Finance News & Insights

What Trump’s freeze on new regs means for the DOL new OT rule

There are a lot of Finance professionals who’d like the DOL’s new overtime rule to just die already. Well, they just got two pieces of good news from the Trump administration. 

Memorandum issued

First, on January 20, White House Chief of Staff Reince Preibus issued a memorandum to the heads of executive departments and federal agencies instructing them to immediately freeze all pending regulations until they have been reviewed by President Donald Trump’s cabinet appointees.

This kind of action isn’t uncommon for new administrations, but the move by the Trump camp is particularly noteworthy considering all of the controversial regulations it could affect.

The memorandum does three major things:

  • It instructs federal agencies to stop submitting pending regulations for publication in the Federal Register — this includes withdrawing any new regulations that have yet to be published.
  • It directs agencies to take a second look at any regulations that have been finalized/published but have not yet taken effect. Any rules that fall into this category will have their effective dates delayed for 60 days for review.
  • It instructs agencies to consider an additional public notice-and-comment period, which could result in rescinding any pending rules or postponing them beyond the 60-day period.

The memorandum is not good news for the DOL’s overtime rule, which is currently hung up in the court system. The FLSA-amending rule was originally scheduled to take effect Dec. 1, 2016 but was delayed by a federal court injunction. Still, rumblings out of Capitol Hill seem to indicate that the memorandum’s 60-day delay/review process would apply to the rule if the injunction was lifted, even if it occurred 60 days beyond the original effective date.

So that’s one development working against the overtime rule.

DOL asks for extension in court

The other piece of bad news for the rule is the fact that the DOL, now under the direction of the Trump administration, has asked the U.S. Court of Appeals for the Fifth Circuit for a 30-day extension of its time to file a brief in its appeal of the injunction against the rule.

This is a clear sign that there’s been a changing of the guard at the DOL. Back in December, under the direction of then-President Barack Obama, the DOL had requested that the appeals process be expedited. But now that Trump’s in charge, the agency is pumping the brakes.

If the DOL’s motion for an extension is granted — and there’s little reason to think it won’t be — the agency’s next brief in the appeals process won’t be due until March 2.

Bottom line: If granted, the extension would give the Trump administration more than a full month to determine what to do about the rule — and all indications are the administration isn’t a fan of it.

Specifically, the agency asked for the extension to “allow incoming leadership personnel adequate time to consider the issues.”

That doesn’t sound good for the rule.

Stay tuned. We’ll keep you posted.

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