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A look at possible labor policy changes under Trump
SHERRY KARABIN
Legal News Reporter
Published: January 24, 2017
From expanding the number of workers eligible for overtime pay to increasing employer transparency for worker injuries, accidents and wage data—those are just a few of the initiatives the U.S. Department of Labor (DOL) unveiled during President Barack Obama’s presidency.
Now many analysts and attorneys are predicting a rollback or lack of enforcement of those rules if President-elect Donald Trump’s nominee for U.S. Secretary of Labor Andrew Puzder is confirmed. Puzder serves as chief executive officer of CKE Restaurants Inc., the parent company of fast food chains like Carl’s Jr. and Hardee’s.
The Senate has pushed Puzder’s confirmation hearing to February. It was tentatively set for Jan. 17.
“I think we are going to experience some drastic changes,” said Sarah Moore, a partner at the management-side employment law firm Fisher Phillips. “The question is whether these changes will happen quickly or slowly.
“The DOL under the Obama administration has been pro-union and pro-employee,” said Moore. “Mr. Puzder is pro-management and anti-regulation and it’s likely that even if he is not confirmed the next nominee would hold similar views.”
Rachel Reight, an employee rights attorney at Baasten-McKinley & Co said she has already begun preparing her clients about how the potential changes could impact them.
“I am definitely concerned about the possibility that the labor secretary may not be as aggressive in enforcing Fair Labor Standards Act and anti-discrimination regulations,” said Reight. “Mr. Puzder has been an outspoken critic of some of the worker protections that the Obama administration enacted.
“Mr. Puzder’s nomination signals a shift away from the progress made for workers during the Obama administration.”
Moore said the new labor secretary will have a number of mechanisms available to reverse the pro-labor trend.
“He can seek to overturn some of the changes by relying on Congress, utilizing the courts, pursuing administrative rulemaking or marshaling resources in a manner that results in decreasing investigation and enforcement,” said Moore.
She said one of the first tests may come with regard to the DOL final rule, which was anticipated to expand the number of workers who would be eligible for overtime and stood to increase salary standards for exempt workers.
The rule, which was set to take effect on Dec. 1, would have raised the exempt employee salary threshold to $47,476 annually/$913 per week from $23,660 per year/$455 weekly.
The salary threshold, along with other factors, enables employers to determine whether white collar and other workers are entitled to overtime pay. The final rule would have automatically extended overtime pay protections to over four million workers within the first year of implementation.
But in late November a federal judge in the eastern district of Texas issued a nationwide emergency preliminary injunction, saying the Obama administration had exceeded its authority.
The U.S. Department of Justice filed an appeal of the injunction with the Fifth Circuit on behalf of the DOL and moved to expedite that appeal.
“The new labor secretary could withdraw the appeal, leaving the preliminary injunction in place,” said Moore. “He could also use the interim final rule to circumvent the regular rulemaking process eliminating the 30-day public comment period using the court-issued injunction to make his case.”
“Preventing the overtime rule from taking effect will hurt the millions of workers who would have benefited from the change,” said Reight. “The new rule would have doubled the amount of overtime pay for certain eligible employees.”
It is anticipated that Puzder will revisit several U.S. Department of Labor Occupational Safety and Health Administration (OSHA) safety and health standards set under the Obama administration.
Moore said companies anticipate increased recordkeeping requirements, OSHA penalty amounts and whistleblower protections will face significant scrutiny and be eliminated in whole or in part.
In addition, she said certain regulations on federal government contractors and subcontractors mandating disclosure of violations of fair pay and workplace safety requirements within the past three-year period, President Obama’s so-called “Blacklisting Executive Order,” could be removed under Puzder’s watch.
The new labor secretary could also halt plans to implement pending additional EEO-1 reporting requirements for employers with 100 or more employees.
“In September 2016, the Equal Employment Opportunity Commission announced its approval of a revised version of the EEO-1 report,” said Reight. “The revised form requires employers to report their employees W-2 compensation information and hours worked. The form long required employers to report sex and race/ethnicity information to the EEOC.
“The changes were scheduled to take effect in 2017. However, the deadline for the first report is March 31, 2018 after Mr. Puzder would be confirmed if he is to be confirmed.”
Moore said Puzder’s perspective as CEO of a national fast food chain should not be overlooked. “He has seen the impact of the National Labor Relations Board’s focus on expanding the responsibility of franchisors and will likely take steps to roll back any broadening of NLRB power and oversight that occurred under Obama’s administration.”
As part of the shift, Moore said she expects the number of employees in the DOL’s Office of Labor-Management Standards (OLMS) to increase.
“The office enforces union disclosures and accountability and since President Bush left office there has been about a 50 percent cut in resources and staffing,” Moore said.
“Reassigning resources back to the OLMS would increase union accountability and reflect a pro-management priority by the department.”
Although Trump’s pick is not against raising the federal minimum wage, he supports so-called “rational” increases. While he has not detailed what that means, he does oppose the Obama administration’s efforts to increase the minimum wage to $10.10 an hour.
Reight said a rise in the minimum wage, “even if it is less than $15 has the potential to benefit many workers.”
She said one of her concerns is a statement in which Puzder suggests that machines could replace some of the tasks previously performed by workers.
“Mr. Puzder is quoted in a 2016 Business Insider article saying that machines are ‘always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip and fall or an age, sex or race discrimination case,’” said Reight.
“He did go back on what he said a bit by adding that humans would need to be present to ‘assure smooth experiences’ for customers.”
One thing the nominee has been clear about is his support for repealing the Affordable Care Act as well as his criticism of paid sick leave policies for federal contractors working on certain government contracts.
“It is likely that we would see a partial repeal or replacement of the Affordable Care Act under the Trump administration,” said Reight. “A complete replacement could leave millions of Americans uninsured.”
“The first 90 days will be the best indicator as to how the new administration will proceed,” said Moore. “The operational setup of the various heads of the departments, Puzder included, will determine whether the ACA will actually be unraveled and how quickly.”