Trump’s First Regulatory Agenda Sheds Light on DOL Rules

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By Ben Penn

The Trump White House’s blueprint for regulatory actions in the next year includes minimal new Labor Department items, either to advance or reverse rules.

The DOL’s Wage and Hour Division plans by August to rescind a 2011 regulation that prohibited certain employer tip-pool arrangements in the service industry, according to the regulatory agenda published July 20. The department’s Employment and Training Administration anticipates a May 2018 release of a proposed rule implementing President Donald Trump’s June executive order to expand apprenticeships by streamlining the registration process.

In addition, the DOL’s Office of Labor-Management Standards unveiled a plan to restore two policies from the prior Republican presidency, both of which boost union disclosure requirements.

Several bigger-ticket items from the Obama administration’s DOL, such as the overtime, fiduciary, and silica regulations, were already placed under review earlier this year. The new agenda did not unveil any more specifics on how and whether the DOL plans to revise or rescind them.

The unified agenda is a semiannual report that lists each agency’s best understanding of where it intends to act in the next 12 months. It’s a preliminary overview that may change, as some actions may be added and others removed. Actions can be notices, proposals, or final rules.

The agenda, released weeks later than usual, marks the White House Office of Management and Budget’s first detailed blueprint on how agencies plan to carry out Trump’s executive order calling for two deregulatory actions for every new regulation issued. The absence of substantial DOL rescissions may stem from the agency’s lack of permanent political leadership during Trump’s first 100 days in office. Labor Secretary Alexander Acosta wasn’t sworn in until April 28.

Prior to the agenda’s release, the WHD had sent a draft request for information to the White House intended to seek public comments on how to revise the overtime rule, which would’ve expand time-and-a-half pay access to an estimated 4.2 million workers. That regulation is tied up in litigation and never took effect.

The agenda does forecast a July 2017 publication of the RFI on overtime, which is expected to lead to a new rulemaking proposal that would make more workers eligible for overtime, although not as many as in Obama’s rule.

Union Disclosures, Drug Testing

The OLMS, which enforces the Labor-Management Reporting and Disclosure Act, was expected to return to traditional GOP priorities involving stricter scrutiny of labor unions. The Trump administration’s regulation schedule lists two proposals that would revive union disclosure rules from the George W. Bush administration. The DOL anticipates both will be issued in March 2018.

First, the OLMS wants to return to a 2003 LMRDA interpretation that subjects union subordinates, or “ intermediate bodies,” to financial reporting requirements. This Bush administration rule, which was reversed in 2010, would hold public sector unions responsible for filing annual spending reports if they were subordinates of national or international unions that were covered by the LMRDA.

Second, the agency wishes to re-establish the “ Form T-1” that required union trusts to file annual spending reports. Union trusts, such as credit unions, strike funds, training funds, and apprenticeship programs, have never been subject to reporting mandates. Under their previous iteration, which was blocked by a legal challenge, the T-1 required unions with total annual receipts of at least $250,000 to disclose the amounts, purposes, and sources of money disbursed and received by trusts in which they wield managerial control or financial dominance.

Tip Pool’s High Court Challenge

Although agencies often do not adhere to anticipated publication dates in the agenda, the August 2017 projection for the tip-pool rollback may face a firmer deadline. The National Restaurant Association asked the U.S. Supreme Court to invalidate the rule, leaving the DOL and Justice Department until Sept. 8 to file a response brief.

A pre-Sept. 8 proposed rule to seek public comments on rescinding the tipping regulation would enable the DOJ to ask the justices not to take the case. Keeping the case out of the high court would prevent a potential ruling that could limit agency rulemaking authority by revising Chevron deference, attorneys told Bloomberg BNA.

Angelo Amador, the NRA’s senior vice president, said he hopes the Supreme Court still takes the case and declares the rule unlawful. A high court ruling to invalidate the regulation would curtail a future administration from reissuing the rule and thwart plaintiffs’ lawsuits alleging tip pools are illegal. The 2011 regulation barred tip sharing between front-of-house employees, such as servers, and back-of-house workers like dishwashers, including when employers pay servers the full minimum wage.

“As long as DOL thinks they have the authority to issue such a rule, we’re going to fight it,” Amador told Bloomberg BNA.

The Labor Department didn’t immediately provide a comment July 20.

Elsewhere at the department, the ETA is scheduled to take another stab at establishing which occupations regularly conduct drug testing, after the Obama administration’s rule on this topic was squashed in a bill signed by Trump this year. It’s unclear if the new proposed rule, estimated for release in March 2018, will be used as a guideline for states to limit jobless benefits eligibility.

OFCCP Silence

The DOL’s Office of Federal Contract Compliance Programs under the Obama administration was known for its aggressive regulatory reform, yet the first Trump agenda doesn’t include a single OFCCP action. The office regularly audits government contractors for workplace affirmative action and nondiscrimination compliance.

While employee advocates praised the OFCCP’s regulatory approach as necessary to combat discrimination, employer-side representatives countered that the agency’s regulations are overly burdensome to contractors.

The agency under the Obama administration finalized controversial data collection and analysis rules pertaining to the outreach, recruitment, and hiring of individuals with disabilities and military veterans.

It also added workplace bias protections based on sexual orientation and gender identity, prohibited pay secrecy policies, and updated sex discrimination guidelines that were more than 40 years old.

Those rules will remain in place under the Trump administration’s latest regulatory agenda.

—With additional reporting by Jay-Anne Casuga

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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