Over the past six months, since the start of the Trump
Administration, I have delivered perhaps a half-dozen presentations on what workplace
regulations and changes employers can expect from the new President. My sessions always had to begin with a disclaimer
– we really don’t know what to expect from the new Administration, so all we’re
doing is really reading political tea leaves and wish lists.
Fortunately, we now have some clear signs about the new Administration’s
priorities. Of course, the President has
free reign to make changes to regulatory issues that are the domain of the Administration’s
executive branch. What will happen in
the House and Senate is much harder to predict.
That said, here are some of the initiatives being currently
promoted by the Trump Administration:
Repeal of the
Affordable Care Act (ACA). At the
time of writing this article, a repeal and replace version of the ACA has
passed the House and the Senate is working on a version of its own. The Senate versions that have been floated so
far have met resistance from both conservative and moderate GOP members of the
Senate, creating a politically challenging situation for the Senate Majority
Leader. Should a version pass the
Senate, a reconciliation of the two versions would need to be created and then
voted on by both houses before reaching the President’s desk. Long story short, we have quite a distance to
go before there’s an ACA repeal and, given the amount of time necessary for
providers and insurers to react to the changes, even if the law is repealed and
replaced within the next few months, we anticipate that employers will see no
changes until at least 2019. Our advice
is to stay the course and to check in with your health insurance broker – they
remain your best source of information about how any changes will impact you
and your company.
Rule. On December 1, 2016, a new
minimum salary threshold was to go into effect which would have required anyone
earning a salary of less than $47,476 to become eligible for overtime. This proposed rule is currently held up in
court. Trump’s new Labor Secretary,
Alexander Acosta, said during his confirmation hearing that while he agrees
that the current threshold of $23,660 is too low and should be adjusted, it
should not be increased to the level proposed by Obama. Rumor has it Acosta is eyeing $33,000 as the
new minimum salary threshold. Our advice
is to hold tight until either a new rule is proposed or the court acts on the
current injunction, but you can expect that the threshold will certainly be
increased from its current level.
Contractor Guidance. Within the last
two years of his term, President Obama’s Administration released guidance to
employers on how to assess whether an independent contractor should be
considered an employee under the Fair Labor Standards Act (FLSA). The new guidance created a much higher
standard of “economic dependence” and would have reclassified many independent
contractors as employees. In one of his first acts as Secretary of Labor, Mr.
Acosta withdrew this guidance and returned to the long-standing “control standard”
which focuses much more on whether the contractor truly is independent and is
able to maintain control over how and when the work should be performed. For more on how to determine if your
independent contractor is classified correctly, search for “DOL Factsheet #13.”
Maternity/Paternity Leave. In his 2018 Budget Proposal, President Trump proposed
a new federal paid maternity/paternity/adoptive parent leave program. The program would provide for 6 weeks of paid
leave for new parents and would leave the structure and the funding of the
program largely up to the states. States would administer (and fund) the program
through their Unemployment Insurance (UI) program. The level of the benefit and funding are
largely undetermined at this point, but it is anticipated to be approximately
the same level of financial benefit as each state’s weekly UI benefit. Since
most presidential budget proposals are really an Administration wish list, it
will be necessary for the House or Senate to design and usher this program
through to passage, leaving it with an uncertain fate.
Mandatory E-Verify for
All Employers. Presently, E-Verify
is largely a voluntary internet system that enables employers to verify the
legal work status of potential employees.
E-Verify is mandatory for all federal contractors and, on the federal
level, is voluntary for all other employers.
Nine states—Alabama, Arizona, Georgia, Louisiana, Mississippi, North
Carolina, South Carolina, Tennessee and Utah—require E-Verify for all or most
employers, with some carve-outs for small businesses. Eleven states—Colorado, Florida, Idaho,
Indiana, Michigan, Missouri, Nebraska, Oklahoma, Texas, Virginia and West
Virginia—require E-Verify for most public employers. Minnesota and Pennsylvania
require E-Verify for some public contractors. Nationwide, barely 10% of private
employers currently use E-Verify. In his
2018 budget proposal, President Trump allocated funding to require all private employers
in all states to use E-Verify for all hires.
Given the limited use of this system today, this initiative, should it make
its way through Congress, represents a significant change in most employers’
hiring process. Stay tuned!
Initiatives. In the absence of significant congressional action on numerous
workplace initiatives over the past few years, many states and localities have
moved forward with their own regulatory requirements, including increasing the
minimum wage, implementing equal pay rules, establishing mandatory sick and
parental leave programs, ban-the-box and scheduling predictability laws.
Clearly, legislating workplace rules and regulations on a
state or local basis creates a sizeable challenge for large, multi-location
employers who must track and comply with each regulation. In response, numerous states have passed
state workplace preemption laws which make it illegal for localities to legislate
workplace standards that differ from those of the state. We can expect to see the rate of state and
local employment regulations increase as well the number of state preemption
In the months ahead, we will be monitoring what bubbles up,
especially in the area of deregulation and tax reform – the next big areas of
change. We’ll keep you posted!
By Claudia St. John, President – Affinity HR Group Inc.