The Election Is Over, Now What?

The 2016 Presidential election will go down as one of the most unpredictable, polarizing and controversial elections ever to occur in United States history. Although it was anticipated that the House of Representatives would remain controlled by the Republicans, the race was decidedly less clear with regard to control of the White House and Senate. But now that Republicans have won both majorities in the House and the Senate, and President-elect Donald Trump is in the midst of making selections of who will serve in his administration, what impact will this election have for employers? The outlook is murky at best.

Trump’s victory could be good news for employers looking to scale down employee-friendly initiatives advanced by the Obama administration. Thus, there is an expectation that a Trump presidency could reverse President Obama’s employee favorable workplace policies from the past eight years. Trump may achieve this end by rescinding several employment-related Executive Orders and re-issuing former President Bush-era Orders. However, the timing of these changes is unclear as they may be considered lower priority for a Trump administration that may instead focus its initial efforts on issues like immigration and repeal of the Affordable Care Act.

One of Obama’s signature employment initiatives was the Department of Labor’s expansion of overtime protections under the Fair Labor Standards Act (FLSA), a federal law that establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments. Under Obama, the FLSA covered approximately 4 million more workers under the “white collar” exemption, a rule which many employers did not support and now has an unclear future under a Trump administration.

The new FLSA regulations, finalized in May 2016, would more than double the minimum salary required to qualify for the white collar exemption to $47,476 per year (currently $23,660 per year) and create an index for increases in the future. The overtime eligibility minimum for highly compensated workers would also be raised from $100,000 to approximately $134,000 under the final rule. Though these new regulations are finalized and were projected to become effective December 1, 2016, nearly two months prior to President-elect Trump’s inauguration, it is unclear what immediate efforts, if any, the Trump administration will make in changing the regulations after Trump takes office.

Adding further complications to the outlook, on November 22, 2016, a federal court judge in Texas issued a preliminary injunction that temporarily blocks the Department of Labor from implementing and enforcing these revised white collar overtime regulations on a national basis. Judge Amos L. Mazzant III, a federal judge for the Eastern District of Texas, issued the ruling in a consolidated set of cases brought by 21 states and several business organizations. The cases challenge the changes described above regarding the white collar exemption. In his written ruling on the plaintiffs’ motion for preliminary injunction, Judge Mazzant found there would be a substantial likelihood of success on the merits and plaintiffs would be irreparably harmed if the rule was not enjoined. This preliminary injunction ruling offers some relief to employers that were concerned about meeting the December 1 effective date, however, there is no certainty with regard to future developments in the case and/or whether a Trump administration will repeal the regulations. Thus, while employers do not have to comply with the regulations as of December 1, as initially contemplated, a future compliance date, if any, is uncertain.

During his campaign, Trump offered numerous contradictory positions on several employment issues, such as not supporting an increase in the minimum wage while supporting issues like paid family leave that contradict traditionally business-friendly positions. As a result, there are several uncertainties and it will be difficult to predict what will happen under a Trump administration. In general, we think it safe to assume that during the Trump administration legislation pushing for paid leave, minimum wage increases, and other worker-friendly measures will more often fall to the states and localities. In turn, we expect more activity on this front for worker friendly states and localities (such as, for example, California and the San Francisco Bay Area).

If you would like to discuss these issues further, or have any questions about this blog, please contact us.