Deregulation Coming from Labor Department


Deregulation is a topline goal of the current administration. Leading the pack in terms of costs savings from reducing red tape is the Department of Labor, according to recent report from the American Action Forum, with $417.2 million.

Recent remarks from the Secretary of Labor signal more deregulation is coming. At an event hosted by U.S. Chamber of Commerce, Alexander Acosta said “When you look forward into the upcoming year, you’re going to see, I believe, a lot more deregulation, in addition to some great proactive policies.”

During the Obama administration, there was an explosion of workplace rules and mandates. At the DOL alone, the agency imposed $55.7 billion in total finalized regulatory costs and added nearly $70 million in paperwork burden hours.

Going forward, it is essential to reduce regulatory burdens. Complying with the elaborate maze of red tape takes employers away from their core-business functions and diminishes productivity. Burdens from regulation are particularly burdensome on small business. As Investors Business Daily noted, “A National Small Business Association survey found that small business owners spend more than 80 hours a year just dealing with regulations. In the first year alone, a small business will spend on average roughly $83,000 to comply with government rules. That can be the margin between staying open or going bankrupt.”

Simplifying existing and statutorily required rules is potentially as important as deregulation itself. In this area, the DOL has an opportunity to issue regulations that are less burdensome than the previous administration imposed on the economy.

For instance, the DOL is in the midst of issuing a proposed rule on overtime requirements. During the Obama administration, a rule was finalized that raised the salary threshold for overtime-eligible employees 100 percent, an increase from $23,660 to $47,892. Such an increase is unprecedented and contrary to congressional intent. As such, a federal court struck down the rule. Now, the DOL has the opportunity to craft a sensible overtime rule that does not impose enormous costs on the economy, harm job creation or limit career advancement.

The DOL is off to a good start, but it is important for the agency to publish fewer new, unnecessary regulations as well as withdraw overly costly red tape and simplify existing rules. As also mentioned at Secretary Acosta’s event, the administration’s new regulatory agenda is set to be released in a couple of weeks. This will give the public a good idea whether the DOL is committed to a deregulatory agenda.