Department of Labor Rolls Back Obama-Era Regulations & Orders

As employers in South Carolina, it is imperative to stay current on all federal and state laws. Federal laws can change quickly with the issuance of executive orders and rulings from federal courts. Former President Obama issued many executive orders that affected existing rules and regulations or enacted new rules and regulations to be enforced by the US Department of Labor. However, since President Trump appointed R. Alexander Acosta as the Secretary of Labor in April, the Department of Labor has rolled back or paused many Obama-era regulations and orders. Below is a summary of where many of these regulations stand.

Overtime Exemption Regulations

Obama-era regulations doubled the weekly salary requirement for most white-collar overtime exemptions from $455 to $913, making more employees eligible for overtime pay. In November 2016, a federal district court issued a nationwide preliminary injunction to stop the regulation from taking effect on December 1, 2016, as planned. The Department of Labor originally filed an appeal of the lower court’s order that blocked the regulation from taking effect, but the Department has since dropped the appeal and sought comment from stakeholders on possible changes to the regulations. The period for comments closed September 25, 2017. In August 2017, the federal district court that issued the injunction issued a final ruling that the Department’s new rule exceeded the Department’s authority. The Department has appealed that ruling, but asked the Court of Appeals to pause proceedings on the appeal until the Department has a chance to review comments from stakeholders.

Joint Employer and Independent Contractor Interpretations

In June 2017, the Department of Labor announced it was withdrawing interpretations on joint employment and independent contractors that it issued in 2015 and 2016. The DOL under Obama expanded interpretations of joint employer and employment status in independent contractor situations.

Persuader Rule

Also in June 2017, the Department issued notice that it was rescinding and revising the Persuader Rule. The Persuader Rule requires employers and labor relations consultants, including employers, advisers, and lawyers, to report agreements where a consultant would participate in activities with a directly or an indirectly are aimed to persuade workers about their rights to collectively bargain. Obama’s rule greatly expanded reporting and disclosure requirements but was enjoined in November 2016 by a federal court judge. The Trump administration is taking formal action to rescind the new rule, and sought comment on its proposal through August 11, 2017. In the meantime, the Department’s position is that it will enforce the rule as it existed prior to the Obama-era changes.

Reports to OSHA Delayed

Department of Labor regulations issued in May 2016 would have required electronic reporting of injuries and illnesses to OSHA beginning July 1, 2017. The Department intended to post data publicly of injuries and illnesses for workplaces with more than 19 employees and for employers in high-risk industries. In June 2017, OSHA, an agency of the Department of Labor, indicated it would revisit this rule, which many employers found controversial, and postponed the reporting requirement to December 15, 2017. Employers in states with state-based occupational and safety enforcement, including South Carolina, are not covered by this requirement. Other provisions of the regulation are under review, and OSHA expects to issue a notice of proposed rule making in 2018 to reconsider, revise, or remove portions of the regulation.

Opinion Letters

The Department of Labor under Obama’s administration did not issue opinion letters under the Fair Labor Standards Act, or the Family And Medical Leave Act, after 2010. In June 2017, the DOL under Trump’s administration indicated it would begin issuing these letters again to give guidance to employers and employees on those laws.

Fiduciary Rule

The Fiduciary Rule was a regulation set to take effect in April 2017. The rule would require a financial adviser to put the best interests of the client ahead of his or her own interests. The Department of Labor established the fiduciary rule to protect “main street retirement,” or retirement accounts for those who may not be eligible for larger organizations’ retirement options or pensions. While President Trump signed an executive order requiring an investigation and analysis of the effects of the Fiduciary Rule, Wall Street firms were already in the process of making the necessary changes to comply with the new rule. Thus, even if the Trump-ordered investigation into the Fiduciary Rule determines the rule harms or is likely to harm investors; disrupts the retirement advice industry; or, is likely to cause an increase in litigation, many large investment firms may already be following the rule and any rescission by the Secretary of Labor may be moot. Full implementation of the Fiduciary Rule has been pushed back to July 1, 2019.

Other Policies and Regulations Subject to Change

While the above rules are currently under revision or have been revised already by the Trump administration, there are other policies that have not yet been changed and are worth keeping a watchful eye on.

Legal Workers

The federal government currently does not require employers to use E-Verify to confirm that employees are legally permitted to work in the country. This may change, as the administration’s 2018 budget included funds for implementing a mandatory program. Employers are currently required to complete and have on file I-9 forms for all employees. Audits of these forms are a source of revenue for the federal government – employers can be fined between $250 and $2000 for each employee who is unauthorized to work. Employers should ensure their process for verifying employment eligibility meets all current laws and that employee files are maintained in accordance with audit requirements in the event an audit occurs.

Family Benefits

The Family and Medical Leave Act requires 12 weeks of unpaid leave for companies that have over 50 employees working within a 75-mile radius. This blog has reviewed when leave must be offered to employees. However, employers may be subject to any new rules governing leave that are enacted by Congress, or regulations issued by the Trump administration. Ivanka Trump, the president’s daughter and an advisor, has advocated for paid maternity or paternity leave, but no changes have been proposed to date.

Stay Apprised

Knowing about changes to policies and regulations affecting an industry or business helps the business to continue to follow the law, and also ensures the business does not engage in costly compliance activity for policies or regulations that no longer exist. Contact an experienced employment lawyers at Gignilliat, Savitz, & Bettis, LLP for a review of your industry and business and the employment and labor management relations, regulations, and policies affecting it.