With the impending presidential administration change in the new year, many business owners are left wondering how potential policy changes will impact their business operations. While we can’t be certain, here are some key policy changes that are anticipated under the next presidential administration as well as what you can do to prepare your business.
Expected Policy Changes Under the Second Trump Administration
Labor Relation Policy – There is an expected shift from the previous administration’s focus on employees to employers when it comes to labor policies. This will likely result in restricting unions and their activities, and make the union decertification process easier.What should you do as an employer? Review workplace policies and union efforts in your organization to align with these expected shifts, but stay compliant with current policies until then. Specifically, your policies regarding union organization are entirely up to your discretion as an employer, but it’s important they are clearly defined and understood.
Workplace Safety – There will likely be reduced oversight when it comes to workplace safety, resulting in fewer Occupational Safety and Health Administration (OSHA) inspections and a rollback of stricter safety mandates.What should you do as an employer? With these scaled back safety policies, it’s important to ensure you are still maintaining compliance with existing safety laws, and keep an eye on OSHA inspection trends in your industry and area. It’s also never a bad idea to review your inspection readiness in case of an unexpected inspection.
Overtime Pay – The new overtime rule that was presented by the previous administration earlier this year would have significantly raised the number of employees that were eligible for overtime pay. It was set to go into full effect in 2025, but a federal judge blocked this rule nationwide just last month.What should you do as an employer? This one is tricky to predict at the moment, but at this point it is unlikely that this new overtime rule will go into effect. The best advice we have for you right now is to continue monitoring litigation and stay tuned for further updates. In addition, understand the Fair Labor Standards Act (FLSA) regarding the salary and duties test for classification to ensure compliance with that Act.
Federal Minimum Wage – It is unlikely that there will be any drastic hikes to the federal minimum wage. Small increases are possible, but it is not predicted to reach $15/hour.What should you do as an employer? Redirect your focus from looking at federal minimum wage changes to local and state-level changes as this is where the minimum wage level is likely to be altered under the new administration.
Taxes on Tips – This was one of the few key points that was a bipartisan agreement in the possible elimination of federal income taxes on tipped wages.What should you do as an employer? If you’re a hospitality employer and tips are a part of your current organization’s compensation structure, review this structure and related policies and prepare them for potential changes.
Pay Data Collection – The Equal Employment Opportunity Commission’s (EEOC) revived pay equity data collection efforts are expected to end. This proposal would have required employers to provide information regarding wages and number of hours worked to the government as a part of their EEO-1 submission. The EEOC would then use this data to identify pay gaps and alleged pay discrimination practices.What should you do as an employer? Keep your focus on state-level pay equity laws and voluntary pay audits. It’s also important to ensure that your organization is practicing pay equity to level the playing field and avoid significant penalties.
Paid Leave – Laws and other regulations regarding paid leave are expected to become a state-level issue. Therefore, no federal mandates regarding required time off to manage an illness, the birth of a child, or other major life events are expected, but local laws are predicted to expand.What should you do as an employer? It’s important to stay updated on local laws and state requirements as there is an anticipated increase in paid leave requirements at these levels being imposed on employers.
Immigration – Stricter policies regarding immigration are expected, including harsher rules for H-1B visas, green cards, as well as Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) protections. These policies will affect the current available workforce pool and increase penalties for undocumented workers. There may also be a return to workplace immigration raids and increased I-9 audits.What should you do as an employer? Tighten your employment verification processes as well as ensure the eligibility of all employees currently working for you. Monitor immigration laws that may impact hiring and employment, especially if your organization relies on a foreign workforce in any capacity.
Artificial Intelligence (AI) – There are expected regulation rollbacks when it comes to AI, more or less giving it free rein at a federal level. This is a direct reversal of the previous administration’s AI executive order that called for heavy regulation and monitoring.What should you do as an employer? Proactively address potential AI-related discrimination risks in your organization. Update employer policies related to how employees can use AI.
Independent Contractor Classification – Looser standards on how employers can classify their employees as independent contractors are not anticipated.What should you do as an employer? Review worker classifications for compliance with federal and state laws. Understand the Fair Labor Standards Act (FLSA) regarding the salary and duties test along with understanding the independent contractor verbiage.
Other predictions include narrower interpretations of diversity, equity, and inclusion initiatives (DEI) and Trump appointing members of the Republican Party to key agencies including the National Labor Relations Board (NLRB) and EEOC.
Put simply, employers should prepare for significant policy reversals from the previous administration as well as align and prepare their operations with these anticipated federal changes in mind. We also recommend monitoring local and state requirements as it is likely at these levels that any significant changes regarding employment and other human resource initiatives will take place.
If you have any concerns regarding how to prepare your organization for this presidential administration shift, our HR advisors can help. Click the link below to schedule a free consultation with us.
Comments