Looking Ahead to 2017
“May you live in interesting times.”
(Purported Chinese curse; true origin unknown).
It appears that we have a few minutes between the end of the 2016 presidential campaign and the launch of the 2020 campaign to take stock of the election results and look ahead to 2017. It appears that 2017 will be the “interesting times” that will disrupt the status quo. During the Obama administration, a divided Congress deadlocked on most proposed legislation that would have made any major changes to employee rights and employer responsibilities. The big exception was the enactment of the Affordable Care Act (ACA) (“Obamacare”), which mandated that covered employers provide eligible employees with affordable health insurance benefits or pay a fine. Unable to push legislation through Congress, the Obama Administration shifted its focus to changing federal regulations, which do not require legislative approval. The best example of this shift is the changes to the Fair Labor Standards Act (FLSA) salary test, which would have made most employees earning less than $47,476 per year eligible for overtime pay.
Whenever there is a change in the political party controlling the White House, there are resulting shifts in administrative approach and philosophy. Through Cabinet and other appointments, a new President can alter the way existing laws are administered. For example, under the Obama administration the US Department of Labor significantly increased its emphasis on enforcement by adding investigators, refusing to negotiate liquidated damages assessments, and in some cases, seeking criminal sanctions. In contrast, the Bush administration’s focus was less enforcement oriented and more focused on educating employers. Presidential appointments to the National Labor Relations Board, Equal Employment Opportunity Commission, and Occupational Safety and Health Administration, as well as the Supreme Court, can all effect how existing laws are interpreted and enforced. For example, following the death of Justice Scalia, a 4-4 tie Supreme Court split in the Friedrichs v. California Teachers Association case has allowed public sector unions to continue to collect “agency fees” from bargaining unit members who decline to join a labor union. Should a similar case come back before the Court, as it likely will, a new conservative Justice could tip the balance, resulting in a decision that could seriously impact labor organization finances.
It seems likely that the incoming Trump administration will follow that same pattern. While no candidate has been announced, it can be assumed that Secretary of Labor Perez’ replacement will have a more pro-employer outlook. It seems likely that the next Labor Secretary will considering withdrawing the new FLSA salary test regulations, which were scheduled to go into effect on December 1, but which were enjoined by a federal court in late November. It is also likely that the Trump administration will seek to dismantle the most objectionable elements of the ACA, including the “Cadillac Tax” and mandatory coverage requirements. The fate of other ACA provisions that are intended to transform the health system from fee for service to a value-based model remains uncertain.
During the campaign, President-Elect Trump gave mixed signals with regard to increasing the minimum wage and so-called “family friendly” legislation, such as paid sick leave. It would be surprising if either gained traction in the new Congress. It is clear that the new Administration will support some form of enhanced immigration law enforcement. This is unlikely to have a significant impact in New Hampshire, which is estimated to have a small illegal immigrant population. With a State unemployment rate of 2.3% and an aging population, a lack of available workers, particularly in law enforcement, corrections, emergency services, and critical skills education, will present employers with a greater challenge.
With Republicans in the majority in the State Legislature and holding the Governor’s office, it is also unlikely that there will be an increase in minimum wage or expansion of employee protective legislation at the State level. However, shifts in Administration priorities for State agencies will take longer to implement, as Commissioners and agency directors serve set terms and can only be replaced when their terms expire or if they resign.
While these anticipated developments suggest less aggressive government enforcement of existing laws, it is important that employers continue to recognize the importance of remaining in compliance. Most federal and state employee protective legislation provides for both governmental enforcement and a private right of action, which allows individual employees to pursue claims through the court system. A change in administration at either the federal or state level has no immediate impact on trial courts. As a result, there is an increased likelihood that the volume of private action court claims will increase over the next few years. We live in interesting times.
Mark Broth is a member of the DrummondWoodsum’s Labor and Employment Group and his practice focuses on the representation of private and public employers in all aspects of the employer-employee relationship. This is not a legal document nor is it intended to serve as legal advice or a legal opinion. Drummond Woodsum & MacMahon, P.A. makes no representations that this is a complete or final description or procedure that would ensure legal compliance and does not intend that the reader should rely on it as such. “Copyright 2017 Drummond Woodsum. These materials may not be reproduced without prior written permission.”