As the 115th Congress begins its term, certain regulations that went into effect during the Obama Administration are under fire due to an obscure rule. Congress passed the Congressional Review Act (CRA) in 1996 to block significant administrative regulations before, and in some cases even after, they take effect. The CRA requires federal agencies, such as the Department of Labor, to submit to Congress a copy of the final regulation and a report explaining the rule.
If the rule is expected to impact the economy by more than $100 million, it is considered to be a major rule. A major rule can only take effect 60 calendar days after the agency submits the regulation and report to Congress. Congress then has 60 session days to review the regulation. Where there are less than 60 session days in a legislative session, the new Congress will have 45 session days at the start of its new term to consider the rule. This gives Congress the opportunity to pass a joint resolution of disapproval. If the President signs the joint resolution, or Congress overrides a Presidential veto, the agency is prohibited from issuing a new regulation that is substantially similar to the failed one. Importantly, the Act prohibits judicial review of any action made pursuant to the CRA.
Since the CRA was passed, federal agencies have submitted over 72,000 final rules to Congress, but only one so far has been overturned pursuant to the Act. The Occupational Safety and Health Administration's proposed ergonomics rule went into effect during the Clinton Administration, but was subsequently overturned during the Bush Administration. Now, there is potential for history to repeat itself. Similar to those circumstances, there was a turnover in party control of the White House with a Republican majority in both houses of Congress.
Recently, the Congressional Research Service (CRS) issued a report identifying rules potentially eligible to be overturned under the Act. The CRS takes the position that any regulation submitted to Congress after May 30, 2016, such as the Department of Labor's Paid Sick Leave for Federal Contractors Rule, could be subject to review under the Act by the new Congress and President Trump.
The House has already passed several resolutions of disapproval against rules promulgated during the Obama administration. One resolution targets the Fair Pay and Safe Workspaces rule that would require federal contractors to disclose findings of noncompliance with labor laws. On February 1, the White House issued a statement of administration policy agreeing with actions made pursuant to the CRA. "The Administration strongly supports the actions taken by the House to begin to nullify unnecessary regulations imposed on America's businesses." The statement included specific disapproval of the Fair Pay and Safe Workspaces rule.
The House's recent passing of several joint resolutions of disapproval combined with President Trump's backing signals that employers must stay on the top of future regulatory repeal. Poyner Spruill will continue to monitor legislative developments pursuant to the Congressional Review Act.
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