Expect Pro-Business, Pro-Employer Changes Under Trump Administration

by Ballard Spahr LLP
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Ballard Spahr LLP

When Donald Trump won the presidential election in November, management-side labor and employment lawyers everywhere scrambled to figure out what the changing administration would mean for our nation's employers and our clients. It seems likely that, with President Trump at the helm and a Republican Congress ready to support his initiatives, labor and employment law and policy will take on a decidedly pro-business and pro-employer bent during the Trump administration.

In this alert, we provide you with insights into the likely contours of some of the more important changes in key legislation such as the Affordable Care Act (ACA) and in the Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC), the National Labor Relations Board (NLRB), and presidential executive orders.

Affordable Care Act

President Trump and the Republican Party have expressed a desire to "repeal and replace" the ACA. On January 12, the Republican-controlled Senate took the first step toward that goal by voting to create a repeal framework by January 27. Beyond that broad "repeal and replace" policy objective, there are significant differences between Trump's specific ACA-related policy proposals and the proposals from a number of Republicans in Congress.

For example, President Trump proposed replacing the ACA with a free(er) market for insurance by allowing the sale of health insurance across state lines. In addition, on January 16, President Trump said that his plan will mean that every American has health insurance. In contrast, House Speaker Paul Ryan proposed scrapping the ACA by, among other things, repealing the employer mandate and repealing most of the ACA's coverage-related mandates and requirements.1

Although both President Trump's plans and those of Congressional Republicans may be heralded as pro-employer, there are many details differentiating these plans that will need to be ironed out if the Trump administration hopes to achieve its objectives of cheaper health care and universal access to it.

In addition to their own differences, President Trump and Congressional Republicans also will have to deal with the Democrats, given that Republicans do not have a filibuster-proof majority in the Senate. Although Republicans are working on circumventing the Democrats using the bill reconciliation process, it is doubtful that they will be able to ignore the Democrats altogether.

As a result, whatever replaces the ACA could continue to reflect some of the Democrats' favored components, especially ones that President Trump seems to favor as well, such as "coverage for everybody" (i.e. some kind of individual mandate). Whatever emerges also is likely to contain components over which there is apparent agreement among President Trump and Congressional Republicans, such as the expanded use of health savings accounts.

For more information about the ACA and related transition developments, please read our recent legal alert.

Equal Employment Opportunity Commission

President Trump will appoint a new EEOC chair when Jenny R. Yang's term ends in July 2017. With new senior EEOC leadership, we can expect a shift in priorities. Under Chair Yang, the EEOC focused on pay equity, disability bias, and prosecuting discrimination claims based on gender identity and sexual orientation. We expect the EEOC will continue to focus on disability bias under new leadership. However, it is unclear what other policy and enforcement initiatives the agency's new leadership will prioritize.

For example, Vice President Mike Pence reportedly opposes new pay equity legislation. This may signal that the new EEOC leadership could do away with or modify the EEOC's revised EEO-1 reporting requirements, which obligate employers to disclose pay data information along with the other data provided through existing EEO-1 reporting requirements. This regulatory change will impact 2017 reporting due by March 31, 2018. Several Republican lawmakers already have introduced legislation to prevent implementation of the new rule.

Department of Labor

President Trump announced his nomination for the new Secretary of Labor, Andrew Puzder. Although the full extent of Mr. Puzder's impact on the agency is hard to predict, he has made public pronouncements against the DOL's new overtime regulations. The regulations, finalized in May 2016, raised the minimum salary threshold required to qualify for the "white collar" exemption to an inflation-indexed $47,476 per year. Because of an ongoing court battle, the regulations have not gone into effect.2 If the DOL wins in court and its regulations go into effect, Mr. Puzder may be stuck with them unless Congress acts to amend the Fair Labor Standards Act (FLSA) or the DOL undertakes a new rulemaking process to dial back the changes.

Mr. Puzder also came out publicly against raising the minimum wage, calling such legislation "job killers." As with most of President Trump's appointees, Mr. Puzder is for much less regulation on businesses, believing that "over-regulation" stifles business growth. We, therefore, can expect a reduced emphasis on enforcement at DOL under Mr. Puzder’s stewardship.

National Labor Relations Board

The NLRB also is poised for change under the Trump administration. President Trump will appoint at least two, and possibly three, new members to the five-person Board. With at least two likely new Republican appointees, employers can expect a more business-friendly NLRB. President Trump will have an opportunity to nominate a new NLRB general counsel in November 2017 as well--a position that is important when it comes to the Board's policy agenda. Whoever President Trump chooses will likely be more business friendly than the current general counsel, Richard Griffin, a former union general counsel.

Employers also can expect that the new NLRB will limit the expansion of employees' Section 7 rights and/or seek to overturn the joint employer standard that was established in Browning-Ferris, among other Board decisions. In that case, the Board determined that a relationship between one company and another need not involve direct control—only "indirect control"—for the two companies to share liability for one company's labor and employment violations. In addition, we expect the newly constituted NLRB to prioritize overturning the "quickie election" rules, which reduced the timeframe between filing a petition to unionize and an election.

Presidential Executive Orders

Like Presidents Bush and Obama, President Trump may use executive orders as an expeditious method of implementing policy, particularly when tied to doing business with the Federal Government. He is expected to rescind several of President Obama's executive orders. For instance, he already expressed a desire to rescind the blacklisting rule, a rule that requires government contractors and subcontractors to report workplace violations found by administrative agencies and courts. The rule allows the government to look at this record when deciding whether to award future contracts or cancel existing ones. President Trump also may seek to reverse the rule establishing paid sick leave for employees working on federal contracts.

In short, employers would be right to anticipate change, and very likely it will be business and employer-friendly. Employers also may anticipate heightened legislative and regulatory activity at the state and local level, which is more favorable to employee rights, as the states and cities scramble to fill the gap that may be created by the federal regulatory agenda.

 

 

 

 1. Ryan's proposals also include (1) repealing the Cadillac Tax; (2) placing a cap on the tax exclusion for group health plan coverage; (3) expanding HSA access; and (4) removing certain limits and restrictions on Wellness Program Incentives.

2. In November 2016, a Texas federal court judge issued a preliminary injunction blocking the new rules from taking effect on December 1, 2016. The DOL subsequently filed a notice of appeal and requested that the appeal be heard on an expedited basis, in which all briefing will conclude by the end of January 2017. As of today, the DOL's new overtime rules are not in effect.


 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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