when they have engaged in ‘‘de
minimis action related to a restricted
activity.’’ 45 CFR 1635.3(d). The
paragraph states that ‘‘[a]ctions
consistent with the de minimis standard
are those that meet all or most of the
following criteria: Actions that are of
little substance; require little time; are
not initiated by the part-time employee;
and, for the most part, are unavoidable.’’
Id. A review of the preamble to the 2000
final rule for part 1635 indicates that
LSC intended to exclude from the
certification requirement activities that
appear to be part of regular intake or
reception duties. LSC’s examples of de
minimis activity included answering the
phone, establishing another non-LSC
program time to discuss restricted
activity, and opening and screening
mail. Examples of activity that went
beyond the de minimis standard
included researching and preparing
legal documents, meeting with or
providing advice to the client, and
conferring with third parties on behalf
of the client.
65 FR 41879, 41881, July 7, 2000.
While LSC believes that the certification
requirement continues to be a necessary
element of ensuring recipient
compliance with the restrictions
imposed by LSC’s governing statutes, it
does not believe the language regarding
de minimis activities is needed. The
removal of this language does not reflect
a relaxation of the rule; it is merely an
administrative action intended to
simplify the rule. Part-time employees
remain prohibited from actively
engaging in restricted activities during
times they are compensated by the
recipient and using recipient resources
to engage in restricted activities and
must continue to certify on a quarterly
basis that they have done neither.
have a method for ensuring the accuracy
of timekeeping records and proper
allocation of salaries and wages charged
to awards as direct costs. In paragraph
(a), LSC proposes to require recipients
to choose one method of cross-checking
payroll records against timekeeping
records: Linking their payroll system to
their case management or manually
reconciling the records on a regular
basis. In paragraph (b), LSC proposes to
require recipients, regardless of which
method of comparing records they
choose under paragraph (a), to reconcile
their payroll and timekeeping records at
least once a year and prior to making
final entries into their accounting
records. By taking this approach in the
rule, LSC intends to allow recipients
flexibility in how they reconcile the
records supporting employee
compensation costs while still requiring
them to affirmatively compare the
records before finalizing the accounting
records for the relevant award year.
Section 1635.5 What are LSC’s
standards for ensuring the proper
allocation of employee compensation
costs across awards?
Through conducting onsite and
remote oversight activities, LSC has
experienced challenges in verifying that
salary costs allocated to the LSC grant
actually supported activities that were
properly chargeable to the LSC grant.
For that reason, LSC proposes to create
a new section requiring recipients to
Sec.
1635.1 What is the purpose of this part?
1635.2 Definitions.
1635.3 Who is covered by the timekeeping
requirement?
1635.4 What are LSC’s timekeeping
standards?
1635.5 What do recipients need to do to
link timekeeping records with case
management systems?
1635.6 Who outside the recipient has access
to these records?
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Section 1635.6 Who outside the
recipient has access to these records?
LSC proposes to make only stylistic
changes to changes to this section.
Finally, LSC seeks specific comment
on the burdens the proposed changes to
this rule may place on recipients’
resources. LSC approached this
rulemaking with the intention of
simplifying the timekeeping
requirement and decreasing recipients’
burden of compliance. LSC would
appreciate comments about the
measurable impact on employee time
and any financial expenditures that
complying with the rule as proposed
would require.
List of Subjects in 45 CFR Part 1635
Grant program—law, Legal services,
Reporting and recordkeeping
requirements.
For the reasons discussed in the
preamble, the Legal Services
Corporation proposes to revise 45 CFR
part 1635 as follows:
PART 1635—TIMEKEEPING
REQUIREMENT
Authority: 42 U.S.C. 2996g(e).
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Frm 00067
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§ 1635.1
What is the purpose of this part?
This part is intended to improve
recipient accountability for the use of all
funds by:
(a) Assuring that allocations of direct
costs to a recipient’s LSC grant pursuant
to 45 CFR part 1630 are supported by
accurate records of the cases, matters,
and supporting activities for which the
funds have been expended;
(b) Enhancing the recipient’s ability to
determine the cost of specific functions;
and
(c) Increasing the information
available to LSC for assuring recipient
compliance with Federal law and LSC
rules and regulations.
§ 1635.2
Definitions.
As used in this part—
(a) Case means a form of program
service in which a recipient employee
provides legal assistance to one or more
specific clients, including but not
limited to providing representation in
litigation, administrative proceedings,
and negotiations, and such actions as
advice, providing brief services, and
transactional assistance.
(b) Case oversight means a
supervisor’s review of a case for
regulatory compliance, consistency with
Case Service Report reporting rules, and
quality control purposes. Case oversight
activities include, but are not limited to,
review of file for retainer, citizenship
attestation or documentation of eligible
non-citizen status, and documentation
of financial eligibility determination;
review of closing codes; and review of
advice provided or pleadings filed.
(c) Matter means an action that
contributes to the overall delivery of
program services but does not involve
direct legal advice to or legal
representation of one or more specific
clients. Examples of matters include
both direct services, such as community
education presentations, operating pro
se clinics, providing information about
the availability of legal assistance, and
developing written materials explaining
legal rights and responsibilities; and
indirect services, such as training,
continuing legal education, supervision
of program services, preparing and
disseminating desk manuals, PAI
recruitment, referral, intake when no
case is undertaken, and tracking
substantive law developments.
(d) Restricted activities means those
activities that recipients may not engage
in pursuant to 45 CFR part 1610.
(e) Supporting activity means any
action that is not a case or matter.
§ 1635.3 Who is covered by the
timekeeping requirement?
Any recipient employee whose
compensation is charged to one or more
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awards as a direct cost (as defined in 45
CFR 1630.5(d)) must keep time
according to the standards set forth in
§ 1635.4.
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§ 1635.4 What are LSC’s timekeeping
standards?
(a) Standards for Documentation of
Personnel Expenses. Recipients must
base allocations of salaries and wages on
records that accurately reflect the work
performed. These records must:
(1) Be supported by a system of
internal control which provides
reasonable assurance that the charges
are accurate, allowable, and properly
allocated;
(2) Be incorporated into the
recipient’s official records;
(3) Reflect the total activity for which
the recipient compensates the
employee;
(4) Encompass both LSC-funded and
all other activities compensated by the
recipient on an integrated basis, but may
include the use of subsidiary records as
defined in the recipient’s written
policies;
(5) Comply with the recipient’s
established accounting policies and
practices;
(6) Support the distribution of the
employee’s salary or wages among
specific activities or cost objectives if
the employee works on more than one
award or an indirect cost activity and a
direct cost activity; and
(7) Contain. (i) For cases, a unique
client name or case number, the amount
of time spent on the case, a description
of the activities performed, and the
dates on which a recipient employee
worked on the case;
(ii) For matters or supporting
activities, the amount of time and type
of activity on which a recipient
employee spent time and sufficient
information to link the activity to a
specific award. For example, if a
recipient employee conducts a legal
information session on filing a pro se
divorce petition, the employee could
record ‘‘pro se divorce group
information session, 1.5 hours, LSC
grant.’’
(b) In accordance with Department of
Labor regulations implementing the Fair
Labor Standards Act (FLSA) (29 CFR
part 516), charges for the salaries and
wages of nonexempt employees, in
addition to the supporting
documentation described in this
section, must also be supported by
records indicating the total number of
hours worked each day.
(c) Salaries and wages of employees
used in meeting cost sharing or
matching requirements of Federal
awards must be supported in the same
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manner as salaries and wages claimed
for reimbursement from Federal awards.
(d) Recipients may establish the
increments of time for which employees
must record their activities (e.g., .25
hours, one-sixth of an hour). LSC
recommends that recipients require
employees to record their time in
increments no greater than one quarter
of an hour.
(e) Certification requirement for parttime employees. (1) Any recipient
employee subject to this part who works
part-time for the recipient and part-time
for an organization that engages in
restricted activities shall certify in
writing that the employee has not
engaged in restricted activity during any
time for which the employee was
compensated by the recipient or has not
used recipient resources to carry out
restricted activities.
(2) Employees shall make the required
certification on a quarterly basis using a
form determined by LSC.
§ 1635.5 What are LSC’s standards for
ensuring the accuracy of timekeeping
records and proper allocation of employee
compensation costs across awards?
(a) A recipient must do one of the
following:
(1) Link its payroll records to its case
management system; or
(2) For each employee described in
1635.3, reconcile the time reported in
payroll records with the time recorded
in the timekeeping records. Recipients
must conduct this manual reconciliation
on a regular basis required by their
established accounting policies and
practices.
(b) Recipients must reconcile their
payroll and timekeeping records at least
once a year before final entries are
entered into the accounting system.
§ 1635.6 Who outside the recipient has
access to these records?
Recipients must make time records
required by this section available for
examination by auditors and
representatives of LSC, and by any other
person or entity statutorily entitled to
access to such records. LSC shall not
disclose any time record except to a
Federal, State, or local law enforcement
official or to an official of an appropriate
bar association for the purpose of
enabling such bar association official to
conduct an investigation of an alleged
violation of the rules of professional
conduct.
Dated: October 22, 2020.
Stefanie Davis,
Senior Assistant General Counsel.
[FR Doc. 2020–23811 Filed 11–4–20; 8:45 am]
BILLING CODE 7050–01–P
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70569
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
[MB Docket No. 20–343; FCC 20–145; FRS
17191]
FCC Seeks Comment on Proposed
Application Limit for NCE FM New
Station Applications in Upcoming 2021
Filing Window
Federal Communications
Commission.
ACTION: Proposed rule; proposed action.
AGENCY:
The Commission recently
adopted changes to its rules and
procedures for considering competing
applications for new noncommercial
educational (NCE) FM radio stations in
Reexamination of the Comparative
Standards and Procedures for Licensing
Noncommercial Educational Broadcast
Stations and Low Power FM Stations,
MB Docket No. 19–3, Report and Order.
In this document, the Commission
announces that it is directing the Media
Bureau (Bureau) to open a filing
window for NCE FM new station
applications for the FM reserved band
(channels 201–220). The Bureau will
issue a future Public Notice to announce
the specific dates of the 2021 window.
The Commission also seeks comment on
a proposal establishing a ten-application
limit in the upcoming 2021 filing
window.
SUMMARY:
Comments are due on or before
November 20, 2020, and reply
comments are due or before November
30, 2020.
ADDRESSES: You may submit comments,
identified by MB Docket No. 20–343, by
any of the following methods:
• Electronic Filers: Comments may be
filed electronically using the internet by
accessing the Federal Communications
Commission’s ECFS website: https://
apps.fcc.gov/ecfs/. Follow the
instructions for submitting comments.
• Paper Filers: Parties who choose to
file by paper must file an original and
one copy of each filing. If more than one
docket or rulemaking number appears in
the caption of this proceeding, filers
must submit two additional copies for
each additional docket or rulemaking
number.
Filings can be sent by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
• Commercial overnight mail (other
than U.S. Postal Service Express Mail
DATES:
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Agencies
[Federal Register Volume 85, Number 215 (Thursday, November 5, 2020)]
[Proposed Rules]
[Pages 70564-70569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23811]
=======================================================================
-----------------------------------------------------------------------
LEGAL SERVICES CORPORATION
45 CFR Part 1635
Timekeeping Requirement
AGENCY: Legal Services Corporation.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Legal Services Corporation (LSC) is proposing to amend its
rule establishing timekeeping requirements for LSC funding recipients.
DATES: Comments must be received by February 3, 2021.
ADDRESSES: You may submit comments by any of the following methods:
Federal Rulemaking Portal: Follow the instructions for
submitting comments.
Email: [email protected]. Include ``Part 1635
Rulemaking'' in the subject line of the message.
Fax: (202) 337-6519.
Mail: Stefanie K. Davis, Senior Assistant General Counsel,
Legal Services Corporation, 3333 K Street NW,
[[Page 70565]]
Washington, DC 20007, ATTN: Part 1635 Rulemaking.
Hand Delivery/Courier: Stefanie K. Davis, Senior Assistant
General Counsel, Legal Services Corporation, 3333 K Street NW,
Washington, DC 20007, ATTN: Part 1635 Rulemaking.
Instructions: LSC prefers electronic submissions via email with
attachments in Acrobat PDF format. LSC will not consider written
comments sent to any other address or received after the end of the
comment period.
FOR FURTHER INFORMATION CONTACT: Stefanie K. Davis, Senior Assistant
General Counsel, Legal Services Corporation, 3333 K Street NW,
Washington, DC 20007; (202) 295-1563 (phone), (202) 337-6519 (fax), or
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
In 1995, LSC initiated rulemaking to require recipient employees to
keep records of time spent working on LSC-funded activities. 60 FR
48956, Sep. 21, 1995. LSC took this step to ``improve accountability of
recipients for their Corporation funds, and in response to concerns
expressed during Congressional hearings.'' Id. LSC wanted to assure
that recipients maintained adequate documentation to support allocation
of costs to the LSC grant. Id. at 48957. Consequently, LSC intended the
rule ``to require all recipients to account for the time spent on all
cases, matters and other activities by their attorneys and paralegals,
whether funded by [LSC] or other sources.'' Id. (emphasis added). LSC
did not define either attorney or paralegal, although LSC did define
the terms cases and matters.\1\ Id. LSC did not prescribe either the
format or the content of the required timekeeping reports. Id.
---------------------------------------------------------------------------
\1\ LSC's regulations at part 1600 define terms used throughout
the regulations. 45 CFR part 1600. These terms govern unless LSC
defined the term differently in a part. For purposes of this
discussion, the Part 1600 definition of the term attorney (``a
person who provides legal assistance to eligible clients and who is
authorized to practice law in the jurisdiction where assistance is
rendered'') applies. Id. Sec. 1600.1. There is no part 1600
definition for the term paralegal.
---------------------------------------------------------------------------
After receiving public comment, LSC adopted the proposed rule as
final, with limited changes. 61 FR 14261, Apr. 1, 1996. In the preamble
to the final rule, LSC stated that the rule applied to recipient
attorneys and paralegals regardless of whether their salaries were paid
using LSC funds. Id. Applying the rule to all attorneys and paralegals,
LSC explained, reflected language that Congress included in a version
of the fiscal year 1996 appropriations act that it passed, but the
President vetoed. Id. LSC retained the requirement because it
anticipated that Congress and the President would agree on legislation
containing a similar requirement for fiscal year 1996, which they did.
Sec. 504(a)(10), Public Law 104-134, 110 Stat. 1321, 1321-54 (1996)
(stating that LSC could not award appropriated funds to any person or
entity unless ``such person or entity agrees to maintain records of
time spent on each case or matter with respect to which the person or
entity is engaged.'').
In the preamble to the final rule, LSC explained how it expected
recipients to implement the requirement to maintain ``contemporaneous''
time records. LSC stated that ``contemporaneous'' meant ``in most
cases, by the end of the day.'' 61 FR at 14262.
LSC initiated its first revision of part 1635 in 1998. That year,
the Office of Inspector General (OIG) conducted an audit of recipients'
compliance with specific regulations, including part 1635, and issued a
report that formed the basis for Management's recommended changes. In
the report, OIG stated its finding that, based on records maintained in
compliance with part 1635, it could not tell whether part-time
employees of an LSC funding recipient engaged in restricted work during
LSC-funded time. 63 FR 56594, Oct. 22, 1998.
In response to OIG's findings, LSC proposed two changes. The first
was to require recipients to ensure that the time records for both
full- and part-time employees were consistent with their payroll time
and attendance records. In other words, ``the time spent by an employee
must at least add up to the amount reflected in the attendance
records.'' Id. at 56595. LSC also proposed to require full-time and
part-time attorneys and paralegals to record, for each case, matter, or
supporting activity that they handled, the date and exact time of day
they worked on that activity. Id. Alternatively, LSC proposed that
part-time attorneys and paralegals could certify that they did not
engage in restricted activities during the time they were working for
the recipient. Id.
LSC did not finalize its revisions to part 1635 until 2000. At that
time, LSC adopted the rule with two changes relevant here. 65 FR 41879,
Jul. 7, 2000. First, LSC removed the proposed text requiring attorney
and paralegal time records to be consistent with their payroll time and
attendance records. Id. at 41880. Several commenters on the proposed
rule expressed concern that a rule requiring employee time records to
match the payroll records would put recipients at risk of violating the
Fair Labor Standards Act. Id. Although LSC did not agree with the
commenter raising the concern, LSC removed the language because it
believed the language was not necessary. Id. Second, LSC adopted the
certification requirement for part-time attorneys and paralegals. Id.
Put differently, part-time attorneys and paralegals do not have to
report the date and exact time of day that they worked on cases,
matter, or supporting activities, but must certify that they did not
work on restricted activities during the hours they worked for a
recipient.
Management believes that regulatory action is justified at this
time for three reasons. First, the lack of a definition for the term
paralegal creates a lack of uniformity across recipients regarding
which employees must keep time. In other words, some recipients employ
staff who are called paralegals, but who do only administrative work,
while others employ staff who perform substantive legal work under an
attorney's supervision or who have satisfied their state's requirements
for holding oneself out as a paralegal, but who may not have the title
of paralegal. Because the regulation does not define the term
paralegal, it is unclear whether some or all recipient employees
described in the preceding sentence must keep time consistent with part
1635. Consequently, LSC cannot be certain that part 1635 covers all
recipient employees who are doing substantive work on the LSC grant,
which appears to be what LSC intended when it originally drafted the
rule to cover attorneys and paralegals. LSC proposes to remedy this
problem by revising the language to include all employee staff,
regardless of qualification or title, who are doing substantive work on
identifiable awards. Conversely, employee staff who are not doing
substantive work on identifiable awards need not record their time
under part 1635.
Second, the federal government rules governing recipient
timekeeping have changed significantly, as have best practices for
nonprofit timekeeping. LSC believes it is reasonable to reconsider the
requirements of part 1635 in light of these advances and determine
whether to revise the rule to reflect the new standards. Finally, LSC
proposes to remove any provisions of the rule that are obsolete.
LSC added rulemaking on part 1635 to its annual rulemaking agenda
in April 2016. On January 30, 2020, the Operations and Regulations
Committee (``Committee'') of the Board voted to recommend that the
Board authorize rulemaking on part 1635. The Board
[[Page 70566]]
voted to authorize rulemaking on January 31, 2020. On October 19, 2020,
the Committee voted to recommend that the Board approve publication of
an NPRM in the Federal Register with a 60-day public comment period. On
October 20, 2020, the Board accepted the Committee's recommendation and
voted to approve publication of the NPRM.
Materials regarding this rulemaking are available in the open
rulemaking section of LSC's website at https://www.lsc.gov/about-lsc/laws-regulations-guidance/rulemaking.
II. Section-by-Section Discussion of Proposed Changes
Section 1635.1 What is the purpose of this section?
LSC proposes to make technical edits to this section for clarity.
Section 1635.2 Definitions
LSC proposes to revise the definition of the term case in paragraph
(a) to be more consistent with the definition of the same term in the
Case Service Report Handbook (CSR Handbook). In the CSR Handbook, LSC
defined a case as ``the provision of LSC-permissible legal assistance
to an eligible client with a legal problem, or a set of closely related
legal problems, accepted for assistance in accordance with the
requirements of the LSC Act, appropriations acts, regulations, and
other applicable law.'' See Legal Services Corporation, Case Service
Reporting Handbook, at 2 (2017). LSC is now proposing to revise the
first sentence of the definition in part 1635 to read ``Case means a
form of program service in which a recipient employee provides legal
assistance to one or more specific clients[. . .]''
LSC proposes to introduce a new definition for the term case
oversight in paragraph (b) of this section. The new definition is
necessary to ensure that supervisors accurately report the time they
spend examining attorneys' and paralegals' case files for regulatory
compliance, CSR compliance, and quality of legal assistance provided.
LSC proposes to relocate the definitions in existing paragraphs (b)
through (d) of this section to paragraphs (c) through (e) in the
revised rule with only minor technical edits.
Section 1635.3 Who is covered by the timekeeping requirement?
LSC proposes to create a new section dedicated to explaining which
recipient employees must report time consistent with the requirements
of this section. LSC proposes to replace the language limiting the
application to part 1635 to recipient employees and paralegals with
language extending part 1635 to any recipient employee whose salary is
allocated, in whole or in part, to any of the recipient's funding
sources as a direct cost.
As noted earlier in this preamble, LSC has determined that the
current rule's use of the term paralegal, without a definition, makes
it difficult to ensure that all recipient employees who do substantive
work on the recipient's awards accounts for the time they spend on
cases, matters, and supporting activities. Additionally, since LSC last
revised part 1635 in 2000, states have explored novel structures that
would permit nonlawyers, as well as paralegals, to practice law in a
limited fashion. For example, in 2013, the Washington State Bar
Association initiated the Limited License Legal Technician (LLLT)
program, through which individuals could become licensed to provide
litigants with a limited range of legal services in family law.
Similarly, the Arizona Supreme Court recently adopted changes to the
state rules governing the practice of law that will allow legal
paraprofessionals to provide legal services in family law, limited
criminal cases where no jail time is involved, limited civil cases, and
administrative cases where permitted by the agency. As more states
expand access to justice by authorizing nonlawyers to provide services
traditionally limited to licensed attorneys, LSC anticipates that legal
services providers will hire these paraprofessionals to assist their
clients.
The purpose of part 1635 is to establish the standards for
reporting time that any employee of an LSC funding recipient who
provides legal assistance to clients must follow. LSC believes that
removing the current language limiting the timekeeping requirement to
attorneys and an undefined group of paralegals and instead tying the
requirement to employees whose salaries are charged to awards as direct
costs is necessary to ensure that the recipient's funds are spent in
compliance with LSC's governing statutes and regulations. In other
words, if a recipient employee handles cases and the recipient
allocates the costs associated with those cases to the LSC grant as
direct costs, then that employee must keep time consistent with part
1635, regardless of their title.
LSC cross-references the standards for allocating costs as direct
costs contained in 45 CFR 1630.5(d) as the basis for determining which
recipient employees must keep time under this section. In that section,
LSC describes direct costs as including ``salaries and wages of
recipient staff who are working on cases or matters that are identified
with specific grants or contracts[.]'' 45 CFR 1630.5(d). This
connection means that a recipient employee who enters time worked on a
case into the case management system with a code that designates the
case as an LSC-funded case must comply with the timekeeping
requirements contained in part 1635. If adopted, this proposed change
would mean that a recipient employee who does not handle cases as part
of their regular duties but who accepts a case or steps into a case on
an emergency basis would have to keep time consistent with part 1635
for the periods in which that employee's salary is being allocated to
an award as a direct cost.
Example 1: A recipient's executive director does not handle cases
at all and does not participate in the recipient's legal information
activities. The executive director's duties are purely administrative,
and the costs associated with their salary are allocated across all the
recipient's funding sources as indirect costs. Because none of the
costs associated with the executive director's salary are allocated to
the LSC grant as direct costs, the executive director does not need to
keep time consistent with this part.
Example 2: A recipient's board has adopted a policy that management
staff who are licensed attorneys will maintain a small caseload in
addition to their administrative responsibilities. Costs associated
with handling individual cases must be allocated to one of the
recipient's grants as direct costs. Consequently, each manager must
comply with this part when recording their time.
Example 3: A recipient's executive director does not handle cases
on a regular basis. The executive director's salary is allocated across
all the recipient's funding sources as an indirect cost. On the day of
a court hearing, however, a recipient attorney could not attend due to
a family emergency. The executive director represented the attorney's
client at the hearing. For that pay period, the executive director must
keep their time consistent with part 1635.
Section 1635.4 What are LSC's timekeeping standards?
LSC proposes to replace existing section 1635.3 with a new section
1635.4 that adopts documentation requirements for personal compensation
from the Uniform Guidance. Section 200.430(i) of the Uniform Guidance
requires that ``[c]harges to Federal awards for salaries and wages [ ]
be
[[Page 70567]]
based on records that accurately reflect the work performed.'' 2 CFR
200.430(i). LSC concurs with this policy and proposes to incorporate
the requirements contained in Sec. 200.430(i) in significant part.
LSC specifically seeks comment on the question of when employees
covered by part 1635 must record their time in a recipient's
timekeeping system. Current section 1635.3(b)(1) states that ``[t]ime
records must be created contemporaneously[.]'' 45 CFR 1635.3(b)(1). LSC
established this requirement in the 1996 final rule for part 1635. 61
FR 14261, 14262, Apr. 1, 1996. LSC intended that ``in most cases,
records should be created no later than the end of the day.'' Id.
Recipients and LSC staff alike have identified two problems with this
language. The first is that it is not always possible for attorneys and
paralegals currently subject to part 1635 to enter their time by the
end of the day for multiple reasons, including lack of remote access to
the case management system. The second is that the rule is not clear on
what type of time records must be created by the end of the day--
personal timekeeping records or the entry of official time into the
recipient's timekeeping system.
LSC proposes to address the second issue by introducing language in
this section stating that the rule applies to the entry of time into
the recipient's timekeeping system. LSC believes entry of time into the
recipient's official system is the appropriate activity to cover in
this rule rather than employees' individual timekeeping practices.
However, LSC has not concluded what the appropriate time frame for
entering time should be. LSC has considered several time periods in
which employees covered by part 1635 should enter their time into the
recipient's official system, including by the end of the business day;
within 48 hours of the completion of a business day; within two
business days of the completion of a business day; within one week of
the completion of a business day; or by the end of the pay period. LSC
requests public comment on this question.
Paragraph (a) establishes the following requirements for
recipients' timekeeping records:
Records are supported by a system of internal controls
that provide reasonable assurance that charges to the recipient's
awards are accurate, allowable, and properly allocated;
Records are incorporated into the recipient's official
records;
Records reflect the total activity for which the recipient
compensates the employee;
Records encompass both LSC-funded and all other activities
compensated by the recipient on an integrated basis, but may include
the use of subsidiary records if permitted by the recipient's written
policies;
Records comply with the recipient's established accounting
policies and procedures;
Records support the allocation of employees' salary or
wages across specific activities or cost objectives if the employees
work on more than one award or charge their salaries to one or more
awards as direct costs; and
Records must contain specific information for cases and
matters that will allow recipients and LSC to connect cases and matters
handled by recipient employees to the awards that they will be charged
to.
LSC believes it is appropriate to incorporate the documentation
standards applicable to Federal awards for two reasons. First, many of
LSC's also receive Federal funding and must comply with the same
requirements under the Uniform Guidance. LSC does not see a reason to
create different documentation standards except insofar as LSC needs to
obtain specific information on cases, matters, and supporting
activities handled to ensure compliance with LSC's governing statutes
and regulations. Second, LSC believes that allowing recipients to
develop their own internal policies for recording and maintaining time
records, rather than continuing to dictate how recipients keep time,
will improve the quality and accuracy of recipient timekeeping records
and the level of compliance with part 1635.
Paragraphs (b) and (c) are taken verbatim from the Uniform
Guidance. Paragraph (b) requires recipients to maintain records for
employees who are not exempt from Fair Labor Standards Act overtime
requirements stating the total number of hours worked each day.
Paragraph (c) requires recipients to use the same documentation and
standards to justify counting salaries and wages of staff working on
the LSC grant toward the cost matching requirements of any Federal
awards that they use to charge the salaries to the LSC grant. This
requirement ensures that recipients maintain consistency across funding
sources when documenting time charged by employees to those sources.
LSC proposes to move current section 1635.3(b)(1) to paragraph (d)
of this section with revisions. Existing section 1635.3(b)(1) requires
recipient attorneys and paralegals to document their time ``in
increments not greater than one-quarter of an hour.'' LSC proposes to
allow recipients to establish the increments for which employees
subject to part 1635 report their time, recommending that the increment
be no greater than one-quarter of an hour. The primary reason for
proposing this change is that LSC recognizes that the same reporting
increment may not work for all its recipients. In 2018, the last year
for which numbers are available, LSC funding represented between less
than 20% of some recipients' total funding and more than 80% of other
recipients' total funding. See Lim, L., Layton, J., Abdelhadi, S.,
Bernstein, D., Ahmed, R. 2018. LSC by the Numbers: The Data Underlying
Legal Aid Programs (2018). Legal Services Corporation, Washington, DC.
Overall, LSC funding represented 34% of total funding for civil legal
aid, with the remainder coming from sources such as state and local
appropriations, court fees, Interest on Lawyers' Trust Accounts (IOLTA)
income, and other awards from federal, state, and local governments and
private foundations. Id. LSC is sensitive to its role as a minority
funder for many of its recipients and, accordingly, is attempting to
balance its need for effective oversight measures with the demands that
recipients' other funders may place on them as a condition of receiving
funds.
Recipients also vary in the number of funding sources they have,
which further decreases the practicality of requiring all recipients to
use the same time increment for timekeeping. In other words, while it
may be reasonable for a recipient who has only two or three funding
sources to require its employees to report their time in 15-minute
increments, it may be more practical for a recipient whose staff are
funded by a larger number of sources to keep time in smaller
increments. When a recipient has only a small number of funding
sources, it may be appropriate for the recipient to use a larger
increment of time for reporting, including up to as long as half an
hour or an hour. LSC recommends that to maximize the accuracy of
reporting, recipients use increments no larger than 15 minutes.
Although LSC does not propose imposing a maximum increment, LSC may
consider adopting such a requirement after receiving public comments on
this proposed rule.
LSC proposes to relocate existing section 1635.3(d), the
certification requirement for part-time employees, to paragraph (e) of
this section with revisions. LSC initially created this section to
require paralegals and attorneys who work part-time for recipients and
part-time for organizations that engage in restricted
[[Page 70568]]
activities to certify on a quarterly basis that they neither conduct
restricted activities on recipient time nor use recipient resources to
carry out such activities. LSC proposes to rewrite this paragraph for
clarity and to eliminate the existing language regarding de minimis
activities.
In current section 1635.3(d), part-time attorneys and paralegals do
not need to certify when they have engaged in ``de minimis action
related to a restricted activity.'' 45 CFR 1635.3(d). The paragraph
states that ``[a]ctions consistent with the de minimis standard are
those that meet all or most of the following criteria: Actions that are
of little substance; require little time; are not initiated by the
part-time employee; and, for the most part, are unavoidable.'' Id. A
review of the preamble to the 2000 final rule for part 1635 indicates
that LSC intended to exclude from the certification requirement
activities that appear to be part of regular intake or reception
duties. LSC's examples of de minimis activity included answering the
phone, establishing another non-LSC program time to discuss restricted
activity, and opening and screening mail. Examples of activity that
went beyond the de minimis standard included researching and preparing
legal documents, meeting with or providing advice to the client, and
conferring with third parties on behalf of the client.
65 FR 41879, 41881, July 7, 2000. While LSC believes that the
certification requirement continues to be a necessary element of
ensuring recipient compliance with the restrictions imposed by LSC's
governing statutes, it does not believe the language regarding de
minimis activities is needed. The removal of this language does not
reflect a relaxation of the rule; it is merely an administrative action
intended to simplify the rule. Part-time employees remain prohibited
from actively engaging in restricted activities during times they are
compensated by the recipient and using recipient resources to engage in
restricted activities and must continue to certify on a quarterly basis
that they have done neither.
Section 1635.5 What are LSC's standards for ensuring the proper
allocation of employee compensation costs across awards?
Through conducting onsite and remote oversight activities, LSC has
experienced challenges in verifying that salary costs allocated to the
LSC grant actually supported activities that were properly chargeable
to the LSC grant. For that reason, LSC proposes to create a new section
requiring recipients to have a method for ensuring the accuracy of
timekeeping records and proper allocation of salaries and wages charged
to awards as direct costs. In paragraph (a), LSC proposes to require
recipients to choose one method of cross-checking payroll records
against timekeeping records: Linking their payroll system to their case
management or manually reconciling the records on a regular basis. In
paragraph (b), LSC proposes to require recipients, regardless of which
method of comparing records they choose under paragraph (a), to
reconcile their payroll and timekeeping records at least once a year
and prior to making final entries into their accounting records. By
taking this approach in the rule, LSC intends to allow recipients
flexibility in how they reconcile the records supporting employee
compensation costs while still requiring them to affirmatively compare
the records before finalizing the accounting records for the relevant
award year.
Section 1635.6 Who outside the recipient has access to these records?
LSC proposes to make only stylistic changes to changes to this
section.
Finally, LSC seeks specific comment on the burdens the proposed
changes to this rule may place on recipients' resources. LSC approached
this rulemaking with the intention of simplifying the timekeeping
requirement and decreasing recipients' burden of compliance. LSC would
appreciate comments about the measurable impact on employee time and
any financial expenditures that complying with the rule as proposed
would require.
List of Subjects in 45 CFR Part 1635
Grant program--law, Legal services, Reporting and recordkeeping
requirements.
For the reasons discussed in the preamble, the Legal Services
Corporation proposes to revise 45 CFR part 1635 as follows:
PART 1635--TIMEKEEPING REQUIREMENT
Sec.
1635.1 What is the purpose of this part?
1635.2 Definitions.
1635.3 Who is covered by the timekeeping requirement?
1635.4 What are LSC's timekeeping standards?
1635.5 What do recipients need to do to link timekeeping records
with case management systems?
1635.6 Who outside the recipient has access to these records?
Authority: 42 U.S.C. 2996g(e).
Sec. 1635.1 What is the purpose of this part?
This part is intended to improve recipient accountability for the
use of all funds by:
(a) Assuring that allocations of direct costs to a recipient's LSC
grant pursuant to 45 CFR part 1630 are supported by accurate records of
the cases, matters, and supporting activities for which the funds have
been expended;
(b) Enhancing the recipient's ability to determine the cost of
specific functions; and
(c) Increasing the information available to LSC for assuring
recipient compliance with Federal law and LSC rules and regulations.
Sec. 1635.2 Definitions.
As used in this part--
(a) Case means a form of program service in which a recipient
employee provides legal assistance to one or more specific clients,
including but not limited to providing representation in litigation,
administrative proceedings, and negotiations, and such actions as
advice, providing brief services, and transactional assistance.
(b) Case oversight means a supervisor's review of a case for
regulatory compliance, consistency with Case Service Report reporting
rules, and quality control purposes. Case oversight activities include,
but are not limited to, review of file for retainer, citizenship
attestation or documentation of eligible non-citizen status, and
documentation of financial eligibility determination; review of closing
codes; and review of advice provided or pleadings filed.
(c) Matter means an action that contributes to the overall delivery
of program services but does not involve direct legal advice to or
legal representation of one or more specific clients. Examples of
matters include both direct services, such as community education
presentations, operating pro se clinics, providing information about
the availability of legal assistance, and developing written materials
explaining legal rights and responsibilities; and indirect services,
such as training, continuing legal education, supervision of program
services, preparing and disseminating desk manuals, PAI recruitment,
referral, intake when no case is undertaken, and tracking substantive
law developments.
(d) Restricted activities means those activities that recipients
may not engage in pursuant to 45 CFR part 1610.
(e) Supporting activity means any action that is not a case or
matter.
Sec. 1635.3 Who is covered by the timekeeping requirement?
Any recipient employee whose compensation is charged to one or more
[[Page 70569]]
awards as a direct cost (as defined in 45 CFR 1630.5(d)) must keep time
according to the standards set forth in Sec. 1635.4.
Sec. 1635.4 What are LSC's timekeeping standards?
(a) Standards for Documentation of Personnel Expenses. Recipients
must base allocations of salaries and wages on records that accurately
reflect the work performed. These records must:
(1) Be supported by a system of internal control which provides
reasonable assurance that the charges are accurate, allowable, and
properly allocated;
(2) Be incorporated into the recipient's official records;
(3) Reflect the total activity for which the recipient compensates
the employee;
(4) Encompass both LSC-funded and all other activities compensated
by the recipient on an integrated basis, but may include the use of
subsidiary records as defined in the recipient's written policies;
(5) Comply with the recipient's established accounting policies and
practices;
(6) Support the distribution of the employee's salary or wages
among specific activities or cost objectives if the employee works on
more than one award or an indirect cost activity and a direct cost
activity; and
(7) Contain. (i) For cases, a unique client name or case number,
the amount of time spent on the case, a description of the activities
performed, and the dates on which a recipient employee worked on the
case;
(ii) For matters or supporting activities, the amount of time and
type of activity on which a recipient employee spent time and
sufficient information to link the activity to a specific award. For
example, if a recipient employee conducts a legal information session
on filing a pro se divorce petition, the employee could record ``pro se
divorce group information session, 1.5 hours, LSC grant.''
(b) In accordance with Department of Labor regulations implementing
the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the
salaries and wages of nonexempt employees, in addition to the
supporting documentation described in this section, must also be
supported by records indicating the total number of hours worked each
day.
(c) Salaries and wages of employees used in meeting cost sharing or
matching requirements of Federal awards must be supported in the same
manner as salaries and wages claimed for reimbursement from Federal
awards.
(d) Recipients may establish the increments of time for which
employees must record their activities (e.g., .25 hours, one-sixth of
an hour). LSC recommends that recipients require employees to record
their time in increments no greater than one quarter of an hour.
(e) Certification requirement for part-time employees. (1) Any
recipient employee subject to this part who works part-time for the
recipient and part-time for an organization that engages in restricted
activities shall certify in writing that the employee has not engaged
in restricted activity during any time for which the employee was
compensated by the recipient or has not used recipient resources to
carry out restricted activities.
(2) Employees shall make the required certification on a quarterly
basis using a form determined by LSC.
Sec. 1635.5 What are LSC's standards for ensuring the accuracy of
timekeeping records and proper allocation of employee compensation
costs across awards?
(a) A recipient must do one of the following:
(1) Link its payroll records to its case management system; or
(2) For each employee described in 1635.3, reconcile the time
reported in payroll records with the time recorded in the timekeeping
records. Recipients must conduct this manual reconciliation on a
regular basis required by their established accounting policies and
practices.
(b) Recipients must reconcile their payroll and timekeeping records
at least once a year before final entries are entered into the
accounting system.
Sec. 1635.6 Who outside the recipient has access to these records?
Recipients must make time records required by this section
available for examination by auditors and representatives of LSC, and
by any other person or entity statutorily entitled to access to such
records. LSC shall not disclose any time record except to a Federal,
State, or local law enforcement official or to an official of an
appropriate bar association for the purpose of enabling such bar
association official to conduct an investigation of an alleged
violation of the rules of professional conduct.
Dated: October 22, 2020.
Stefanie Davis,
Senior Assistant General Counsel.
[FR Doc. 2020-23811 Filed 11-4-20; 8:45 am]
BILLING CODE 7050-01-P