Typically with an incoming administration there is a waiting period of sorts before changes in pending and certainly existing regulations kick in. The current administration, however, appears to be working at an accelerated pace toward upending the status quo. So, it appears time for a quick check-in on where we are and what to expect.
On Inauguration day, White House Chief of Staff Reince Priebus Jan. 20 instructed federal agencies to freeze all pending regulations, a move that seems to include a number of labor and employment initiatives that were in the works under the Obama administration.
This type of freeze is not unusual when a new president takes office. An action of this nature does not necessarily mean that significant changes are coming, but given candidate Trump’s campaign promise to roll back regulation on business, we can at least predict that the administration will be in no rush to move on the pending matters.
Priebus ordered the agencies to delay sending new regulations to the Office of Management and Budget and to postpone for at least 60 days all regulations which have been published but are not yet in effect. This action may have been designed to permanently stall implication of the Labor Department’s overtime rule which was to have gone into effect on December 1 but for an injunction out of a federal court in Texas. It may also delay or derail regulations to expand federal contractor disclosure requirements and require employers to provide information about union-avoidance activities.
Of significant interest to larger employers is the fact that it may also delay the new pay data disclosure requirements put in place by the Equal Employment Opportunity Commission (the “EEOC”). The expansion of the EEO-1 reporting requirement was set to go into effect in March 2018.
With respect to the overtime rule, more litigation is expected. Employee advocates will argue that Priebus’ letter does not impact the overtime rule which had already been published as a final rule before the election. The Texas lawsuit will likely move forward even if the Trump administration and its choice to head the Department of Labor (“DOL”), Andrew Puzder (who has not yet been confirmed), decide to abandon the defense of the rule. Advocacy groups may push the litigation forward, or the DOL, under new leadership, may choose to revise the rule to make the change in the salary test less dramatic and more palatable for the businesses most impacted.
The next significant development will be the confirmation (or not) of Puzder, who is known to have been a critic of such longstanding traditions, such as the federal minimum wage. The next several months are likely to be full of interesting changes upon which employers should keep a close eye.