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As the U.S. Senate continues to exercise its 'advice and consent' authority in considering his cabinet nominees, President Donald J. Trump continues to exercise his executive authority to advance his priorities. In the past week, Trump had issued executive orders focused on reducing regulations, curtailing immigration and revisiting controversial regulations issued during the Obama administration.
Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs
On January 30, President Donald J. Trump issued an executive order (EO), referred to as the "2 for 1 rule," which requires federal agencies seeking to issue a new regulation to identify two prior regulations for elimination. The White House subsequently issued guidance on the EO providing that it applies only to regulations that are designated as significant as defined under EO 12866 (issued in 1993) and other clarifications. The order also addresses the costs of regulations, requiring that for fiscal year 2017, total costs of new regulations and their offsets be "no greater than zero." The order exempts regulations affecting the military, national security, foreign affairs, or those related to agency management and personnel or those exempted by the Director of Office of Management and Budget. In future years, in order to keep costs within budgeted limits, agencies pursuing new regulations must offset those costs by identifying regulations to eliminate. The President, in signing the order, identified it as providing regulatory relief to U.S. business and especially small business.
Constitutionality of the "Protecting the Nation from Foreign Terrorist Entry into the United States" EO Challenged in Court
On February 9, a three-judge panel of the 9th Circuit Court of Appeals upheld the nationwide temporary restraining order halting enforcement of President Trump's EO limiting entry into the United States. That executive order, issued January 27, suspended issuance of visas to nationals of seven named countries for at least 90 days (Iraq, Iran, Libya, Somalia, Sudan, Syria, Yemen), causing uncertainty for foreign travelers, U.S. employers and many universities with international students and faculty.
The order, sometimes referred to as the "extreme vetting" order, also includes provisions requiring the agencies to implement uniform screening standards to identify those entering the U.S. on a fraudulent basis or evidencing an intent or risk of harm. A report on progress is due to the president in 60 days. Other key provisions include a pause on the U.S. refugee program, expedited completion of the biometric entry-exit tracking system and suspension of the visa interview waiver program.
In reaction to the EO, many employers are communicating with affected employees about the seven-country travel ban. Employers are also seeking greater clarity of the potential changes to the immigrant screening standards and the visa interview waiver program, which could increase wait times for nonimmigrant employees seeking a visa renewal to return to the US. The Trump Administration is considering whether to appeal the 9th Circuit decision to the Supreme Court where, pending the confirmation of a ninth justice, a 4-4 deadlock decision is possible.
SHRM's affiliate the Council for Global Immigration has created resources for HR and in-house immigration professionals explaining the recent immigration-related executive actions and their potential impact on the workplace. Additional EOs are believed to be under consideration by the Trump administration, including one addressing a wide-range of work visa programs (including the H-1B program) and immigration-related work issues.
Fiduciary and Pay Ratio Rules
On February 8, a third federal district court ruled in favor of the investment advice fiduciary rule in response to litigation challenging its legality. Although the rule is faring well in court challenges, President Trump has issued an executive memorandum requiring the Department of Labor (DOL) to scrutinize the rule and its potential effects. The rule was a controversial priority of the Obama administration that would require financial advisers and brokers who provide advice for retirement accounts to act as fiduciaries. Originally scheduled to become effective on April 10, DOL has forwarded to the Office of Management and Budget a proposal to postpone the effective date of the rule.
SHRM did not oppose the rule but offered suggested improvements in comments to the agency. The president's memorandum requires that DOL examine the rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice, as well as whether it results in disruption to the retirement industry and whether it is likely to cause an increase in litigation. If such negative results are found, the agency is directed to "publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law."
Another controversial Obama-era rule requires that publicly-traded companies disclose the ratio of the median of the annual total compensation of all employees to the annual total compensation of the CEO, also known as the "pay ratio." SHRM's comments to the agency expressed concerns about the complexity of the rule's implementation. In response to difficulties reported by companies attempting to comply with the rule, which is in effect for fiscal years beginning on or after January 1, 2017, the Acting Chairman of the Securities and Exchange Commission (SEC) issued a statement seeking input on compliance challenges. The Commission has created an online form to collect input that will guide the Commission's implementation and potential additional guidance or other relief.
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