After several years of a Washington stalemate, we anticipate a flurry of legislative and executive activity in early 2017. This activity will seek to right the pendulum that many in the business community thought had swung too far to the left. Many prognosticators believe that US companies will perform better with a looser regulatory yoke, particularly in the area of labor and employment law.
Notwithstanding likely amendments to the Affordable Care Act, areas where the new administration will have an immediate impact concern the activity of the National Labor Relations Board, Occupational Safety and Health Administration, and the Wage and Hour Division of the Department of Labor. A federal district court in Texas recently issued a nationwide injunction blocking the Wage and Hour Division’s rule that would have increased the maximum salary a worker could earn and still be eligible for overtime pay. It was estimated that under this rule overtime eligibility would be extended to 4 million workers. The court held that the de facto salary-only test for overtime eligibility was at odds with the provisions of the Fair Labor Standards Act that also requires a job functions-based assessment. It is unlikely that the Trump administration will pursue an appeal to Court of Appeals for the Fifth Circuit or seek congressional action on this issue.
Moreover, just as we saw the Congressional Review Act used as a vehicle to jettison OSHA’s ergonomics final rule in 2000, the new administration with Republican majorities in both the House and Senate may move to repeal agency final rules submitted in the third and fourth quarters of 2016. OSHA’s controversial new electronic reporting requirements rule, along with its provisions for enhanced employer penalties, will likely be scrapped.
While it will take time for Trump appointees to assume positions on the NLRB, the new administration puts the future of the Board’s new “Persuader Rule,” “Quickie Election Rule,” and joint-employer standard at risk. It will be interesting to see the impact of a more favorable regulatory atmosphere on the bottom lines of US companies.