Federal Corner
The Federal Corner is an initiative of the Florida Chamber under the Small Business Council and the Litigation & Regulatory Reform Center that tracks and engages in federal rules out of Washington, D.C., that may be problematic for Florida businesses.
The Trump administration marks a significant shift in Washington, D.C., especially as it relates to executive actions affecting Florida employers, with new rules and regulations reshaping existing standards, reflecting the administration’s change in policy direction. While regulatory changes are expected with any transition of power, businesses must stay informed and prepared to navigate the evolving landscape. The Florida Chamber will keep you up to speed on all that is happening as you continue to run your business day-to-day. The foundation of the Federal Corner is to provide a one-stop shop to keep you apprised of all that is happening in Washington, D.C., that may impact your business. It is essential that if these federal provisions apply or potentially apply that you are aware and able to take the proper steps accordingly.
This month, Chief Justice John Roberts, who is assigned to the D.C. Circuit Court of Appeals, ruled that Trump’s unprecedented termination of Democrat National Labor Relations Board (NLRB) member Gwynne Wilcox will stand for now. The Supreme Court will decide the matter in the next couple of weeks, but the NLRB, for now, remains in limbo as they do not have a quorum. The first few months of the Trump administration have seen significant shifts in federal agency policy, including increased tariffs on foreign nations, new direction at key federal employment related agencies, and many executive orders outlining the shifting priorities of the Trump administration.
Stay apprised of recent court rulings and developments in Washington, D.C., that could impact your business by reading the Federal Corner. If you would like to engage in our federal legislative or regulatory advocacy efforts, please contact Florida Chamber Vice President of Government Affairs, Carolyn Johnson, at cjohnson@flchamber.com.
Occupational Safety and Health Administration Heat Rule (Pending; Florida Chamber Submitted Comments)
In response to the Occupational Safety and Health Administration (OSHA) proposed rule on heat illness and injury in the workplace, the Florida Chamber of Commerce and Florida Chamber Leadership Cabinet submitted formal comments on behalf of Florida businesses. The major concerns include an estimated $10 billion in increased compliance costs annually, the unintended consequences of a blanket one-size-fits-all approach as opposed to site-specific, business-led solutions, and the outsized impact on Florida’s key economic sectors.
With the change in administration, it is expected that OSHA’s proposed heat safety rule may be scaled back or delayed. Regardless of outcome, the Florida Chamber Safety Council will continue to lead on heat safety in the workplace, providing free resources to businesses found on the heat stress prevention platform.
U.S. Treasury Beneficial Ownership Information Reporting Rule (U.S. Treasury Suspending Enforcement)
Following a series of conflicting court rulings on the legality of the Corporate Transparency Act’s (CTA) beneficial ownership reporting requirements, the U.S. Treasury Department announced recently that it will not impose penalties or fines on U.S. reporting companies, effectively suspending the rule. As a result, small businesses will not face fines or penalties for failing to file their paperwork by the extended deadline of March 21, 2025, previously set by the Treasury’s Financial Crimes Enforcement Network.
Under FinCEN’s proposed rule, local businesses and their beneficial owners – the individuals who own or control the company – would have been required to report ownership and company specific information to the U.S. Treasury. The proposed rule aimed to fight against illegal financial activities like money laundering and terrorist financing but came with increased reporting and compliance costs for businesses.
The department has stated it plans to issue a new notice of proposed rulemaking that will significantly narrow the rule’s scope.
Basel III Endgame Rule (Federal Reserve in Process of Making Changes, Re-Proposing)
Following advocacy from the Florida Chamber, the Federal Reserve announced plans to re-propose their “Basel III Endgame” rule, which would significantly increase capital requirements for U.S. banks, driving up the cost of capital and credit for businesses of all sizes. Small and mid-size businesses, which are vital to Florida’s economic growth, would be particularly vulnerable, due to heavier reliance on bank financing to support operations and growth. If enacted, this rule could make financing prohibitively expensive for businesses already facing a challenging economic environment. Further adjustments to the proposal will lead to a more balanced framework that better supports local businesses.
Smaller, privately held companies, which represent the vast majority of U.S. businesses, could be hit hardest by higher risk weights on loans. Were this rule to be finalized as previously written, it would limit companies’ ability to hire, invest, and grow, ultimately affecting economic growth and employment.
Federal Trade Commission Non-Compete Rule (Invalidated by Federal Court and Under Appeal; Florida Chamber Submitted Comments)
Following advocacy from the Florida Chamber and broader business community, a federal judge in Texas struck down the Federal Trade Commission (FTC) proposed rule that would broadly ban non-compete clauses in employment contracts. Prior to the period for public comment closing, the Florida Chamber submitted formal comments opposing the rule. The Florida Chamber believes the rule as proposed is a drastic overreach of the federal government, negatively impacts Florida businesses, and is likely unconstitutional. The judge agreed in striking down the rule citing concerns over the FTC’s lack of statutory authority to issue substantive rules regulating unfair methods of competition. Citing different conclusions, a Florida judge also prevented the FTC from enforcing the ban based on the “major questions” doctrine, stating that the FTC had to show it had “clear congressional authorization” to issue the ban since the rule was of “extraordinary” economic and political significance. The FTC has appealed both the Texas and Florida decisions to the 5th and 11th Circuit Court of Appeals, respectively.
The Federal Trade Commission announced its intent to continue scrutinizing non-compete agreements it deems unfair to workers. Newly appointed FTC Chairman Andrew Ferguson outlined plans for a Joint Labor Task Force to identify practices the agency considers deceptive, unfair, or anti-competitive. The fate of the rule remains uncertain, and we will continue to monitor developments closely as the federal debate over non-competes is far from over.
U.S. Department of Labor Independent Contractor Rule (In Effect)
The Department of Labor (DOL) independent contractor rule took effect last year, which replaces the “core factors” approach of the first Trump Administration and reimplements the Obama Administration “totality of the circumstances” test, meaning that no single factor determines the worker’s status, and all aspects of the work relationship may be considered. The Florida Chamber believes the rule interferes in the employer-employee relationship and results in many more workers being classified as employees as opposed to independent contractors.
The rule as currently enacted has significant implications on businesses that rely on the independent contractor model, increasing costs due to the reclassification of some contractors as employees – leading to minimum wage, overtime pay, and additional benefit obligations. The rule leads to increased compliance costs and liability concerns due to the misclassification of workers.
Multiple business groups filed suit against the rule and it is expected based on past history, the Trump administration will reverse President Biden’s effort that made it harder for businesses to classify certain workers as independent contractors.
Occupational Safety and Health Administration Union Walkthrough Rule (In Effect, Pending Ongoing Litigation)
The Occupational Safety and Health Administration (OSHA) rule allowing workers to select a union representative to accompany OSHA inspectors walking through employers’ workplaces – regardless of whether the workplace is unionized or the representative selected by the workers is an employee of the business being inspected – took effect on May 31, 2024. The rule changes the previous requirement that the representative accompanying the OSHA inspector must be an employee and could present significant challenges for employers.
The final rule is likely to increase union participation in the inspection process and could potentially be problematic as representatives with unknown motives will now be allowed to participate in inspections of employers’ property. The rule also means sensitive information could potentially be shared with union representatives, even in non-union workplaces, which could lead to increased union participation. There have also been concerns raised that representatives may be more focused on finding violations rather than working collaboratively to improve safety.
A coalition of business leaders have filed a lawsuit challenging the OSHA rule. The Trump administration may review this rule and could potentially overturn the rule in the coming years.