Virginia, US

Jan 21 2021

Biden Administration Announces Regulatory Freeze and Review

United States

At a glance

  • The White House has requested that all federal agencies pause the regulatory process on any Trump-era rule that has either not yet taken effect or not yet been finalized.
  • For rules and policies that have been formally published, but have not yet taken effect, the White House asks federal agencies to consider postponing the effective date to March 21, 2021 or longer. Agencies are not required to postpone, however.
  • Rules that have been sent for federal review but have not yet been published must be withdrawn and submitted for further consultation.
  • Agencies must not propose or issue a new rule in any manner until a Biden designee reviews and approves it.

The issue

In one of the first executive actions of the President Joseph Biden’s term, the White House has requested a freeze on federal agency regulatory activity so that the new Administration may review Trump Administration agency rules and guidance documents either not yet in effect or not yet finalized. This regulatory freeze is often requested by newly installed Presidents who seek to ensure that rules taking effect during their term reflect their administration’s priorities. 

A closer look

The White House memorandum affects three categories of regulatory actions:

Impact on rules and policies that are published, but not yet effective: The memorandum asks agencies to consider pausing for 60 days (i.e., through March 21, 2021) regulations and policies that have been published or issued but have not yet taken effect, with possible further extensions beyond 60 days. 

During the 60-day review period, agencies are asked to consider opening a 30-day public comment period for feedback on legal, factual, or policy issues raised by rules. If the regulations raise no substantial issues, the rules may proceed. If the regulations raise substantial questions, the agencies are directed to submit the rule for further consultation. Agencies are also asked to consider lengthier delays to rule effective dates in the event that substantial legal, factual, or policy issues are identified.

This category could include a number of recently published immigration regulations and guidance documents, including the recent Department of Homeland Security (DHS) H-1B cap allocation final rule and the Department of Labor (DOL) prevailing wage final rule. (DOL has already withdrawn two recent guidance documents that sought to impose LCA obligations on secondary employers of H-1B employers). It is not yet known whether DHS or DOL will elect to postpone these or other published immigration regulations that are not yet in effect.

Impact on rules not yet published in the Federal Register: Regulations that have been sent to the Office of the Federal Register (OFR) but not yet published are to be withdrawn so that they can be reviewed and approved by an agency head appointed by President Biden or a designee. This is likely to include a recently-announced DHS regulation redefining the H-1B employer-employee relationship and imposing petition requirements on secondary employers of H-1B workers, which was sent to OFR late on January 15 but was not published before the change in presidential administrations on January 20.

Impact on new regulations: The memorandum directs federal agencies not to propose or issue any new regulation or policy until an agency head appointed by President Biden has reviewed and approved it. This category would cover rules listed in an agency’s regulatory agenda but not yet issued in proposed or final form.

Exceptions to the regulatory freeze are available for emergency situations or other urgent circumstances as determined by the Director of the Office of Management and Budget.

What the regulatory freeze means for employers and foreign nationals

If federal agencies comply with the White House request for a regulatory freeze on published rules, Trump Administration immigration regulations that are not yet in effect or finalized could be delayed by a minimum of 60 days. The rules could still take effect in either their current or a revised form at a later time. Rules not yet published or submitted for consideration in the regulatory process will not be published unless they reflect Biden administration priorities. Regulations and policies that are currently enjoined by a court will remain so until there is further action in the judicial system.

A number of late-stage Trump-era regulations seek to alter aspects of the H-1B process, including the method of allocating the annual H-1B quota. It is not yet clear whether the Biden Administration will postpone these regulations beyond the Fiscal Year 2022 cap season, which will begin in the coming months. Fragomen is closely tracking regulatory developments affecting the H-1B cap and will provide updates as developments occur.

This alert is for informational purposes only. If you have any questions, please contact the immigration professional with whom you work at Fragomen.