2017: Out With the Old and In With the ???

21-Feb-2017

2017: Out With the Old and In With the ???

 

By Jason R. Mau

 

            For several weeks now, the headlines have been dominated by what a Trump administration might mean for any number of sectors.  Once the Inauguration has passed, and President-Elect Trump becomes President Trump, employers can expect that the administrative transition will affect some changes in the area of employment and labor law.  Whether the changes will be immediate is left to be seen, but all employers should be ready to alter (or hold off on) some HR procedures.  With some insight from our counterparts in D.C., Fortney Scott, LLC, editors of the Federal Employment Law Insider, we have put together a list of employment changes we can expect in Trump’s Administration. 

Entirely New Focus

            Of primary significance in the administration change is a definite focus on job creation.  Trump has continued to share his vision introduced during his candidacy to create an economy that will create millions of jobs over the next ten years.  Part of this initiative are plans to lower tax rates for businesses and lessen the burden of regulations imposed by what Trump calls an “out-of-control bureaucracy.”  Trump perceives many regulations to be “job killers,” many of which have been put in place by the prior administration.  Therefore, few doubt that Trump will follow through with his promise to rescind several recently adopted policies. 

            In fact, Trump has even stated that, in addition to requiring each federal agency to list all regulations imposed on businesses from most to least critical, he plans to rescind at least two regulations for each regulation issued during his presidency.  If any regulations are adopted affecting labor issues during his term, expect that the initial assessment will be based solely on job creation.  This view is substantiated in Trump’s pick for the Secretary of Labor, Andrew Puzder, CEO of CKE Restaurants.  Puzder is an employer and an outspoken critic of recently issued regulations on joint employment and overtime.   

            The selection of Puzder for Secretary of Labor is important because he will have an impact beyond the U.S. Department of Labor (DOL), and have an opportunity to advise Trump’s White House on all workforce issues, impacting the future direction of the Equal Employment Opportunity Commission (EEOC) and the National Labor Relations Board (NLRB).  As for the DOL, look for Puzder to help assemble a team immediately to get the Wage and Hour Division (WHD) up and running quickly to affect the change in direction. 

Regulations on the Chopping Block

            The selection of Puzder also essentially announces that recently released regulations will be placed along the wayside.  The first regulation likely to be affected is the overtime rules that were recently prevented from taking effect when a federal judge in Texas entered a nationwide preliminary injunction.  Although the saga of whether the rules will take effect is still ongoing, as the injunction was appealed and the Fifth Circuit Court of Appeals put the case on a course for an expedited review, the DOL under a new Secretary can withdraw the appeal.  This course of action is widely expected, which will result in the current overtime regulations from 2004 remaining in effect. 

            Also look for the recent injunction halting the regulations attempting to adopt the so-called “persuader rule” to be upheld and supported by the new administration.  The rule would have added more requirements for employers attempting to discourage workplace unions.  Trump is expected to take formal steps to ensure that the regulation is never resurrected.  Removing support from these regulations, especially if taken within Trump’s first 100 days, will signal a reprieve for businesses burdened by employer requirements.   

            Other employer requirements that appear to be headed towards rescission include recent Executive Orders applying to federal contractors.  Such orders include E.O. 13673, popularly called the “blacklisting rule,” requiring labor compliance disclosures and paycheck transparency to covered workers of any independent contractor relationship; E.O. 13706, requiring 7 paid sick days per year; and E.O. 13672, prohibiting sexual orientation or gender identity discrimination.  However, any rescission or roll-back on these Orders does not necessarily mean that employers can expect these issues will be ignored.  For example, rescission of 13706 may be accompanied by a more inclusive law on paid leave as discussed below.  Also, instead of repealing E.O. 13672, Trump may instead opt to amend it to add a religious exemption or simply add a similar provision in Title VII (Civil Rights Act) to make such exemption more extensive in federal law. 

Upcoming Shifts in Control 

 

            Many no doubt understand that a Trump Presidency means that the open spot on the Supreme Court will eventually be filled by a Trump appointee and that a Republican-controlled Congress will lead to more business-friendly legislation.  What may be less widely understood is that the terms of key positions on the EEOC and NLRB will be expiring soon and that the positions will also be filled by Trump appointees. 

            Currently, 3 of the 5 seats on the EEOC are inhabited by Democrats and one remains vacant.  Trump will have the opportunity to fill the vacant seat and potentially elevate the appointee to chair.  President Trump will also be able to fill the vacant office of General Counsel for the EEOC with his appointee.  While it is customary for a sitting chair to step down when a new party takes power to allow for a majority on the Commission, nothing has been customary about this transition in power.  Some believe that the current chair might wait until her term expires in July before stepping down, potentially leading to a legal fight.  If such a battle is waged, it may take nearly a year for the unpopular new EEO-1 compensation reporting requirements to be rescinded as expected.  Other reports that the recently released Strategic Enforcement Plan outlining the top enforcement priorities will be altered, and/or the EEOC’s wellness rule will be rescinded, may also take several months to materialize. 

            Two empty seats (again, of 5) on the NLRB will undoubtedly be filled by Trump, and current member Philip Miscimarra is expected to be elevated to chair.  However, we will likely see few, if any, changes in the NLRB’s priorities during the first year, as current NLRB General Counsel Richard Griffin, Jr.’s term does not expire until November.  The Board only rules on cases brought by the General Counsel, so it will not be reviewing any cases in which it might have an opportunity to change course on some of its more controversial positions (i.e. quickie election rule) in the near future. 

Changes on the Horizon

 

            While much emphasis has been placed on rescission of previous regulations, all indications suggest that a Trump administration will introduce several new changes as well.  For example, even though the overtime regulations currently appear dead on arrival, this does not mean that the 2004 regulations will stay in place.  Most critics of last year’s regulations recognize that the current salary threshold for overtime exemptions is too low for the present workforce.  This may mean that a replacement rule will be introduced despite Trump’s distaste for regulation.

            Also, as discussed above, changes to paid leave are expected to be adopted regardless of the fate of Executive Order 13706.  It may be that the federal government decides to step in and adopt a uniform set of standards for leave to help alleviate the current compliance burdens on businesses operating in areas where the trend of local and state governments has been the adoption of varying leave provisions.

            During the Trump campaign, America witnessed Trump’s own daughter championing ideas for paid maternity leave and closing the gender gap in pay.  These are two provisions that will have the support of her father.  Trump has developed a plan with the help of his daughter to guarantee six weeks of paid maternity leave, funded in part by a crackdown on unemployment insurance fraud.  As for fixing the gender pay gap, it is unknown how Trump will continue to focus on this concern, whether it be by additional pay data collection, or provisions directly addressing the discrimination, but the focus will likely not be dropped. 

            Beyond the likely changes outlined here, speculation continues on many other federal programs related to the employment realm.  2017 could also see changes to the Affordable Care Act, H-2b visa program for guest workers, or even tax deductions for childcare expenses. But, much is still unknown regarding how the Trump Presidency will (or can) bring about changes in these areas. With so many uncertainties, it will be very important to keep an eye on the developments in each of these areas and consult with your employment law experts to ensure continued compliance.  For now, the best advice may just be – Stay Tuned!