Deregulation Debate: Business Groups vs. Labor on Workplace Rules

Why It Matters

The House Subcommittee on Workforce Protections heard pitched arguments on September 2 over whether the Trump administration's push to gut workplace rules unleashes opportunity or endangers workers. The U.S. Department of Labor is aiming to rewrite or repeal more than 60 workplace regulations adopted under previous presidential administrations.

Republicans framed the hearing as a chance to modernize 90-year-old labor laws for today's economy. Democrats fired back with warnings that the administration is dismantling protections written in blood after worker deaths.

The hearing pitted business-friendly witnesses against labor advocates in a debate that foreshadows legislative battles over how far the administration can go in rolling back workplace safeguards.

The Big Picture

The Trump administration has made deregulation a centerpiece of its second-term agenda. According to Fox Business, the White House's 2026 Regulatory Plan targets 702 federal rules and projects $1.5 trillion in cost savings, a figure dwarfing the prior year's record of $211.8 billion. The Department of Labor alone aims to rewrite or repeal more than 60 workplace regulations adopted under previous administrations.

The administration targets minimum wage requirements for home health care workers and people with disabilities, and farmworker retaliation safeguards. The administration also proposes narrowing the scope of OSHA's general duty clause by excluding inherently risky job activities, citing professional sports as an example.

In February 2026, the Trump administration moved to scrap a rule making it harder to classify workers as independent contractors. The Department of Labor's Wage and Hour Division set October 2026 as the target for a final rule rescinding the Biden administration's independent contractor regulation. The proposed rule would shift from a totality-of-the-circumstances approach back to a Core Factors test, with economic dependence as the central inquiry.

The hearing examined policies aimed at making it easier for individuals and businesses to work, hire, invest, and build. It came as the Trump administration launched a Deregulation Strike Force through the Small Business Administration, which claims to have eliminated more than $110 billion in burdensome regulatory costs for small businesses in one year.

What They're Saying

Austen Bannan, an employment policy fellow at Americans for Prosperity, argued that more than 70 million Americans now earn some or all of their income as independent workers, yet outdated labor laws trap them in rigid employment categories.

"Labor laws like the Fair Labor Standards Act and the National Labor Relations Act were designed for a 1930s workforce," Bannan said, noting that manufacturing now represents less than one in ten jobs, down from a third when those laws were written roughly 90 years ago.

Bannan cited a Biden-era Bureau of Labor Statistics survey finding that less than one in ten independent contractors would prefer a traditional job. He advocated for passage of four bills: the Modern Worker Empowerment Act (H.R. 1319), the Save Local Business Act (H.R. 4366), the Working Families Flexibility Act (H.R. 2870), and the Employee Rights Act (H.R. 4154).

Elizabeth Milito, executive director of the National Federation of Independent Business Small Business Legal Center, emphasized the burden of regulatory compliance on small firms. She highlighted NFIB's call for Congress to make a small business exemption permanent in 2026 and the organization's priority of passing meaningful regulatory reform legislation.

But Rebecca Reindel, director of occupational safety and health at the AFL-CIO, offered a starkly different perspective. "These rules are written in blood," Reindel's argument implied, warning against rolling them back without understanding their origins.

Douglas Holtz-Eakin, president of the American Action Forum, provided economic analysis supporting the deregulation framework.

The tension erupted most sharply when Rep. Ilhan Omar (D-MN), the subcommittee's ranking member, delivered a withering critique. She cited multiple absences: the committee has held zero hearings on raising the minimum wage, zero hearings on addressing workplace violence, and zero hearings on child labor laws. Yet, she noted, the Trump administration announced a plan to weaken child labor laws for 14-year-olds.

She stated that the Trump administration has fired staff across the Department of Labor, weakening OSHA. Rep. Ilhan Omar stated that committee Republicans voted to block OSHA from issuing any standard protecting workers from extreme heat.

Rep. Ryan Mackenzie (R-PA), the subcommittee chair, countered that American workers and businesses deserve a reasonable regulatory environment that supports growth and prosperity, not red tape and delays. He framed the hearing as examining policies to make it easier for individuals and businesses to work, hire, invest, and build.

Political Stakes

Austen Bannan stated that the reforms will provide workers with greater choice and opportunities in the workplace to unleash prosperity and take advantage of an evolving and innovative labor market.

Several bills discussed at the hearing (particularly H.R. 1319, H.R. 4366, H.R. 2870, and H.R. 4154) would enshrine the administration's regulatory rollbacks into law, making them harder to reverse in a future administration.

According to the Economic Policy Institute, Trump and Secretary Chavez-DeRemer are advancing an anti-worker agenda that proposes to eliminate regulations protecting workers' health, safety, and fair compensation.

Wage and hour penalties have decreased 94 percent during Trump's second term, while workplace health and safety penalties have dropped 45 percent.

The Other Side

Bannan stated that more than 70 million Americans earn some or all of their income as independent workers.

The absence of new protections for gig workers or independent contractors (what Bannan called "benefits safe harbor" provisions) means workers gain flexibility but lose security.

What's Next

The hearing record remains open for 14 days to allow written statements and other material to be submitted. Members can submit written statements electronically in Microsoft Word format by 5 p.m., 14 days after the hearing.

The bills discussed (H.R. 1319, H.R. 4366, H.R. 2870, and H.R. 4154) face an uncertain path. Republicans control the House, Senate, and White House.

The Department of Labor's October 2026 deadline for finalizing the independent contractor rule creates a near-term benchmark.

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