HR Legalist

Predicting the Unpredictable — Labor and Employment Law Under President-Elect Trump

It’s been almost two weeks since Donald Trump was elected president, and information has been starting to emerge about his potential administration and policies. This week, HR Legalist examines some of the potential developments that employers can expect in the areas of labor and employment law during the Trump administration.  Of course, our readers should bear in mind that these are merely predictions based on statements made by President-elect Trump on the campaign trail and may not come to fruition during his presidency.

Executive Actions

During the campaign, Mr. Trump promised to cancel many of President Obama’s executive orders, which were issued based in the absence of Congressional action in certain areas.  Several of Mr. Obama’s executive orders impact federal contractors – including a $10.20 per hour minimum wage for covered workers, prohibitions on sexual orientation and gender identity discrimination, limitations on employee arbitration agreements, and a pending measure that would provide for mandatory paid sick leave for employees of federal contractors. With just the stroke of a pen, these orders could be nullified on his first day in office, if President-elect Trump follows through on his promise.

The Affordable Care Act

The President-elect has also stated that he would be willing to keep certain portions of the Affordable Care Act, such as coverage for people with pre-existing medical conditions. However, Mr. Trump is expected to support a repeal of the employer mandate, which requires employers with 50 or more full-time equivalent employees to offer coverage meeting certain requirements.  Congressional Republicans have already signaled support for removing the employer mandate, which is just one of the many aspects of the ACA that could change under the Trump administration.  However, given the complexity of the ACA and how it is interwoven with the Medicare system and other laws, any significant changes to the ACA may be slow in coming.

Legislative Outlook: Minimum Wage, Equal Pay, Paid Sick Leave, and LGBT Protections

During the Obama administration, partisan gridlock in Congress prevented the passage of several employment measures supported by the Democratic Party, such as increasing the national minimum wage, strengthening equal pay for equal work provisions, mandating paid sick leave, and adding workplace protections for LGBT employees.  Given that the GOP will now control both houses of Congress and the White House, it is highly unlikely that that these legislative measures will advance during the next administration. In light of the failed attempts to pass these measures at the federal level, many states and municipalities have gradually passed laws and ordinances addressing these same issues.  Therefore, employers should continue to keep a close eye on the areas where they operate to ensure compliance with all applicable laws and ordinances.

Judicial Outlook: Sexual Orientation Discrimination

In the absence of congressional action, the issue of sexual orientation discrimination in the workplace has been percolating through the federal court system. The EEOC has taken the position that sexual orientation discrimination is a form of gender stereotyping and is therefore already prohibited under federal law.  Earlier this month, a federal court in Pennsylvania agreed with the EEOC’s position. With other courts taking the opposite position, this issue could ultimately end up before the Supreme Court. In the meantime, President-elect Trump will have the opportunity to appoint conservative judges to the lower federal courts, and fill the vacant ninth seat on the Supreme Court, leaving the expansion of  LGBT workplace protections nationwide in question.

Changes at the EEOC

Last month, the EEOC released its Strategic Enforcement Plan (SEP) for the fiscal years 2017-2021. The SEP indicates that the EEOC will continue to target discriminatory practices that have a broad impact on an industry, company or geographic area, gender-based pay discrimination, and discrimination against employees who are Muslim or of Arab descent.  The EEOC also wants to increase its focus on workplace protections for temporary workers, staffing agencies, and independent contractors in the growing “gig economy.”

The EEOC is a bipartisan commission with five members, with each member serving a staggered five-year term. Mr. Trump will have an opportunity to appoint his first commissioner, and shift the balance of power to the Republicans, after the term of current chair Jenny Yang expires on July 1, 2017.  In addition, the EEOC’s general counsel recently announced that he will leave the agency in December, giving President-elect Trump an opportunity to appoint his successor when he takes office.  Under a Trump administration, the EEOC is expected to focus more on its backlog of existing discrimination claims, as opposed to the more ambitious priorities in the SEP.  Because the EEOC’s budget is subject to congressional approval each fiscal year, the commission’s funding could be more limited in the next few years under a Republican-controlled Congress.

Labor Law

Under the Obama administration, the National Labor Relations Board (NLRB) has staked out employee-friendly positions regarding union elections, joint employment and franchises, and the persuader rule (which was recently blocked by a court injunction in Texas). Under President Obama, the NLRB has also expanded employee rights in non-union workplaces by prohibiting employers from terminating employees who complain about workplace issues on social media, and by scrutinizing social media policies and other policies that it views as overbroad.

The NLRB is a five-seat board, and currently has only three members with staggered terms – two democrats and one republican. Because Senate approval is required to appoint new board members, any appointments made by President-elect Trump will likely not join the Board for several months.  The President-elect will also have an opportunity to nominate a new NLRB general counsel in November of 2017.  Whoever Mr. Trump chooses will likely be more employer-friendly than the current general counsel, Richard Griffin, a former union general counsel.  However, because the NLRB rules on labor law issues on a case-by-case basis, it will likely take time for any future Republican-controlled board to make incremental changes to national labor law.

Wage and Hour and Overtime

As reported earlier by the HR Legalist, the Department of Labor’s new overtime rule is set to go into effect on December 1, 2016.  Under the new rule, millions more employees making less than $47,476 per year will be eligible to receive time-and-a-half overtime if they work over 40 hours per week.  Congressional and legislative efforts to block the new rule have been unsuccessful. This week, the Eastern District of Texas is expected to issue a ruling on an injunction request filed by 21 states seeking to block the new rule.  While it is difficult to predict how the court will rule, employers should continue to prepare to comply with the new rule as of December 1^st.

During his campaign, Donald Trump didn’t take a clear position on the overtime rule, beyond giving one interview suggesting that he would favor a small-business exemption to the rule. The most likely route for delay, modification or repeal of the rule is through Congress.  However, a bill regarding overtime will probably have to wait until after President-elect Trump and Congress address other priorities, such as the Affordable Care Act.  In the meantime, we expect that a new Administrator of the Wage and Hour Division will be appointed and that this individual will likely take a less aggressive approach to enforcement of wage and hour issues.

Takeaways for Employers

While this political season has been anything but predictable, Donald Trump and his Republican counterparts in Congress could usher in a more employer-friendly political climate in Washington. However, given the many moving parts and various branches of government, most of these changes will be gradual and piecemeal.  HR Legalist will be monitoring these changes and trends, and encourages employers to consult with counsel regarding specific issues that will affect them in the coming months and years.