Trump Administration: What to Expect
Author: XpertHR Editorial Team
The recent election of Donald Trump as President of the United States could shape the landscape of HR and employment law for years to come.
Nothing is certain, but the following broad trends appear likely:
- A number of employment-related Executive Orders issued by President Obama may be rescinded, while Executive Orders issued under former President Bush may be reinstated;
- Officials who will stem perceived regulatory overreach will be appointed to lead key enforcement agencies like the Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC), the National Labor Relations Board (NLRB) and the Occupational Safety and Health Administration (OSHA);
- Paid leave laws, minimum wage increases and other worker-friendly measures will continue to originate in Democratic-controlled states and localities rather than at the federal level;
- Health care policies will continue to impact talent acquisition strategies; and
- Senate Democrats may be able to effectively block or substantially delay some legislation proposed under the Trump administration through the use of the filibuster.
Employers also should prepare for the possibility of developments in the following areas:
1. The Affordable Care Act and Health Benefits
President-elect Trump has said he wants to repeal the Affordable Care Act (ACA) within the first 100 days of his presidency, calling the law "an absolute disaster for families and small businesses."
Trump also supports:
- A cap on the employer-tax exclusion for health care;
- Reform of medical malpractice laws;
- Expansion of employer-sponsored wellness programs;
- Lowered trade barriers to allow overseas drug makers to sell in the United States;
- Greater transparency from doctors and hospitals on pricing;
- Allowing health insurance to be sold across state lines; and
- A full deduction of health insurance premium payments from individuals' tax returns.
However, full repeal of the ACA may prove challenging. Moreover, Trump has said he will consider leaving some parts of the law in place. These could include the ACA's prohibition on preexisting conditions and the provision allowing parents to cover children under their plan into their mid-20s, both of which enjoy public support.
Allowing health insurance to be sold across state lines would require significant federal regulation, making it unlikely that changes would take effect quickly.
Already on the wane, unions will likely see their powers (and perhaps membership) diminish even further under the Trump administration.
Trump is expected to support the proliferation of state right-to-work laws.
3. Wage and Hour
Trump has said he supports exempting small businesses from the new overtime rule that will take effect December 1.
It appears unlikely that the $47,476 minimum salary for overtime-exempt employees will be overturned, because it has broad public support and because doing so would require time-consuming notice-and-comment rulemaking. However, the Trump administration may limit, or even halt, future increases by repealing the thrice-annual inflation adjustments that are scheduled to kick in during 2020.
Trump has sent conflicting messages on the minimum wage. Regardless of his stance on the issue, the Republican-controlled Congress is not about to pass an increase in the federal minimum wage any time soon. As a result, more states and municipalities will probably take matters into their own hands by passing their own minimum wage increases.
4. Regulatory Reform
Claiming that overregulation costs the US economy $2 trillion each year, Trump has pledged to roll back regulations that affect businesses.
Trump promised to require that "for every new federal regulation, two existing regulations must be eliminated."
The president-elect plans to place a temporary pause on any new regulatory activity and review old rules in order to determine which rules should be eliminated. He will require each federal agency to document all of the regulations the agency imposes on businesses and then rank each regulation from most to least critical to health and safety. The least critical regulations would then be targeted for repeal.
Regarding immigration, employers should prepare for the possibility that:
- All immigration, including employment-based immigration, will be curbed;
- Executive orders protecting more than 700,000 undocumented immigrants (including the Deferred Action Childhood Arrivals (DACA) program) will be overturned;
- Green cards for foreign workers will be suspended until US employers hire from the available pool of unemployed domestic workers;
- The prevailing wage rate for the H-1B visas (visas for positions requiring specialized knowledge) will be raised, impacting employers that need professionals in the science, technology, engineering and mathematics fields;
- The J-1 cultural exchange program will be terminated;
- All employers nationwide will be required to use the electronic verification system (E-Verify), which currently is required only for federal contractors and for employers operating in certain states and municipalities;
- Immigration and Customs Enforcement (ICE) will increase enforcement of employment verification documentation; and
- Federal agencies will focus on compliance with existing immigration laws, particularly I-9 and E-Verify, with the use of a new I-9 Form required by January 22, 2017.
6. Maternity Leave and Onsite Childcare
The centerpiece of Trump's childcare platform is his proposal to enhance the federal unemployment insurance program to provide six weeks of paid leave to new mothers after giving birth (but not to fathers or to mothers who have adopted a child) before returning to work.
Trump estimates this benefit would cost $2.5 billion per year, with an average benefit of $300 per week. He says this cost could be offset by eliminating waste and fraud in the unemployment system. This would be less expensive for small businesses than mandating paid leave, he said.
Trump also plans to expand employer incentives for onsite childcare. According to his campaign website, an employer that provides an onsite childcare center currently receives a tax credit (a portion of which is recaptured if the center is kept in service for less than 10 tax years) of up to 25 percent of facility expenditures, plus 10 percent of resource and referral costs, up to a limit of $150,000 per calendar year. Trump's plan would "increase the cap, shorten the recapture period, and devise ways for companies to pool resources in order to make the credit more attractive."
7. Equal Employment Opportunity
All five commissioners on the Equal Employment Opportunity Commission (EEOC), including Chair Jenny R. Yang, have terms that are scheduled to expire before 2021. Trump will have a chance to almost completely remake the agency with new appointees.
Meanwhile, without the threat of a veto from President Trump, the Republican-controlled Congress is expected to reduce the EEOC's enforcement budget. As a result, the agency may narrow its focus to concentrate on high-impact cases addressing systemic discriminatory policies, patterns or practices.
Trump also could repeal upcoming changes to the EEOC's EEO-1 Report, which, if left untouched, would require certain employers to start reporting pay data starting in 2018.