Labor & Employment Law Under President-Elect Trump

Stoel Rives LLP

In the wake of the election results, the question on everyone’s mind now is: What impact will President-Elect Trump have on employers?  Trump has thus far given few details on his thoughts on labor and employment.  But with Republicans maintaining control of Congress, employers could see a lot of changes in the next couple of years.  Our experts weighed in with their thoughts on how different areas of labor and employment law may be affected.

Happening Now: Divided and Emotional Workplaces 

Post-election emotions are still running high and activism is ongoing. It is not surprising that personal feelings about the outcome are spilling over into the workplace. Many employers are reporting that political differences are creating a division in their employees’ workplace relationships. Needless to say, tension and difficult conversations between co-workers can have a negative impact on morale as well as productivity.

Although political affiliation is not a protected class under federal law, some states (such as California) and cites (such as Seattle) prohibit discrimination on the basis of political activities or affiliation. There also may be indirect avenues of federal protection for private sector employees under Section 7 of the National Labor Relations Act and for public-sector employees, such as under the Civil Service Reform Act of 1978. Furthermore, this is a good time to consult your employee handbook to see whether you have provided more broad protection by prohibiting political affiliation discrimination in your policies. In all events, political issues–particularly in the current post-election climate–border on or directly affect other protected classes, such as race and gender.

Accordingly, employers are prudent to be cognizant of what is happening now in the workplace and try and bridge the divide and minimize the risk of workplace incidents.  At a minimum, this can include reminding your workforce of your Code of Conduct and/or other policies that require respect and Equal Employment Opportunities in the workplace, together with reassuring all employees and making it abundantly clear that discrimination and harassment of any kind in the workplace will not be tolerated. To this end, many employers are finding it helpful to redistribute copies of their policies and to hold trainings on the policies facilitated by HR professionals or outside legal counsel. If you would like to explore what communications or trainings may be a good fit for your organization, please contact one of our attorneys. And, if a concern or complaint arises, employers should immediately conduct an internal investigation, implement corrective action, or take other appropriate action.

Wage & Hour 

  • As employers know, December 1 is the deadline to comply with the new salary threshold for white collar exempt employees.  (See our blog post here.)  But will that rule remain after President-Elect Trump is inaugurated?  Almost certainly, but perhaps with some adjustments.  Trump said during the campaign he would consider a carve-out for small businesses, but there are no details on what that would look like.  There is pending legislation that would eliminate or reduce the increase in the salary threshold; other legislation would phase the increase in over time.  Still other proposals would eliminate the rule’s triennial wage increases.  President Obama would probably veto any of those proposals, but President-Elect Trump may not.  For now though, employers should comply with the new rule by December 1, and we’ll keep you posted on any developments.  To not do so runs the risk of immediate wage and hour non-compliance. Remember that an increasing number of states (and cities!) have enacted their own wage and hour requirements, so changes will be coming in this area regardless of the actions of the Trump administration.
  • President-Elect Trump said he would support an increase of the federal minimum wage to $10 per hour.  That was a departure from many other Republicans, who oppose such an increase, so this could be an issue to watch in 2017, particularly since some state minimum wage rates are based on or are set above the federal minimum wage rate.

The Affordable Care Act and Employer Group Health Plans

Republicans have been trying for years to repeal  many parts of the Affordable Care Act (“ACA”).  Although a total repeal of the ACA is unlikely, it is quite possible that at least some of the ACA’s rules for employer-provided group health plans will be repealed or amended in 2017.

For employers sponsoring group health plan coverage for their employees, here are some predictions what the 2017 Congress might do:

ACA Provisions Likely to Be Repealed

  • Individual mandate requiring most Americans to have health insurance
  • “Cadillac Tax” on high value health coverage
  • Employer shared responsibility payments (pay-or-play penalties)

ACA Provisions Likely Not to Repealed

  • Requirement for health plans to cover children to age 26
  • Prohibition on pre-existing condition exclusion provisions

ACA Provisions that May or May Not Be Repealed

  • Requirement for group health plans to provide preventive care at no cost to plan participants
  • 90-day maximum waiting period rule
  • Health coverage information reporting (Form 1095-C)
  • Requirement to prepare and distribute Summary of Benefits and Coverage

Other Provisions Under Consideration

  • Expanded use of Health Savings Accounts (HSAs)
  • Ability for insurance companies to sell health insurance across state lines
  • Establishment of high-risk pools

For more information and details on the future of the employer group health plans, attend the Stoel Rives webinar “Life After the ACA:  What’s Next for Employer-Sponsored Health Coverage” on December 8, 2016 from 9 to 10:30 am, pacific time.  For information on the webinar,  including details on how to register, see here.

Labor Law and The National Labor Relations Board 

Labor law will probably see significant changes under President-Elect Trump.  As astute readers know, the NLRB sways with the political winds.  And because the Board currently has two vacancies that President Trump will fill – thus giving conservative appointees a majority – we expect the Board to lean more heavily in favor of employers, rather than towards employees as under the Obama Board of the last several years.  Specifically, we foresee the Board possibly reversing the Obama Board’s decisions in the following ways:

  • Making class action waivers lawful
  • Making it more difficult for employers to be considered “joint employers
  • Reversing the rule that allows temporary workers to join the bargaining unit with regular workers (see our blog post here)
  • Reading employer handbooks with less scrutiny (see our blog post here)
  • Slowing down the “quickie” election process (see our blog post here)
  • Disallowing “micro” bargaining units (see our blog post here)
  • Reversing the expansion of what constitutes “protected concerted activity” by employees (see our blog post here)

In addition, the Trump administration is likely to rescind the controversial Labor-Management Reporting and Disclosure Act’s  “persuader” regulations, should they survive a pending court challenge.

Federal Contractors 

As federal contractors know, President Obama issued several employee-friendly executive Orders, including mandatory paid sick leave, raising the minimum wage and requiring employers to report previous employment violations.  Even if President-Elect Trump does not immediately move to rescind any of these executive orders upon taking office, it is unlikely he will pursue similar policies.  The Obama-era changes affecting contractors take on added significance if reports of significant infrastructure spending are to be believed.

The final rules implementing paid sick leave under Executive Order 13706 were recently finalized with a fast-approaching January 1, 2017 compliance deadline.  Conventional wisdom does not favor an outright rescission or delay of the effective date.  Employers should be prepared to meet the requirements by the first of the year.  On the other hand, some change is likely as the new administration settles in.

Executive Order 13706 requires affected contractors to make several important decisions about the structure of their paid sick leave and particularly whether to use a grant or accrual method.  Similarly, they must decide whether to pay out leave on an employee’s termination and face the prospect of reinstating the leave if the employee returns to work.

As employers begin to address this requirement they are finding that compliance can be even more vexing where the employee works in a jurisdiction that has ether a state or local paid sick leave requirement.  Care must be taken to insure that the employer’s practices are consistent at all levels.

Another requirement for federal contractors that takes effect January 1, 2017 arises under the Fair Pay and Safe Workplaces Executive Order (Executive Order 13673) issued in July of 2014. Under Section 5 of the Order (known as the “Paycheck Transparency Clause”), contractors must, beginning Jan. 1, provide all individuals performing work with pay stubs, every pay period, detailing the number of “hours worked, overtime hours, pay and any additions made to or deductions made from pay.” If employees are exempt and their hours are not tracked, they must be informed of their exempt status. Individuals hired as independent contractors must also be informed of their status. All required notices and pay stub statements must be provided in English as well as any other language with which a significant portion of the workplace is fluent if that portion of the workforce is not fluent in English. Most likely, many contractors are already providing their workers this information but in order to minimize violations of this new rule (and avoid penalties or possibly other adverse consequences), every employer covered by the rule should self-audit and ensure that compliance is in place by the beginning of the year.

While Executive Order 13673 also included a requirement that covered contractors report any labor law violations and significantly restricted the use of arbitration agreements , these “blacklisting” and “arbitration” components of the rule have been stayed by a preliminary injunction obtained on October 24, 2016, in the U.S. District Court, Eastern District of Texas. What happens next depends on whether the Dept. of Labor, under the Trump administration’s watch, decides to appeal the entry of the preliminary injunction or if the case proceeds to a trial on the merits.

(For more information on these government contractor specific issues see our blog posts here, here, and here.)

OSHA

The President-Elect had not made workplace safety one of his priority areas, but look for action on OSHA’s controversial electronic reporting requirements — as well as its impact on drug testing programs, which we blogged about here and here.

EEOC

In January 2016, President Obama announced a policy to promote gender equality by requiring that many employers report on EEO statements the earnings and hours worked for all employees.  See our blog discussing that policy here.  That rule was set to go into effect in 2018; the new administration may prevent its implementation.

Less Activity From Federal Agencies, More Reliance on States

With full Republican control of Congress and the White House, it is likely that employers will see less action from federal agencies like the DOL and the EEOC.  It will be up to states, at their discretion, to wade into these areas.

Will Changes Happen Immediately?

Maybe.  In the regulatory context, changes to President Obama’s regulatory actions could take some time to go through the proper notice and comment period making immediate changes unlikely.  However, the Administrative Procedure Act allows agencies to forgo that process under 5 USC Sec. 553(b)(3)(B), which could allow for relatively swift action.

Moreover, there are active lawsuits on some of President Obama’s policies – for example, the overtime rule.  President-Elect Trump’s Department of Justice may choose not to defend those policies very strenuously, increasing the chances of their demise in court.

While we cannot say for certain what impact President-Elect Trump will have on employers, we can assure you that we’ll keep you apprised of any developments. 

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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