A Message From Your Friendly, Pessimistic HR Expert

Monday, June 19, 2017

I really do hate to be the bearer of bad news.

There is no “but…” to follow that. It is simply a statement of fact. In recent weeks, at conference presentations and in conversations with clients, I have found myself in the role of dampening the enthusiasm of business owners and executives when they begin to gush about the windfall of support they expect from having a Republican-led White House, Senate and House of Representatives.

“This is the most business friendly administration and Congress that we’ve had in decades,” they often say. And clearly, based on statements from President Trump and Congressional leaders during and since the campaign, one would certainly expect that to be the case.

But not according to your friendly, pessimistic HR expert. So far I am seeing regulatory rollback focused on environmental rules, but not so much when it comes to employment and the workplace.

Why do I think that, when all is said and done, we are in for a lot of disappointment?

First, while under typical circumstances a Republican-controlled government would presage a deregulatory, pro-business approach, Donald Trump is not your typical Republican president. And now that we’ve started to get into the nitty gritty of regulatory rollbacks, the outcomes do not seem quite so assured.

The one big employment-related initiative thus far, of course, has been the attempt to repeal and replace Obamacare – and that hasn’t gone so well. In the end, the White House and the Republican majority could not hold together and get the legislation passed, so the Affordable Care Act remains the law of the land. Given the complexity of the act (it extends far beyond the employer mandate and the minimum benefit package), along with the demonstrated political complexities of its repeal, our best guess is that the ACA will continue in its current form until at least the 2019 renewal period.

What about the overtime threshold that the Obama administration doubled to more than $47,000 last year? While the business community was hoping to see that reversed, all Mr. Trump has said so far is that he will want to exempt small businesses from the requirement. Not sure what will happen next on this.

During the campaign Mr. Trump and his daughter Ivanka spoke frequently about the need to expand paid child care and parental leave. Since the inauguration, however, very little has been said and it remains unclear how these programs would be administered or funded. We shall see.

In one key area, immigration, there are signs that the Trump administration will actually be adding new layers of regulation on employers. Most notably, during the campaign Mr. Trump often called for mandatory E-verify for all employers, which is something that very few states require and some, including Illinois and California, prohibit. Requiring its mandatory use will certainly impact many of our clients, particularly in the janitorial and car care industries.

There’s another big reason why I have doubts about an impending wave of regulatory relief for employers. Looking at this more broadly, it is not much of a stretch to assume that as Washington continues to muddle along in hyper-partisanship and dysfunction, states and local governments will continue to forge ahead with their own workplace laws and requirements, leaving businesses to scramble to remain compliant in all the locations where they do business. Put another way, it’s one thing to be hopeful for regulatory relief at the federal level, but don’t let that divert your focus away from real regulations that are being put into place in the states where your business operates:

Minimum Wage – Effective in 2017, 19 states increased their minimum wage provisions, requiring that businesses in those states adjust accordingly. Moreover, many more counties and cities have established their own minimum wage requirements as well, further creating a financial and administrative burden on businesses.
Ban-the-Box – In an increasing effort to facilitate pathways to employment for rehabilitated ex-convicts, many localities have instituted requirements that prohibit businesses from having on their employment application a box that inquires whether the applicant has ever been convicted of a crime. The argument for Ban-the-Box laws is that by answering this question on the application, qualified candidates with criminal records are adversely impacted during the hiring process.
Pay Equity – In a continued effort to establish equal pay for women, many states and localities have made it illegal to ask for prior salary history when hiring a new employee. The reasoning is that pay discrepancies for women become perpetuated when employers base new hire pay on their prior salary rather than on the equitable pay of the position.
Paid Sick Leave and Parental Leave – Many localities have implemented some form of minimum benefit for paid sick leave and for parental leave upon the birth or adoption of a child. Again, these programs vary in how they are administered and funded and establish differing reporting and notification requirements.
Scheduling Predictability - Many cities have instituted some form of scheduling predictability legislation that requires a minimum period of time to post schedules, such as 10 to 14 days ahead, to ensure that workers can plan their work schedules and make accommodations for other jobs or family obligations. These laws typically require an added pay incentive for employees who are required to be on-call or face short notice scheduling changes.
Drug Testing – With the increasing passage of recreational and medical marijuana laws, combined with the continued federal ban on marijuana use, employers are left to navigate a myriad of compliance issues around testing for marijuana use. Establishing a cohesive, legal policy that complies with both the state and federal laws is not easy and employers are left to do their best with little guidance from state or federal regulators.

Clearly, there remain many initiatives on the federal, state and local level that have a significant impact on employers. When I discuss these issues with business owners and executives, invariably I get the feeling I am spoiling their good mood. It is never my intention to do so – a good mood is a terrible thing to waste. But before we get too excited about anticipated deregulation, we need to keep an eye out for what is happing at all levels of government, not just the one in Washington.

By Claudia St. John, President – Affinity HR Group, Inc.