No matter what side of the aisle you are on, 2017 is going to bring changes for businesses. Although we cannot exactly predict what will happen in the coming years, some thoughts and expectations can be determined by looking at campaign promises and trends.
Affordable Care Act:
Initially on the campaign trail, President-elect Trump vowed for a full repeal of the Affordable Care Act (ACA). In the days that have passed since his election, he has softened this stance. He, along with members of the House and Senate, recognize that a full repeal of the law would be difficult. One reason is that a full repeal, without a replacement plan, would leave approximately 20 million people without health insurance and would likely affect a possible run for re-election and the mid-term elections in two years.
Without a full repeal, there are a few areas of the ACA where we expect to see change:
- Partial repeal of key provisions (such as the individual/employer mandates and the “Cadillac Tax”), while retaining some more favorable provisions (such as the removal of pre-existing condition limitations, lifetime benefit limits, and dependent coverage to age 26)
- Changes to the Medicare and Medicaid programs
- Implementing new policies intended to expand coverage and lower health care costs
- Increasing limits for Health Savings Accounts
Paid Parental Leave:
Although President-elect Trump favors de-regulation in many areas, one area where he favors more regulation is in paid parental leave. During the campaign, he proposed six weeks of paid maternity leave financed through the unemployment system. This leave would apply only to women and not fathers or adoptive parents. While many states already have leave laws (paid and unpaid), this proposal would provide federal protections. While it’s unlikely that this proposal would pass in its current state, it’s likely that there will be some compromise law providing federal paid parental leave.
Fair Labor Standards Act:
On November 22, 2016, the U.S. District Court in Texas issued an emergency injunction which prevented the national implementation of the Department of Labor’s (DOL) Fair Labor Standards Act (FLSA) increase in the salary threshold that was set to take effect on December 1, 2016. The salary threshold level for full-time employees’ exemption from overtime pay was set to increase from $23,660 to $47,476. With this injunction, employers did not need to meet the $47,476 threshold on December 1, 2016. Current regulations to the FLSA will stay in effect until further guidelines are released. Although new regulations and an updated salary threshold could be released as early as Q1 of 2017, it is likely that there will be changes to the originally approved guidelines. The DOL has since filed an appeal and has requested that it be expedited. In the meantime, employers should consider the following:
- If you have already implemented salary changes to meet the new guidelines, Insight suggests maintaining these new salary levels to ensure employee morale and consistency.
- If you have not implemented new salaries to meet the guidelines, you can delay implementation at this time.
- Insight suggests continuing the work to review exempt and non-exempt status of all employees. Future changes to the salary threshold is likely so salaries should also be reviewed and leveled.
Immigration was a hot topic during the election and we’re likely to see immigration reform that will affect employers. It’s likely there will be an increase in the enforcement of immigration and work authorization through worksite enforcement. We’re also likely to see changes to employment-based visas, the process to obtain those visas (for example, changes to the prevailing wage system), and expanded use of the E-verify system to document authorization to work within the U.S.
Equal Opportunity Laws:
While President-elect Trump did not directly address Equal Employment Opportunity (EEO) laws on the campaign trail, it is likely that many of the Equal Employment Opportunity Commission’s (EEOC) recent efforts will come under attack by the new administration. The President-elect is likely to oppose the EEOC’s revised EEO-1 reporting requirements which will require employers to disclose pay data information in their annual EEO-1 reporting. Currently, this new requirement is scheduled to take effect with the 2017 EEO-1 reports, due in March 2017.
The new administration may also oppose some of the EEOC’s Strategic Enforcement Plan (SEP) for the 2017 – 2021 fiscal years. The current SEP highlights equal pay, and “issues related to complex employment relationships and structures in the 21st century workplace, focusing specifically on temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy.”
Additionally, there is currently no federal law that governs discrimination on the basis of sexual orientation and/or gender identity that is actionable sex discrimination under Title VII (a position that has been backed by some federal court decisions). It is likely that the trend toward relying on state and local government to take the lead on protections for sexual orientation and gender identity, including transgender bathroom protections, will continue.
National Labor Relations Board:
The National Labor Relations Board (NLRB) is the federal agency designated to protect the rights of employees. Currently, the board has two democrats and one republican with two open positions available. It is expected that President-elect Trump will fill the two open positions early in his administration with a potential third position to be filled later in the year. Typically, Presidents have appointed board members with a mix of party representation (President Obama appointed two democrats and one republican). It is expected that the new appointments will be “business-friendly” appointments, where the board has leaned more towards employees’ rights during the Obama administration.
With a more “business-friendly” direction, there may be diminished scope of employee’s Section 7 rights to “engage in protected concerted activity” such as the right to complain about and discuss terms and conditions of employment with co-workers.
Expected Trends for 2017:
- The integration of the multigenerational workforce will continue to be a hot topic. Millennials are gaining workplace responsibility with a third of millennials in managerial roles. A new generation, Generation Z, will also be entering the workforce creating a blended workforce that includes Baby Boomers all the way through Generation Z.
- We are likely to see an increase in a “Gig” workforce as freelance and outsourced roles are on the rise. There may be a softening of independent contractor laws to support this Gig economy.
- Companies will continue to move away from the annual performance review and move towards continuous performance feedback. In doing so, more employers will begin using an ongoing feedback system rather than a performance rating system that assigns a number to performance.
- Organizations will continue to focus on teams, rather than individual contributors. Collaboration is the key to success in the future. Performance management systems will be redesigned to value teamwork.
- Worksite wellness programs are on the rise and will become an important factor in attracting and retaining employees.
- Workplaces are becoming more casual in dress and less formal in physical set up. A more casual workplace lends itself to more collaboration and fewer silos within an organization.
- We expect to see more market-based pay where companies track pay against market and adjust base salaries if someone is falling off market and/or is a strong performer. Money saved from base salary increases is then used towards variable pay programs.
With so much uncertainty, the question becomes, what to do now? As you set your human resources agenda for 2017, continue to value your employees and put programs in place to attract and retain your top talent. In doing so, you will be set up to succeed no matter what the future brings!