DOL delays regs, withdraws guidance issued during Trump administration's final days

During the past several presidential transitions, it has become a trend for the incoming administration to repeal or delay many regulations and guidance documents issued in the waning days of the previous administration. The switch from the Trump administration to the Biden administration shows the trend has continued and likely will do so for the foreseeable future.

Compensating tipped employees

One example of the trend is the final rule affecting compensation for tipped employees, which the U.S. Department of Labor (DOL) adopted during the Trump administration's final days (see "New DOL regs provide clarity for compensating tipped employees" in our March 2021 issue).

As noted in the earlier article, the DOL sought, among other things, to repeal what has become known as the "20% rule" and instead adopt a more workable solution for employers with tipped employees. The rule was scheduled to go into effect on March 1, 2021.

Applying independent contractor test

Another new rule, scheduled to take effect on March 8, would have provided significant clarity to employers applying the economic realities test to evaluate whether a worker is (1) an employee entitled to overtime pay or (2) an independent contractor who isn't protected by the Fair Labor Standards Act's (FLSA) overtime requirements.

After issuing the regulation, the DOL provided an opinion letter offering significant clarity on the rule's applicability to owner-operators in the motor carrier industry.

Both rules' effective dates delayed