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 continues to advance his agenda in Washington, D.C., with new rules and regulations reshaping existing labor and business standards across the board. It’s always important that businesses stay informed and prepared to navigate new or changing regulations. The Federal Corner is intended to provide details of what is happening in Washington, D.C., that may impact your business. It’s important that if these federal provisions apply or potentially apply that you are aware so you can take advantage or take the proper steps accordingly.
Earlier this month, President Trump signed an executive order, “Democratizing Access to Alternative Assets for 401(k) Investors.” The intent of the order is to begin the process to incorporate private equity, real estate and cryptocurrency into retirement accounts. Trump’s order requires the Department of Labor to examine its guidance within 180 days to make these investments more accessible. While public pension plans have long invested in private assets, other retirement investment accounts have not. The Florida Chamber will provide updates once the Department of Labor issues new guidance.
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 (U.S. Department of Labor Suspended Enforcement)
At the beginning of Summer, the U.S. Department of Labor (DOL) announced that its Wage and Hour Division will not enforce the 2024 independent contractor rule and will instead apply the more business-friendly “longstanding principles” to determine independent contractor classifications, which was the standard under the previous Trump Administration. DOL is in the process of reviewing the old rule, which is also being challenged in federal court, before working toward a simpler standard. This new rule is expected to be released this fall
Last year, the Biden Administration’s DOL independent contractor rule took effect, replacing the approach of the first Trump Administration and reimplementing the Obama Administration’s “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 this rule interfered in the employer-employee relationship and resulted in many more workers being classified as employees as opposed to independent contractors.
For businesses that rely on the independent contractor model, last year’s rule could have increased costs due to the reclassification of some contractors as employees – leading to minimum wage, overtime pay, and additional benefit obligations. The rule could have also led 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 rule, and this litigation is still playing out in court.
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. Several national business groups have called for the adoption of the Nevada standard, which only requires a written plan. A virtual public hearing was held June 16- July 2, and we expect 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 (Interim Final Rule Issued to Narrow Scope)
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 earlier this year that it will not impose penalties or fines on U.S. reporting companies, while issuing an interim final rule that imposes reporting requirements on “foreign reporting companies.” As a result, U.S. small businesses will not face fines or penalties for failing to file their paperwork previously required by the Treasury’s Financial Crimes Enforcement Network. If your business was formed under the law of a foreign country, you can find more information on this rule here.
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 has begun work on a re-proposed “Basel III Endgame” rule. The previous iteration of the rule would have significantly increased 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 have been particularly vulnerable, due to heavier reliance on bank financing to support operations and growth. If this rule had been enacted, the rule could have made financing prohibitively expensive for businesses already facing a challenging economic environment. The Federal Reserve held a conference in late July with regulators, industry executives and analysts, and academics to examine a more balanced approach to bank capital rules.
Occupational Safety and Health Administration Union Walk Around 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 around 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 last year 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 are now 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.