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 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.
Last week, the U.S. House narrowly passed legislation—dubbed “One big, beautiful bill”—to permanently extend key provisions of the 2017 Tax Cuts and Jobs Act, among other spending priorities. The bill includes a permanent extension of the individual tax rate reduction and increased standard deduction, reintroduces expensing for investments in equipment and domestic research and development, and raises the non-corporate pass-through deduction from 20 to 23 percent. According to the Joint Committee on Taxation, this change is estimated to save small businesses $800 billion over the next decade. The proposal now heads to the U.S. Senate for consideration.
In regulatory news, the Federal Trade Commission has postponed enforcement of the “Click-to-Cancel” rule—which was initially set to take effect on May 14—by two months, moving the date to July 14. This delay coincides with ongoing legal challenges from business groups arguing that the FTC exceeded its authority in issuing such a broad rule. If implemented, the rule would require businesses offering subscriptions or memberships to provide a cancellation process that is as simple as the sign-up process.
On the judicial front, the U.S. Supreme Court is poised to decide on a landmark case that could significantly limit the ability of federal judges to issue nationwide injunctions—a ruling that could carry broad implications. Over the past decade, both Republican and Democratic administrations have relied on such injunctions to either advance or halt policy changes. These injunctions have been issued at the urging of the Florida Chamber and other business organizations for rules like the FTC’s near-total ban on non-compete agreements and the Department of Labor’s overtime rule, which would have significantly increased the salary threshold for exemption from overtime pay. The Federal Corner will continue monitoring this and other developments that may impact your business and employees.
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
U.S. Department of Labor Independent Contractor Rule (In Effect, Trump Administration Announces Update)
Last year, the Department of Labor (DOL) independent contractor rule took effect, 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 final rule interferes in the employer-employee relationship and could result in many more workers being classified as employees as opposed to independent contractors.
The rule 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 may leads to increased compliance costs and liability concerns due to the misclassification of workers.
Multiple business groups filed suit against the DOL’s authority to issue this ruling. Regardless of the outcome of the litigation, it is expected based on past history that the new Trump administration will reverse President Biden’s effort that made it harder for businesses to classify certain workers as independent contractors. As the Trump administration continues to work towards returning to a simpler standard for determining whether a worker is an employee or independent contractor under federal wage and hour rules, the Department of Labor announced on May 1 that it’s Wage and Hour Division will not enforce the 2024 rule and will instead apply the more business-friendly “longstanding principles” in enforcement, which was the standard under the previous Trump Administration.
Occupation 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. A virtual public hearing on the OSHA heat illness rule is scheduled for June 16, which will provide a clearer picture of the fate of the proposal in the coming months. 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 on earlier this year that it will not impose penalties or fines on U.S. reporting companies, effectively suspending the rule. As a result, U.S. 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 and broader business community, the Federal Reserve announced plans to revise and 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. With the change in administration, further adjustments to the proposal could lead to a more balanced framework that better supports local businesses.
While intended to strengthen financial stability, the rule risks tightening credit availability and increasing borrowing costs for small 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 written, it would limit companies’ ability to hire, invest, and grow, ultimately affecting economic growth and employment.
Department of Labor 80/20/30 Tip Rule (Invalidated by Federal Court; Department of Labor Withdrew Proposal)
Earlier this year, the Department of Labor (DOL) formally withdrew their 80/20/30 proposed rule following advocacy from the business community and a decision from the U.S. 5th Circuit Court of Appeals striking down the proposal. The ruling and subsequent withdrawal of the rule makes the issue null and void, granting a win to hospitality employers.
The 80/20/30 rule as previously proposed, amends tip credit provisions for hospitality employers which allows them to pay tipped employees less than federal minimum wage, provided the employee earns enough to make up the difference. Under the rule, employers would’ve lost the ability to claim a tip credit if an employee spends more than 20 percent of their total working hours on non-tipped, direct support tasks—such as rolling silverware, setting and clearing tables, or making coffee. These tasks are considered part of the job but are not directly tipped, and exceeding this 20 percent threshold results in the loss of the tip credit for that time. The 30 percent applies, and an employer loses the tipped credit, when the time a tipped employee performs directly supporting work for a continuous period exceeds 30 minutes – regardless if this work amounts to less than 20 percent of the employee’s total work hours for the week.
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 recently 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.
During the 2025 legislative session, the CHOICE Act passed both the Florida House and Senate and is expected to be signed into law by Governor Ron DeSantis. If signed, the bill will reshape the state’s laws on restrictive covenants beginning July 1, 2025. The legislation provides greater certainty for employers seeking to enforce certain non-compete and garden leave agreements by establishing a presumption that “covered” restrictive covenants are enforceable and do not violate public policy. Learn more about what’s included—and why our partners at Fisher Phillips are saying Florida will soon be the most employer-friendly state in the nation for enforcing non-compete agreements here.
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.