2016 Small Business Forecast: A Flurry of Federal Regulations

2016 Small Business Forecast: A Flurry of Federal Regulations

The end-of-year rush doesn’t refer only to holiday shopping and party planning.  In Washington, the government is also rushing to meet year-end deadlines.  Many eyes are on Congress to see if budget issues can be worked out to avoid a government shutdown, among other loose ends that need to be wrapped up before Congress adjourns for the year.  Perhaps less noticed is the growing pressure on the executive branch to issue and finalize regulations.  In the remaining days of 2015 and in 2016, the last year of the current Administration’s term, expect to see a slew of federal rules that aim to cement President Obama’s policy legacy.

Regulations can take years to prepare and finalize, so if the Administration wants to get things done before a changing of the guard in 2017, it needs to act fast.   A preview of what’s to come was offered on November 19th with the publication of the 2015 Fall Unified Agenda and Regulatory Plan.  This most recent update of regulatory plans is viewed as more concrete and less aspirational than previous versions given the time crunch.  (For more information on the Unified Agenda, see blog: Small Business Regulatory Watch)

Some of the items on the list:

  • The Department of Labor’s Wage and Hour Division (WHD) plans to publish a final rule revising the Fair Labor Standards Act’s (FLSA’s) overtime exemptions.

  • WHD will also issue a proposed rule to establish the ability of employees of federal contractors to earn seven days of paid sick leave per year.

  • OSHA’s top priority is a final rule to reduce certain diseases by lowering worker exposure to crystalline silica.

  • OSHA is developing a final rule that will require employers’ electronic submission of data related to the recording and reporting of occupational injuries.

  • EPA is developing a proposed rule to address renovation or remodeling activities that create lead-based paint hazards in pre-1978 public buildings and commercial buildings.

  • The General Services Administration (GSA) is reviewing regulations that govern the GSA Schedules program; approximately 17,300 businesses, most of whom are small, have GSA Schedule contracts.

  • An Employee Security Benefits Administration (ESBA) priority is proceeding with a rule clarifying the circumstances under which a person will be considered a “fiduciary” when providing investment advice related to retirement plans, individual retirement accounts, and other employee benefit plans.

Adding to the pressure on the Administration to hurry up, are the potential delays they face amid push back from Congress and stakeholders when their rules are seen as too costly, burdensome, or ineffective in design.  Just last week, Congress tried to stick a monkey wrench in the President’s plans to set limits on carbon emissions.   Both the House and Senate used the Congressional Review Act to pass resolutions that would block EPA rules governing existing power plants and rules for new or modified power plants.  (Of course, the President won’t be signing those bills into law, but congressional opposition does muddle his efforts).

Separately, Members of Congress have introduced bills to thwart the decisions of regulatory agencies (see blog: Big Changes to Joint-Employer Status: Are Business Relationships Threatened?)  And, there are also stakeholders challenging the administration’s rules in court claiming they lack legal authority to regulate among other claims of malfeasance (e.g., net neutrality, Obamacare, immigration reforms).

The regulatory activity of the executive branch is important to watch.  It’s estimated that the rules issued in the last seven years have imposed $700 billion in compliance costs.  Another estimate suggests the cost of those regulations per household is $15,000.  Of course, regulations are promulgated to achieve policy objectives, which are often laudable.   However, given the price, it is critical that agencies seek to achieve their goals in the most cost effective manner.    And, from the legislative point of view, there is also concern that agencies may not regulate according to congressional intent and within the bounds of statutory authority.  On these points, the 2016 debates in Washington could turn the flurry into a storm.