It has been noted politicians campaign in poetry and govern in prose. That may sound too lofty to describe current times, but the sentiment remains: promises made on the campaign trail do not easily translate into law. We have a Republican President and a Republican Congress, which historically has meant a more business-friendly regulatory environment. Yet as the first 100 days will show, unwinding is neither quick nor easy. The Affordable Care Act has not been repealed and little is on the horizon. The President’s Budget Blueprint for 2018 proposes to slash the Department of Labor’s (DOL) budget by 21%. What does this mean for employers right now, or even over the next year?
In short, not a lot. Meanwhile, state and local governments are legislating like mad to fill the gaps that could be created by proposed budget cuts and executive orders. President Trump is an active Twitter user but as detailed below, that communication belies the actual activity of the federal government. #Realtalk
Are employers off the hook for federal mandates? Not so fast. Most of the federal regulations that govern the workplace remain in place and, given the inability to repeal the much lamented ACA, may not change at all.
Below is a quick overview of the current federal landscape under President Trump. Without actual policy as a guide, we are using the President’s proposed budget as a crystal ball. Please note that many states, including Massachusetts and California, have stricter mandates than the federal laws:
THE FUTURE OF DOL/OSHA/EEOC ENFORCEMENT
The President has proposed $2.5 Billion in cuts to the U.S. Department of Labor’s (“DOL”) operating budget. Because Congress has to approve the budget this is only an outline of the actual budget. The blue print is short on details, but does expressly call for reduced funding for grant programs, job training programs for seniors and disadvantaged youth, and support for international labor efforts. It also proposes to eliminate the U.S. Chemical Safety and Hazard Investigation Board (“CSB”) – an independent, federal, non-enforcement agency that investigates chemical accidents at certain facilities. These cuts account for $500 million dollars of the DOL budget. The blueprint does not specify where the other $2 billion in cost savings will come from, except to say more funding responsibility will go to the states. If approved by Congress—a big if–the cuts will involve a loss of funds that could be distributed heavily through DOL’s enforcement programs. This will include the EEOC and OSHA. Yet the process by which these agencies collect fines is a valuable revenue generator and unlikely to end easily.
At this point, the likelihood of the final budget looking like the proposed one is total conjecture. Furthermore, even with the expected cuts to the DOL’s enforcement and regulatory programs, it is important to recall that under the last Republican administration—no fan of regulation– the DOL still enforced the law. Moreover, as the federal government delivers more labor enforcement responsibility to the states, employers will increasingly be forced to work to achieve compliance on two fronts, instead of one.
Every administration has used the media as a means of furthering and communicating its chosen agenda, and the Trump administration is no exception. The choices the administration makes in what it chooses to publicize likely signal the administration’s direction; but also shape the public’s perception of what it is actively doing. The Trump administration and President Trump in particular use social media and news reports for the purpose of shaping the public’s understanding their activity. From a compliance standpoint, this actually creates risk for employers.
Despite the President’s proposed budget and awaited confirmation of a new Labor secretary, the New York Times reported that DOL enforcement actions continue. In a departure from past practice, the department has stopped publicizing fines against companies. As the New York Times points out, the Obama administration used the announcements as an enforcement tool, and a means to influence employers. However, the announcements also served as an important window for employers into the DOL’s current position on important compliance issues such as wage and hour or OSHA safety enforcement. If a company in the same industry was recently fined for a practice, that action provided others in the industry with important notice to examine their practice. Employers no longer have this benefit. Furthermore, those who believe that the lack of information surrounding DOL enforcement means they no longer have to worry about the threat of an audit do so at their own peril. At the present, and until the new budget is confirmed months from now, agency enforcement has not changed. For those inclined to believe the confirmation of the new Labor secretary will change that should keep in mind that DOL audits are a money-maker for the agency. There seems to be little reason for them to stop.
WHAT TO DO
The last few years have seen a seismic change in the number of employment laws on both the state and federal level. If it has been a few years since your organization has updated its employee handbook, you have a compliance problem on your hands. Updating your handbook and policies is an important step to mitigate risk.
And remember, statutes, regulatory guidance and case opinions published by the courts are what impact compliance obligations, not the news. What happens on Twitter does not reflect the actions of the agencies of the federal government. #Really