President Trump promised to be a disrupter during his 2016 campaign.
President Trump said he’d be an instant disrupter, and our lives will certainly be disrupted over the next few years. Here are some labor law predictions from our panel of experts at the 2017 CUE Spring Conference.
Trump got elected to drain the swamp, but he’s finding out that DC is the Atlantic Ocean. The initial Trump inner circle ran into the gears of government. We saw that with Andrew Puzder’s failed nomination as Secretary of Labor.
With respect to the NLRB, help for employers is on the way, but it’s going to take time. There are two vacancies right now, and many cases that have been pending for over 2 years. We need a full board to render decisions.
We also must wait until the NLRB’s General Counsel, Richard Griffin, exits the agency. His term runs out in November 2017. Until then, there will continue to be a wall between the General Counsel and board members. The General Counsel controls what happens in regions, and has issued guidance that the board was unaware of until it was published. However, we’ve heard about a few cases that he settled when he knew that they would require years of resources, and that the new board wouldn’t align with his decision to assign the requisite assets.
In the long term the board will likely overturn as many regulations as possible until a new General Counsel is appointed. Until then, employers should:
- Review handbooks
- Follow the joint employer regulations
- Follow the General Counsel’s lead and argue that existing law is bad law – especially if it’s a new law – and should change
This was enacted by rulemaking, so the process will have to restart in order to reverse this decision. This means that new rules will have to be proposed, followed by a public comment period, and a notice period of the final rule. It usually takes a year, at a minimum, to complete the process.
In the meantime, the General Counsel can issue guidelines for regions to interpret the rules more loosely. In the future, it’s possible that time limits and compliance will become more flexible. However, the unions will probably litigate these interpretations, and it’s possible that they will win.
Ivanka Trump is a proponent of women’s rights issues and paid family leave. Thus far, Trump hasn’t overturned Obama’s executive orders regarding affirmative action, sex discrimination, or paid sick leave. It remains to be seen what will happen with the EEO 1 form and pay equity issues.
In March, the DC Circuit heard appellate arguments on the NLRB’s joint employer decision. Both sides reported that the hearing went well. In theory, the court could say that the decision was bad and should be overturned. It’s more likely that the court will rule that the Board changed the rules and didn’t adequately explain the need for the change, remand it to the lower court, and the Board will revise the rule and make it go away. Alternatively, the court could give deference to the Board and allow it to stand. If this happens, though, the new Board will probably come up with an altogether new standard.
Employers will see changes in the Section 7 analyses, but they will take time. Right now, rules that prohibit revealing proprietary company information and the use of company logos violate the NLRA. This gives employees the right to put a company logo on signs when they’re picketing. Acting NLRB Chair Miscimarra recently wrote a dissent in a case that sets forth a more reasonable standard.
National Right to Work Legislation
The is an area where politics makes strange bedfellows. The US Chamber of Commerce says that states with existing right to work laws will oppose a national right to work rule because they want to keep their competitive advantage. Meanwhile, Missouri recently became the 29th state to enact a right to work law. At the federal level, it’s probably low on the GOP’s agenda since healthcare, tax reform, and national infrastructure appears to be front and center, at least until the 2018 midterm elections.
This rule would have required annual filings by companies that disclosed contractors used for labor advice. At this point, the rule is enjoined and probably dead in the water. The American Bar Association lobbied hard against it since it violated attorney-client privilege.
The Department of Labor (DOL) is charged with enforcing this rule, along with the FLSA, OFCCP, and OSHA regulations. Expect bureaucratic inertia at the DOL, and a continuation of Obama-era enforcement, until more political appointments are made.
Trump proposed a 21% budget cut at the DOL and the elimination of 19 agencies. Under Obama, the OFCCP had active case enforcement, which meant that audits went on for years and remained open. In contrast during the Bush era the OFCCP had active case management, which meant that they quickly reviewed records and ended compliance reviews. We can probably expect the OFCCP to revert to case management and compliance assistance versus enforcement.
FLSA Overtime Rule
This rule expanded the salary test for the overtime exemption from $23,600/year to $47,476/year. The duties test didn’t change, but most employers changed job descriptions, employee classifications, and salaries, in anticipation of the rule’s effective date of December 1, 2016.
The rule was enjoined and is not on appeal. The government has asked for an extension, twice, because they don’t know what their position is. The latest extension is until June 30, 2017. We can probably bet that the Trump administration will let the injunction stay in place, but that new rules will be proposed. This may include a higher salary threshold for an overtime exemption, but it probably won’t be as high as the one enacted under the Obama administration. Our panel expects to see a threshold of around $40,000. The Court also found the indexing process in the original rules troubling, so we’ll probably see a change to that rule.
We all know that the FLSA, which was originally enacted in the 1930’s, needs an overhaul, but no one seems willing to spend the political capital to change it. Instead, we’ll see changes to the minimum wage and scheduling laws at the local level. Most major metropolitan areas and 29 states have minimum wages that are higher than the federal minimum wage of $7.25/hour.
This is an area where the GOP, which is traditionally in favor of state’s rights, is considering a federal law to pre-empt state minimum wage rules. It’s an interesting battle of philosophies within the party. Much like the right to work issue, it’s an area that takes a lot of political capital and there doesn’t appear to be much willingness to spend it.
There’s a new Acting Chair at the EEOC, but it will take time for the agency to transition from Obama era policies. The President has stated that the EEOC will continue with their current strategic 5-year enforcement plan that concentrates on, among other things, pay inequality and vulnerable workers (immigrants). It’s too early to tell if the EEO 1 form will be still be required in the distant future, but it’s likely that until the EEOC has a majority of commissioners on its five-member panel, it will remain in force. Companies should plan to produce it in March 2018.
With the GOP in control in DC and the majority of state governments, there probably won’t be a lot of new legislation in the paid leave/pay equity areas. But that may change. Public opinion is already pretty far down the line in these areas. Plus, Ivanka Trump is leading on these issues. Companies should get their house in order so they can tell their story in a favorable light.
In his budget, Trump proposed 500 more border agents, 1000 more customs agents, and $15 million to fund E-Verify. Under this administration, it’s very likely that E-Verify will become a national requirement. The RAISE Act was introduced in the Senate on February 7, and proposes cutting legal immigration in half by ending future chain migration (family based immigration) and the diversity visa lottery.
Immigration is a hot topic for this administration, and it’s critical for business leaders to watch and be mindful of this issue. The President is learning that even with a majority, it’s hard to get legislation through Congress. Trump doesn’t have to go through Congress to deliver to his base and own this issue through administrative actions such as workplace raids, headlines, Twitter, and workforce enforcement.
As we stated at the outset of this article, the President likes to consider himself to be a disrupter. He’s also unpredictable, since he’s changed positions on many issues since being sworn in. Keep in mind that these are merely predictions, and are subject to change at a moment’s notice.
Guest blogger Liz D’Aloia founded HR Virtuoso to help companies optimize their employment application processes. HR Virtuoso creates customized, company-branded short form employment applications that work on any mobile device. This allows companies to get far more applications, and also keep their existing applicant tracking system. Prior to launching HR Virtuoso, Liz rose through the ranks of transportation, retail, and mortgage companies as a Senior Employment Attorney and VP of HR. Liz is a nationally recognized blogger, speaker, and HR practitioner. Please contact her directly at email@example.com with blog ideas, speaking engagements, and consulting requests. Follow us @hrvirtuoso.