United States: Federal Agencies Scale Back Their Workplace Regulatory Ambitions

During the prior administration, congressional gridlock prevented many significant labor and employment bills from advancing. Federal agencies picked up the slack, issuing several rules to help carry out much of President Obama's workplace agenda. The latest Unified Agenda of Regulatory and Deregulatory Actions, which lists agency regulatory priorities for the foreseeable future, paints a very different picture for employers. The list of current rulemaking for the Department of Labor, for example, has been pared down from the prior year's list, and its omissions are perhaps more telling than its contents.

Regulatory Rollback

Earlier this year, President Trump signed Executive Order (EO) 13771, "Reducing Regulation and Controlling Regulatory Costs," requiring federal agencies to identify for elimination at least two existing regulations for each new regulation they issue. With this directive in mind, the DOL had already targeted several rules for additional review, possible revision, or rescission. These include the Wage and Hour Division's (WHD) white collar overtime regulation, the Employee Benefits Security Administration's (EBSA) "fiduciary" rule, the Occupational Safety and Health Administration's (OSHA) rule setting new limits on occupational exposure to crystalline silica, and the Office of Labor Management Standards' (OLMS) changes to the "advice" exemption of the Labor-Management Reporting and Disclosure Act, otherwise known as the "persuader" rule. Over the past couple of months, the DOL has issued proposed rule rescissions, requests for information (RFI), and/or proposals to delay effective dates of many of these rules while the new administration conducts additional review. With respect to the overtime rule, the WHD plans to soon publish an RFI "to gather information regarding questions of policy and application related to the final rule, which is currently the subject of litigation."

In addition to these rules under renewed consideration, OSHA intends to issue, by October 2017, a proposal to reconsider, revise, or remove provisions of the final rule issued last year to improve tracking of workplace injuries and illnesses.

Notably, the WHD plans to issue a notice of proposed rulemaking next month to rescind the current restrictions on tip pooling by employers that pay tipped employees the full minimum wage directly. According to the unified agenda, the DOL's regulations to implement Section 3(m) of the Fair Labor Standards Act (FLSA) "limit an employer's ability to use an employee's tips regardless of whether the employer takes a tip credit under Section 3(m) or instead pays the full FLSA minimum wage directly to the employee."

The DOL's Employment Training Administration (ETA) plans to issue a proposed rule by May 2018 to implement Executive Order 13801, which calls for the DOL to streamline its apprenticeship standards.

Long-Term Actions and Noticeable Absences

In total, the DOL's regulatory agenda includes 38 items at some point in the regulatory life cycle. In past years, this list has been nearly twice as long. Twenty items have been relegated to the " long-term" regulatory list, likely meaning they are not key priorities and will not be considered over the next year.

Some items on the regulatory back-burner are DOL mainstays. For example, the WHD has not yet axed its proposal to add a musculoskeletal disorders column to OSHA's injury and illness log, although it has taken no steps to craft such a rule, and will not likely do so in the near future.

Also remaining on the long-term list is the DOL's plan to continue its information-gathering regarding the prevention of workplace violence in health care and social assistance facilities. OSHA published an RFI in December 2016 to solicit information from health care employers and workers on violence-related issues. Although no date has been set to move forward with any rulemaking on this issue, OSHA intends to solicit additional information "from stakeholders, including state officials, employers and workers, in the nine states that require certain healthcare facilities to have some type of workplace violence prevention program."

Notably absent from this list is the WHD's plan to consider how an overtime-eligible employee's use of electronic devices outside of regularly-scheduled work hours affects employment. Many had believed that the WHD intended to eventually issue a rule determining whether such use constitutes compensable work time. While its absence from the current and long-term regulatory lists does not mean this plan will never resurface, it is not expected to materialize anytime soon.

In addition, the WHD's "right to know" regulations under the FLSA, which would require employers to disclose to workers their status as an employee or independent contractor and how their pay is computed, no longer appears on the long-term agenda.

The unified agenda is also light on immigration-related reform. This week the ETA published a temporary rule increasing the numerical limitation on H-2B nonimmigrant visas through the end of the fiscal year "to assist certain businesses that are deemed eligible for the newly-authorized H-2B visas."

In addition, the Department of Homeland Security (DHS) intends to issue, by April 2018, a proposed rule to amend the EB-5 Immigrant Investor Regional Center Program. According to the DHS, "[b]ased on decades of experience operating the program, DHS has determined that program changes are needed to better reflect business realities for regional centers and EB-5 immigrant investors, to increase predictability and transparency in the adjudication process for stakeholders, to improve operational efficiency for the agency, and to enhance program integrity."

On the DHS's long-term list is an interim regulation governing petitions filed on behalf of foreign workers subject to the annual numerical limitations applicable to the H-1B nonimmigrant classification. According to the long-term regulatory item, this rule "precludes a petitioner from filing duplicate petitions on behalf of the same alien temporary worker. This rule also makes accommodations for petitioners to create a more efficient filing process for H-1B petitions subject to the annual numerical limitation. Finally, this rule clarifies treatment of incorrect cap exemption claims and removes certain unnecessary regulatory language." No dates for next steps are listed for this rulemaking.

What Now?

The slowed pace of rulemaking does not mean employers will not be subject to additional changes. Employers should pay particular attention to RFIs if they intend to provide input on current rules that might be subject to revision. Overall, however, it appears federal agencies are attempting to stem their rulemaking efforts, giving employers a much-needed break from potentially burdensome requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Michael J. Lotito
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