You are here

Trump Can Gut Obama-Era Labor Regs Because They Were Never Meant to Last

Citations

Reason covers the Secretary of Labor Acosta's decision to eliminate independent contractor rules.

Eliminating a set of Obama administration rules for independent contractors and businesses that operate as franchises took U.S. Labor Secretary Alexander Acosta only three sentences.

That's because those rules were passed in a way that practically invited their disposal by any future Republican administration.

Business groups welcomed the change. The Obama-era rules were potentially devastating for some small businesses and entrepreneuers and left bigger businesses on the hook for greater liability in future labor law disputes.

The change also serves as another sign the Trump administration is interested in rolling back rules that largely for political reasons to appease unions unnecessarily locked workers into less flexible employment relationships.

In a broader sense, last week's repeal of the so-called "independent contractor and joint employer rules" is a good example of why organizing an economy by executive fiat creates problematic uncertainty for employers and workers.

During the Obama administration, there was significant growth in what some observers call "regulatory dark matter." The phrase itself was coined—to my knowledge, at least—by Clyde Wayne Crews, a vice president at the Competitive Enterprise Institute and probably the most knowledgeable person in the country when it comes to the actual size and scope of the federal regulatory state. These pieces of "dark matter" are rules that, like their cosmic namesakes, can't really be seen or measured. They don't really exist, at least not in the traditional sense, but we can still see the effect that they have.

"Guidance documents," Crews' CEI colleague Ryan Young wrote in 2015, are an "increasingly popular form of dark matter." They are the result of regulations that are unclear, which might create a legal question about how they should be applied. When a court raises that question, the regulatory agency can responds with a "guidance" explaining to the judge how he or she should proceed. Judges can't be experts in all the technical details of government regulations, so they will often defer to the guidance provided by the very regulatory bodies whose rules are subject to a legal challenge.

"Agencies know this," Young points out, "and will take advantage of it to sneak through regulatory requirements without having to put them before the public."

Read the full article at Reason.