Without needing to be a scholar of American politics, it is clear the election of Donald Trump has given rise to speculation about what his presidency will mean for US citizens and businesses — more so than almost any other president-elect in living memory.
Sifting through the column inches, it is interesting to note some optimism when it comes to the areas of business and employment. But what will the impact be for those who use and supply contingent labor?
Healthcare. One of the biggest issues in relation to the employment of labor under the Obama administration was the provision of healthcare in accordance with the Affordable Care Act (ACA). The costs associated with the ACA’s reporting, disclosure and notification requirements resulted in some employers reducing the number of full-time employees in favor of more part-time roles and temporary workers.
The Republicans have already made a vow to repeal and replace the, but at this stage the details of any replacement legislation are unclear. Employers will welcome reform if there is less bureaucracy and administration associated with the provision of healthcare in the future. Any reduction in cost will surely encourage employers to recruit more employees into full-time roles, while reducing the numbers of part-time and contingent workers.
Immigration. Immigration control is an issue that has received a lot of attention following announcements by Trump during his campaign about restricting migrants from Mexico and parts of the world considered to pose a risk arising from terrorism. In keeping with this, Republican lawmakers have re-introduced a bill, The Protect and Grow American Jobs Act, seeking to change the eligibility requirements for H1-B visas, increasing the minimum salary level to $100,000 and removing the Masters’ degree exemption.
While a number of companies have been accused of abusing the current system, Mark Roberts, CEO of TechServe Alliance, argues that “with a shortage of qualified IT professionals in many high-demand skill sets, access to qualified foreign talent is critical.” This could stifle innovation in many companies that rely on highly skilled foreign contingent labor.
Taxes. On the other hand, Trump’s announcements on tax reform, to make businesses more competitive “to keep jobs in America, create new opportunities and revitalize [the US] economy” will be welcomed by many in the manufacturing sector. As companies expand, they often use a contingent workforce until new markets are established. Competitive business rates and fairer trade deals should feed into business confidence, resulting in the hiring of greater numbers of temporary workers.
Collective bargaining. There are two vacancies on the National Labor Relations Board that have not been filled by President Obama, meaning there is currently a two-to-one Democratic majority. With the election of two Republicans to fill the vacant seats, it is likely that the NLRB will be more business-friendly and some of the decisions in recent years may be reversed. Notably, the decision of the Democrat majority in Browning Ferris Industries on the subject of joint employment would be likely overturned with a Republican majority. In that case, the board overruled a long-held principle that for a host employer to be considered a joint employer of agency workers under the National Labor Relations Act, the employer need only have the contractual right to control the workers and need not have actually exercised any control.
For staffing firms and their clients, where employees are represented by one or more unions, a more conservative board will provide greater certainty in dealings with agency workers.
Wages. Finally, while the changes to the “white collar exemptions” under the Fair Labor Standards Act introduced by the Final Overtime Rule, due to have come into effect on Dec. 1, 2016, have been blocked by a nationwide injunction, there has been no announcement from Trump or his advisers as to which way they will go in terms of handling the Department of Labor’s pending appeal against the injunction.
Some clues may be obtained from Trump’s appointment as Secretary of State for Labor, Andy Pudzer, who has criticized the overtime rule change. However, this does not give any insight into whether the Department of Labor under Pudzer would seek to increase the standard salary level for the exemptions from its current level of $23,660, which was set in 2004.
Pudzer has also said that raising minimum wages hits small businesses and leads to a loss of jobs, so it seems unlikely that he would be in favor of increasing the federal minimum wage from $7.25.
The biggest threat in the form of increasing labor costs comes from minimum wage increases and paid leave entitlements enacted by states and cities taking matters into their own hands and setting minimum employment rights for workers in their jurisdiction. This localization of labor law is likely to influence expansion plans for businesses that operate nationwide to a greater extent than the inauguration of the next president.