Sunday, February 12, 2017

Labor Law: Anticipated Changes Under Trump Administration

The 45th president was inaugurated last month, but the Secretary of Labor position still must be confirmed. President Trump’s selection for the position, Andy Puzder, is the CEO of CKE Restaurants, the parent company of Carl's Jr. and Hardee's.

The president can dramatically influence the trajectory of regulations impacting the workplace, not just with the Secretary of Labor selection, but also with the selection for the chair of the Equal Employment Opportunity Commission, all of its commissioners and general counsel, as well as filling open positions to the National Labor Relations Board - all of which must be approved by the senate.
As with any change in administration, the agencies then hire like-minded leaders who will set the agenda for the next four years.
Changes in labor laws and federal agencies may greatly influence employers as well as employees. And such changes will surely be reflected on updates of labor law posters.

The following are the anticipated changes under Trump administration:
  • The federal minimum wage will likely increase to $9/hour, an increase of $1.75 from the current federal minimum wage of $7.25/hour since 2009.
  • DOL, Wage and Hour Division: One of President Obama’s major labor-related achievements was the overhaul of overtime pay regulations in a manner that would nearly double the minimum salary level at which an employee can be exempt from overtime pay. However, just before the final rule was to go into effect on December 1, 2016, a federal district court judge suspended the regulation while considering a legal challenge from 21 states and a coalition of business groups. Puzder, whose confirmation hearing is scheduled for February 7, 2017, has been critical of the overtime rule, arguing in a May 2016 op-ed in Forbes that it will “simply add to the extensive regulatory maze the Obama Administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere.” Although the DOL has filed an interlocutory appeal challenging the district court judge’s preliminary injunction blocking the DOL’s overtime rule, the new Trump DOL could either withdraw the appeal (assuming a third party does not intervene to continue the appeal) or begin the administrative rulemaking process to change the regulation. Alternatively, the new Congress may pass legislation nullifying the regulation. In addition, during Obama’s presidency, the Wage and Hour Division issued administrator interpretations (guidance on how to interpret the laws, which are not legally binding on the courts) that sought to greatly expand when businesses can be held liable as joint employers and to narrow the circumstances in which workers could be treated as independent contractors exempt from federal wage and hour laws. Under President Trump, the Wage and Hour Division could scale back these administrator interpretations to provide more employer-friendly interpretations.
  • DOL, Office of Federal Contract Compliance Programs (OFCCP): The OFCCP is the agency that ensures that employers doing business with the federal government (federal contractors and subcontractors) comply with laws and regulations requiring nondiscrimination. The Obama administration made numerous changes to affirmative action requirements via executive orders, bypassing the congressional and administrative rulemaking processes. President Trump has stated his intention to revoke President Obama’s executive orders. Among the Obama initiatives that could be repealed under President Trump is the Fair Pay and Safe Workplaces executive order, known by its opponents as the “blacklisting” order. The order requires prospective federal contractors and subcontractors to disclose workplace law violations that occurred during the previous three years and to give wage statements detailing pay and hours to employees and independent contractors; it also prohibits arbitration agreements relating to Title VII of the Civil Rights Act or sexual assault. However, because the Federal Acquisition Regulatory Council issued a final rule implementing this order, it may take additional time for the rule to be changed. Litigation to enjoin the final rule is pending. In the meantime, the Trump administration could ask Congress to pursue repeal of the rule through use of the Congressional Review Act, a law that allows Congress to repeal new rules on an expedited basis through a resolution of disapproval, as long as the regulations were issued within 60 legislative days of the new administration. A number of other executive orders issued by President Obama may be scrutinized, including the executive order that raised the minimum wage contractors pay employees performing work on covered federal contracts ($10.20 per hour as of January 1, 2017) and the executive order that requires federal contractors to provide paid sick leave to employees working on government contracts.
  • DOL, Occupational Safety and Health Administration (OSHA): As DOL secretary, Puzder could review a number of OSHA standards that were issued over the last eight years. He is likely to curtail OSHA’s new record-keeping rule, which requires covered employers to file injury and illness information electronically with the government by July 1, 2017 (and on an annual basis thereafter); the information will then be posted online for the public. Puzder also might focus on the standard by which OSHA enforces the more than 22 whistleblower statutes under the agency’s whistleblower protection program. In the last several years, OSHA lowered the employee’s burden of proof necessary to prove retaliation.
  • Equal Employment Opportunity Commission (EEOC): On January 25, 2017, President Trump appointed EEOC Commissioner Victoria A. Lipnic as acting chair to take over the leadership role from Chair Jenny R. Yang. Lipnic joined the EEOC in 2010, and during her tenure, she was one of two commissioners who voted against the EEOC's July 2015 decision that sexual orientation discrimination is gender discrimination prohibited by Title VII. President Trump also will have the opportunity to nominate the EEOC’s new general counsel to replace David Lopez, who left in December 2016. Given the change in leadership, the agency’s enforcement priorities and litigation decisions will almost certainly shift. In recent years under Yang, the EEOC has made equal pay a top priority. In furtherance of this commitment, in September 2016, the EEOC announced final changes to the Employer Information Report (EEO-1), which will require employers to annually report aggregate compensation data for all employees by gender, race and ethnicity across pay bands. These changes are set to become effective in March 2018; however, under Lipnic, who had voted against the EEO-1 pay data report proposal, and other Trump appointees, the EEOC could seek to modify these changes before they come into effect.
  • National Labor Relations Board (NLRB): On January 26, 2017, President Trump appointed Philip A. Miscimarra, the sole Republican member of the NLRB, as acting chairman, taking over from Democrat Mark Gaston Pearce. The NLRB currently has two vacant seats, both of which President Trump is likely to fill with Republican members. Additionally, the term of NLRB General Counsel Richard F. Griffin, Jr. will expire in November 2017. With these new appointments, the NLRB’s controversial joint employer standard in Browning-Ferris Industries of California, Inc. could be reversed. The 2015 decision in Browning-Ferris broadened the joint employer standard to include relationships where the potential joint employer has the ability to control an employee’s essential terms and conditions of employment — even if it never actually exercises such control. (See 2016 Insights article “A New World for Joint Employers.”) In addition, since its 2012 decision in D.R. Horton, Inc., the NLRB has consistently maintained that the National Labor Relations Act prohibits arbitration agreements that require employees to waive the right to pursue labor-related class and collective actions. Recently, the U.S. Supreme Court agreed to hear, on a consolidated basis, three cases relating to the D.R. Horton decision and the circuit split that developed thereafter. Among the new president’s first orders of business will be to nominate a Supreme Court justice to replace the late Justice Antonin Scalia; a conservative Trump nominee likely would join a majority in rejecting the board’s position in D.R. Horton.

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