Election Update: What Can Employers Expect From Trump’s Administration?
Political pundits have projected that many of the Obama administration’s employment initiatives will be scaled back under Donald Trump’s administration. The only thing we know for certain is that change is on the horizon. A reasonable assumption is that laws slated to take effect after Trump’s inauguration on January 20, 2017, are more likely to be affected than changes that have already been implemented by the Obama administration.
Affordable Care Act
Repealing the Affordable Care Act (ACA) received a lot of attention during Trump’s campaign. Because Republicans will control the House, Senate, and presidency, there will likely be amendments to the ACA sooner rather than later. President-elect Trump has provided some insight into his plans during postelection interviews. It seems likely that the provisions that allow children to keep their parents’ health insurance until age 26 and ensure that individuals with preexisting conditions can obtain coverage will remain in effect. Those are two of the most successful and least controversial provisions of the ACA. While Trump agrees that everyone who wants coverage should have it, he wants to eliminate the individual mandate, which assesses penalties on individuals who fail to obtain insurance. Recall that the goal of the individual mandate is to ensure that healthy people have coverage to even out the risk pool for insurers. There has been no discussion yet on whether the employer mandate will follow the same exit path as the individual mandate. It has been suggested that regardless of whether amendments are made to the ACA, enforcement of the law and regulations could be less than vigorous under the Trump administration. Because much of the ACA is enforced by the IRS, employers would be wise to continue abiding by the current law unless any proposed changes become legal.
On December 1, the revised overtime regulations were scheduled to increase the salary threshold for the white-collar exemptions from $455 a week ($23,600 annually) to $913 a week ($47,476 annually). On November 22, a Texas judge issued an injunction blocking the regulation, for now. (See “Overtime Alert” on pg. 3.) The Department of Labor (DOL) appealed the injunction and has requested expedited review of its appeal. We expect this will not be the last we hear on this issue.
EEOC looks into implications of “big data.” The use of “big data”—algorithms, “data scraping” of the Internet, and other means of evaluating information on individuals—has the potential to reduce employment discrimination, but it also can worsen bias, Jenny R. Yang, chair of the Equal Employment Opportunity Commission (EEOC), said after a public hearing on the issue in October 2016. A panel of industrial psychologists, attorneys, and labor economists told the EEOC that the use of big data is expected to grow. Yang cautioned that although innovation can reduce discrimination, “it is critical that these tools are designed to promote fairness and opportunity, so that reliance on these expanding sources of data does not create new barriers to opportunity.”
Final rule issued for handling retaliation complaints under ACA. The U.S. Occupational Safety and Health Administration (OSHA) in October published a final rule that establishes procedures and time frames for handling whistleblower complaints under the Affordable Care Act (ACA). The ACA protects employees from retaliation for receiving marketplace financial assistance when purchasing health insurance through an exchange. It also protects employees from retaliation for raising concerns regarding conduct they believe violates the consumer protections and health insurance reforms found in Title I of the ACA.
EEOC updates Strategic Enforcement Plan. The EEOC announced in October that it has approved an updated Strategic Enforcement Plan (SEP) for fiscal years 2017-2021. Updates in the new SEP include the addition of two areas related to the emerging issues priority outlined in the previous SEP: (1) issues related to complex employment relationships in the 21st century workplace, focusing specifically on temporary workers, staffing agencies, independent contractor relations, and the ondemand economy, and (2) backlash discrimination against those who are Muslim or Sikh or persons of Arab, Middle Eastern, or South Asian descent as well as persons perceived to be members of these groups. Agencies study ways to advance diversity in law enforcement. The U.S. Department of Justice (DOJ) and the EEOC have released a report that examines barriers and promising practices—in recruitment, hiring, and retention—for advancing diversity in law enforcement. The report, developed with support from the Center for Policing Equity, aims to provide law enforcement agencies, especially small and midsize agencies, with a resource to enhance the diversity of their workforce by highlighting specific strategies and efforts in place in police departments around the country.
EEOC’s proposed rule changes
The Equal Employment Opportunity Commission (EEOC) designated pay equity as a top priority in its Strategic Enforcement Plan for fiscal years 2013 to 2016. On January 29, 2016, the EEOC proposed revisions to the EEO-1 form. The revisions will require all employers with 100 or more employees to submit additional data on wages paid to employees—i.e., the pay data collection rule. Employers must submit data on wages paid sorted by gender, race, and ethnicity. The rule is intended to encourage voluntary compliance by requiring employers to pay regular attention to and evaluate compensation structures. Additionally, by using data gathered under the new rule, the EEOC can focus its investigations on employers that unlawfully discriminate by paying workers less based on their gender, race, or ethnicity. The new EEOC rule is scheduled to take effect March 31, 2018. Because it does not take effect until 2018, we anticipate changes to—or the elimination of—the pay data collection rule.
Executive Orders are legal issuances from the president that have the force of law. They can be superseded by laws passed by Congress or court rulings. In addition, a newly elected president can issue Executive Orders to countermand those of the previous president. The Executive Orders rumored to be high on Trump’s list to countermand sooner rather than later include those that relaxed immigration enforcement. The Executive Order requiring federal contractors to pay a minimum wage of $10 per hour also could be countermanded.
The empty seat on the U.S. Supreme Court has received the most attention. Given Trump’s business experience, we anticipate that a pro-employer justice will be appointed. The list of potential nominees he released in June included conservative Judge Dianne Sykes, who sits on the U.S. Court of Appeals for the 7th Circuit (whose rulings apply to all Wisconsin employers). Additionally, filling the two vacancies on the National Labor Relations Board (NLRB) would allow Trump to gain majority control. The current Board has made significant changes in how it interprets the National Labor Relations Act (NLRA) during the last several years. The NLRB could substantially change franchise law in a pending case by holding McDonald’s liable for labor law violations committed by independent franchisees. The NLRB has already ruled that a company can be a “joint employer” of contract employees in its plants (changing long-standing understanding of contractor law), approved accelerated elections for unions, and allowed unions access to employers’ e-mail systems. A more conservative Board will likely revisit a number of those decisions and at least stem the tide of reversals of previous NLRB decisions.
Although there is the potential for significant changes to take effect after January 20, 2017, employers should remain in the “now.” Continue to follow the ACA regulations unless there is a legal change and clear direction. Employers would be wise to continue to abide by current law unless any proposed changes become legally binding ones.
This article, slightly modified to note recent updates, was featured in the December 2016 issue of the Wisconsin Employment Law Letter, which is co-edited by Axley Brynelson Attorneys Saul Glazer and Michael Modl and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.