EEO-1 Pay Reporting, Overtime Rule May Be Repealed Following Trump Order

Under presidential directive, how will federal agencies repeal two old rules for each new one?

By Allen Smith, J.D. Mar 20, 2017
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Federal task forces charged with implementing President Donald Trump's executive orders to reduce rules and regulations will likely target those disfavored by the business community, said Lynne Anne Anderson, an attorney at Drinker Biddle & Reath in Florham Park, N.J.

These rules include the EEO-1 pay data reporting requirement, the overtime rule, Department of Labor (DOL) administrative interpretations, and Occupational Safety and Health Administration (OSHA) regulations.

However, actually repealing the regulations will prove more difficult than making a list of potential rules to scrap. Once rules are in place, experts say, it is very difficult to remove them.

Executive Orders

Over the past several weeks, Trump has signed executive orders directing federal agencies to repeal two federal regulations for every new rule they issue and requiring each agency head to designate a regulatory reform officer.

Task forces in each agency must recommend regulations that should be repealed, replaced or modified. They will focus on regulations that:

  • Reduce or eliminate job opportunities.
  • Are outdated or ineffective.
  • Impose more costs than benefits.
  • Interfere with reform initiatives and policies.
  • Rely on data or methods that are not sufficiently transparent to the public.
  • Relate to rescinded or modified executive orders or presidential directives.

The task forces' first reports are due to agency heads on May 25.

EEO-1 Pay Reporting Requirement

If the executive orders apply to the Equal Employment Opportunity Commission (EEOC), the revised EEO-1 form that requires employers to collect and report pay data to the EEOC by March 2018 may be identified for repeal, Anderson said. It is unclear whether the executive orders apply to independent agencies, such as the EEOC, she explained.

Employers have been critical of the new reporting obligations for many reasons, she said. The new form does not provide any context for explaining nondiscriminatory reasons for pay disparities among the broad job categories used on the form, she added. Since the EEOC has not fully explained how the information would be used, employers are concerned that the data could be easily misconstrued.

However, repeal of the revised EEO-1 form would require a majority vote of the EEOC commissioners, Anderson noted. The five-member EEOC currently has only four commissioners. While the Acting Chair Victoria Lipnic is a Republican and voted against the new EEO-1 form, the other three commissioners are Democrats. Former Chair Jenny Yang will step down when her term expires in July, and Trump will ultimately be able to appoint two Republican commissioners.

"But until then, it is unlikely that the current commissioners will act on recommendations to repeal and replace the recently finalized new EEO-1 form," Anderson said.

The EEOC has also listed equal pay as an enforcement priority in its current strategic enforcement plan. Rather than repealing the pay data reporting requirement, it instead may be modified, she noted.

Overtime Rule

Getting rid of the overtime rule may be as simple as letting it die in the courts, if the DOL decides to not challenge a preliminary bar on the rule's issuance and if no other party, such as the AFL-CIO, is permitted to challenge the injunction.

The DOL may identify the overtime rule as ripe for repeal, although Secretary of Labor nominee Alexander Acosta's stand on the overtime rule at this point remains unclear, according to a press release from Sen. Elizabeth Warren, D-Mass. Removing a regulation usually requires an agency to go through the same steps that are needed to create a rule—namely, a notice-and-comment period, said Brett Coburn, an attorney with Alston & Bird in Atlanta.

"Instead of repealing the final overtime rule published in May 2016, my suggestion would be for DOL to issue a new notice of proposed rulemaking that ultimately would result in a new, more reasonable salary-level test and would eliminate the automatic three-year salary adjustment provision," said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., and former acting administrator of the Wage and Hour Division.

"There should be no shortage of regulations for DOL to repeal or replace," he added, noting that "we in fact went through a similar process, perhaps not quite as rigorous, during the George W. Bush administration under Secretary [Elaine] Chao's leadership. Thus, there are lists [of regulations ripe for repeal] already that need to be updated and acted upon."

DOL Administrative Interpretations

The broad definition of "regulations" Trump used in the executive orders could apply to DOL administrator's interpretations (AI) used to justify enforcement actions.

If so, two AIs issued by the DOL's Wage and Hour Division may be identified for withdrawal, Anderson noted. In July 2015, the division issued an AI on the classification of independent contractors, warning that most of these workers qualify as employees. Then, in January 2016, the DOL issued further guidance that expanded the scope of joint-employer liability for wage and hour claims by workers supplied by staffing agencies, and for migrant and seasonal agricultural workers. "Both of these actions have been widely criticized by the business community," she said.

OSHA Regulations

Repealing OSHA regulations in their entirety may be even more challenging.

"It is going to be difficult to repeal or modify a complete standard given the reason for the standard in the first place," said Eric Conn, an attorney with Conn Maciel Carey in Washington, D.C. "Carcinogens cause cancer. Falls from ladders cause injuries."

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He added, "In other words, there must be some justification that there is no longer a safety or health hazard associated with the standard before repeal will be politically and legally feasible. I think it would be easier to identify provisions within standards for repeal."

"OSHA regulations that might be candidates for withdrawal are regulations that give the agency more authority to issue citations against employers and threaten jobs," said David Michael, an attorney with Gould & Ratner in Chicago. "For example, the rule that would extend the agency's authority to issue citations for record-keeping violations from six months to five years is a candidate for withdrawal." But the president may sign legislation to nullify the regulation before OSHA does. The House of Representatives has passed a resolution to block the rule, and the resolution has moved to the Senate.

"Once regulations are in place, they are not easy to just do away with," said Frederick Warren, an attorney with FordHarrison in Atlanta. "Regarding OSHA, there is a new rule that requires employers to submit their injury and illness logs [electronically] to OSHA, which might start posting them on its website as early as July 1, 2017. It is under legal challenge. Another OSHA rule that might be a target is one that went into effect Dec. 1, 2016 restricting the use of post-accident drug testing except in situations where employee drug use is likely to have contributed to the accident." He noted that this regulation also is being challenged in federal court.

Difficulty with Two-for-One Requirement

"I think agencies will have difficulty complying with the earlier two-for-one executive order," he added.

Michael Lotito, an attorney with Littler and co-chair of the Workplace Policy Institute (the firm's government relations branch), agreed, saying, "I have no idea how the departments or agencies will apply the two-for-one [requirement]. For example, the NLRB [National Labor Relations Board] has only two rules, one on union elections and one on health care bargaining units. "Should the election rule be replaced along with the healthcare bargaining unit?" He asked. "Or only one? Which one? Neither? In that case, has the executive order been ignored?  

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