U.S.: New employment law regulations in 2017

It has been a little more than a month since President Donald Trump took office, and employers are anxious to see what changes the new administration will make that will affect businesses and employees. President Trump is certainly business-minded and has promised to focus on creating American jobs and incentives for businesses that bring jobs back from overseas. However, he has also presented himself as an advocate for blue-collar workers, which could put him at odds with more conservative thinkers on some employment issues. While it is difficult to predict what specific actions the new administration may take, we can gain some insight from actions the President has already taken and from statements made during his campaign.

What has happened so far?

• Freeze of Federal Regulations: The President has issued a Memorandum imposing a freeze on new federal regulations until they have been reviewed by a Presidential appointee. The Memorandum also delays by 60 days the effective date of regulations that have already been published but have not yet come into force. While this Memorandum does not apply to regulations that have already taken effect, it could impact some significant Obama administration regulations:
  • Department of Labor (DOL) Rule Amending White Collar Exemptions: The DOL’s Final Rule amends the white collar exemptions to the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). The amendments would have increased the annual salary over which employers are not required to pay overtime from USD 23,660 to USD 47,476 and the annual threshold for the highly-compensated employee exemption from USD 100,000 to USD 134,004. This would have extended eligibility for overtime pay to approximately 4.2 million American workers. In November 2016, a federal court issued an injunction to prevent the Final Rule being implemented, and this has since been appealed by the DOL, with no decision yet. It now looks likely that either the DOL will drop its opposition to the court’s decision or the regulations will be subject to further action after review by the Trump administration.
  • EEO-1 Summary Pay Data Reporting Requirement: In 2016, a revised Employer Information Report (EEO–1) was published, to include summary pay data. The revised EEO-1 report would require employers with 100 or more employees to report summary income by sex, race, ethnicity, and job group, in addition to the information required by the original form (i.e. who is employed by job category, race, ethnicity and sex).  Because the first report under the new rule is not due until 31 March 2018, it appears to be subject to review under the Memorandum.

• • ‘Fair Pay and Safe Workplaces’ Executive Order: This was signed on 31 July 2014 by President Obama and it requires certain federal contractors and subcontractors to disclose any violations of certain federal workplace laws (i.e. the  so-called ‘blacklisting’ provision). Regulations implementing the EO were published in August 2016, but the blacklisting provision was taken to the federal court in November 2016, which means that the EO is not yet in force and is subject to further review under the Memorandum. Additionally, the US House of Representatives has passed a ‘disapproval resolution’ to permanently block blacklisting requirements for federal contractors. The Senate is expected to approve the resolution, which will then be sent to President Trump for signature. The White House has stated that the President’s advisors will urge him to sign the resolution if it is presented to him.

• • DOL Persuader Rule: This requires employers, lawyers and labour consultants to disclose to the DOL any arrangement to persuade employees directly or indirectly concerning their right to organize or bargain collectively. Direct persuasion has always been reportable, but this covers ‘indirect’ activity. Because the Rule was subject to a court injunction in 2016, it had not taken effect when President Trump signed the Memorandum.  At this point, it is unclear whether the DOL will pursue its appeal against the injunction.

• Immigration. On 27 January 2017, President Trump issued an EO entitled ‘Protecting the Nation From Foreign Terrorist Entry Into The United States,’ which, among other things, imposes a 90-day entry ban on nationals from seven countries “of particular concern” and provides for certain changes to visa processing procedures. Challenges to the legality of the EO have been filed in federal court, and the Ninth Circuit recently upheld the temporary suspension of key provisions of the Order while the challenges are pending. It has been reported that the President will issue a revised EO on 1 March 2017, however, the administration has not officially confirmed this.

• Health Care Reform. President Trump has also issued an EO, ‘Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,’ by which relevant departments and agencies must take all action consistent with law to waive or delay the implementation of any provision of the Affordable Care Act (ACA) that would impose a financial or regulatory burden on stakeholders (including states, individuals or healthcare providers). The EO does not repeal the ACA, which would require Congressional action, but does signal that employers should anticipate some changes to the healthcare law over time.

Still to Come?

Changes to the Composition of the National Labor Relations Board (NLRB)

Under the Obama administration, the NLRB issued a number of decisions that were viewed as favourable to the trade unions, many of which overturned long-standing NLRB rulings. Some of the Board’s more significant actions included making employers liable for the acts committed by their contractors; invalidating many types of employer handbook rules and polices; and shortening the timeframe for union elections.

President Trump will be able to fill two vacancies on the five-member Board and employers are likely to see a shift in favour of more business-friendly rulings.

Changes in the DOL

President Trump will be able to nominate a new Secretary of the Department of Labor, who  likely will be more business-friendly than the previous incumbent.

Changes to the Equal Employment Opportunity Commission

Under former President Obama, the EEOC took steps to increase pay transparency, impose stricter reporting requirements, advance LGBTQ rights in the workplace, and moved toward a more systemic litigation programme. After less than a week in office President Trump replaced former EEOC chairman with Victoria Lipnic as Acting Chair of the EEOC. Though an Obama appointee, over the last few years Lipnic has often broken away from Agency majority, including dissenting in a 2012 landmark decision that held for the first time that discrimination against gay employees is a form of discrimination based on sex. She also voted against changing the EEO-1 form to require the reporting of summary pay data.

Minimum Wage Increase?

One of former President Obama’s hallmark campaign goals was to increase the minimum wage. This proposal was met with staunch opposition from Congress. Although unable to achieve an increase in the minimum wage rate for private employees, by Executive Order Obama increased the minimum wage for employees performing work on certain federal contracts.

President Trump’s view on the minimum wage issue has not been entirely clear. He once opposed increasing the minimum wage, but said on the campaign trail that he is not against an increase to the federal minimum hourly wage. Since then, he has said that while he supports raising the minimum wage to USD 10.00 per hour, he still believes that states should set minimum wage as they see appropriate. Thus, we may see increases in the minimum wage at state and local level, but whether the federal rate will change is uncertain.

Paid Maternity Leave?

On the campaign trail, President Trump suggested that he would support providing mothers six weeks of paid maternity leave. However, it is not clear whether Congress would approve such a bill and, if it did, what the details would be. In the past few years, several state and local governments have enacted paid leave laws, and employers are likely to see more activity at that level in future than at the federal level. Federal contractors and subcontractors are already subject to a paid sick leave requirement, pursuant to an Obama EO and DOL regulations implementing the EO. It appears unlikely that the Trump administration would take steps to amend the paid sick leave regulations for federal contractors, but it is possible.

The Bottom Line

Employers should anticipate that 2017 will be a time of change, and some of this may result in less regulation by the federal government. Of course, the precise nature of these changes remains to be seen.

First published on Global-HR.