Employers May Soon See Reduced Regulation

Employers throughout the country will very likely face fewer regulatory burdens in the next four years.  President Trump recently signed an executive order directing federal agencies to eliminate two current regulations for every new regulation they implement (the “Executive Order”).[1] President Trump stated one of the goals of the Executive Order will be to help grow business by reducing regulation, and further explained that he wants to eliminate “a little more than 75 percent” of current regulations.[2]  President Trump’s Executive Order and comment clearly signal a reversal from the previous administration’s philosophy concerning regulations, and many business groups and associations have applauded the change.[3]   

Ultimately, the Executive Order may lead to the elimination of several key employment-related regulations, including the Department of Labor’s (“DOL”) Overtime Rule (see Related Article),[4] the Equal Employment Opportunity Commission’s (“EEOC”) compensation data reporting requirement,[5] and the Occupational Safety and Hazard Administration’s (“OSHA”) injury reporting rule.[6] 

While most employers are in favor of reducing their regulatory burdens, employers should be aware that actually repealing regulations is often as challenging as the rulemaking process itself.  For each regulation identified to eliminate, the agency must announce its plan for removing the regulation, draft a proposal removing the rule, solicit and address shareholders’ feedback and comments on the agency’s proposed plan, and ultimately finalize the regulation repealing the rule.[7]  This process can often take several months, if not years.  Accordingly, while many employers will likely benefit from the reduced regulation, they should not expect quick removal of any regulation and must continue to comply with the regulation until it has been finalized and eliminated.

Campbell Litigation will continue to track this development and report back when further updates are available.

[1] Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs, 2017 WL 394070 (White House).  The Executive Order does not apply to “(a) regulations issued with respect to a military, national security, or foreign affairs function of the United States; (b) regulations related to agency organization, management, or personnel; or (c) any other category of regulations exempted by the Director [of the Office of Management and Budget].”

[2] Brian Naylor, Trump Acts to Roll Back Regulations on Businesses, NPR.org (Jan. 30, 2017) (available at http://www.npr.org/2017/01/30/512445032/trump-acts-to-roll-back-regulations-on-businesses).

[3] Christian Schappel, Trump’s latest order: ‘Cut two existing regulations for every new one’, HR Morning (Feb. 1, 2017) (available at: http://www.hrmorning.com/trumps-latest-order-cut-two-existing-regulations-for-every-new-one/) (last accessed Feb. 2, 2017). Braden Campbell, Trump Reg Order Hammers Home Employment Policy Shift, Law360 (Jan. 30, 2017) (available at: https://www.law360.com/articles/886177/trump-reg-order-hammers-home-employment-policy-shift) (last accessed Feb. 2, 2017); Naylor, supra note 2 (quoting the National Federation of Independent Business as describing the Executive Order “a good first step in the long road toward eliminating ball-and-chain regulations”).

[4] The DOL’s Overtime Rule would have increased the minimum salary threshold for White-Collar employees to be exempt from overtime from $455 per week ($23,660 per year) to $913 per week ($47,476 per year).  In November, a federal judge in the United States District Court for the Eastern District of Texas granted a nationwide preliminary injunction that temporarily enjoins the enforcement of the DOL’s Overtime Rule. 

[5] The EEOC recently changed its annual data collection procedures to require employers with 100 or more workers to inform the EEOC how much employees in certain protected classes earn.  See Campbell, supra note 3.

[6] This rule took effect in December 2016, and requires employers to report certain workplace injuries and illnesses to OSHA.

[7] See Campbell, supra note 3.

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