Now that Donald Trump has been elected president, it is time to predict how his policies will affect American businesses and their employees. This is not easy because he has not spoken in much detail about the specifics of many of these policy areas. However, based on initial signals and statements the Trump team has made throughout the campaign, we can make some educated guesses as to how his policies will affect labor and employment issues over the next four years.
1. He may expand some employee rights and entitlements. Some might assume that Trump’s election is not favorable for employees. This may be true in some areas, but not all. Most notably, Trump has stated that he favors raising the federal minimum wage from $7.25/hour to $10/hour – not as much as Secretary Clinton’s $12/hour, but still an increase. Trump similarly has stated that he supports a six-week paid maternity leave for women to recover from childbirth – not as much as Secretary Clinton’s 12 weeks, but still paid leave, which is common in many countries but anathema to U.S. businesses.
2. He may exempt small businesses from the new overtime rules. Some of our clients’ first question the day after the election was: Does this mean we don’t have to follow the new overtime regulations? The answer: probably not.
Much has been made of the new overtime rules going into effect on December 1, when the salary threshold to be exempt from overtime eligibility rises from $23,660/year to $47,476/year, making approximately 4.6 million Americans eligible for overtime when they previously were not.
At no point has Trump indicated that he would push to eliminate this change entirely. However, Trump stated in August that he would favor exemptions from this rule for small businesses. He did not provide any specifics, such as what constitutes a “small business” or whether the exemption would be total or partial. However, this possibility will be enticing to small businesses, which may struggle to pay extra overtime wages. In the meantime, assume that you still need to comply with these changes.
3. Federal agencies that enforce employment laws will almost certainly be less aggressive. The National Labor Relations Board (NLRB), the Equal Employment Opportunity Commission, and the Department of Labor have all aggressively pursued various areas of employment law under President Obama, generally much more so, for example, than they did under President Clinton. One notable example is the focus of the NLRB, an agency created to govern union/management relations, on picking apart employers’ social media and other policies based on language it says restricts employees’ right to communicate about their employment. Not only is it unprecedented, it is so “cutting edge” few of us could have imagined it eight years ago. Almost certainly, these efforts will greatly diminish (and very possibly would have diminished even had Secretary Clinton won).
4. He will probably push for use of E-Verify. One of the biggest planks in Trump’s platform is to curb illegal immigration, and an effective way of doing so is by making it harder for illegal immigrants to obtain work. Trump will likely require use of E-Verify by all employers. E-Verify is an online system to check a new employee’s I-9 form against federal records that confirm eligibility to work in the U.S. The program is currently voluntary and used by over half a million employers. If it is made mandatory, that usage rate will skyrocket and will likely aggressively curb employment of illegal immigrants.
5. The Affordable Care Act is an endangered species. Last but not least, one of the first things Trump is likely to do when he takes office is to try to kill Obamacare. Experts disagree whether Trump will be able to eliminate the law quickly and entirely or whether he will have to dismantle it piecemeal over time, but one way or another, health insurance laws are likely to change. Many employers have decried the current law as being too expensive for them, and they may be relieved by Trump’s efforts to overturn it. However, uncertainty remains as to what sort of system will take its place, how and when the transition will occur, and what sort of savings employers may see.
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