President-elect Donald Trump has vowed to reverse many policies pushed during the Obama administration, and workplace rules may be a first place the new administration looks.
President Barack Obama and his administration made labor policy a major focus over the past eight years. Trump could upend many of the new workplace rules easily while others will likely face a lengthy process to roll them back.
“There are three areas her. One is the executive order area,” U.S. Chamber of Commerce Senior Vice President Randel Johnson told InsideSources. “The others are issues that went through traditional rule making that are independent of executive orders. And then there’s policies being set by the National Labor Relations Board (NLRB) through case law.”
Trump could end a previous executive order simply by issuing one of his own. But policies that went through a regulatory or legislative process face more steps. These policy changes could focus on rules for overtime, worker benefits, paid sick leave, federal contracting, and union elections.
“Executive orders and guidance can be rescinded fairly immediately,” Competitive Enterprise Institute labor policy expert Trey Kovacs told InsideSources. “Regulations like the overtime rule will take a little bit more time. You either need to defund it, pass legislation, or issue a new rule that would modify the Obama administration’s.”
The current administration achieved many of its policy goals through executive orders. The Fair Pay and Safe Workplaces order, also called the blacklisting rule, is one that has faced a lot of opposition from business groups and some lawmakers. A federal contractor could be blocked from receiving a new contract if they are accused of labor violations.
“With the stroke of a pen, president-elect Donald Trump could withdraw that executive order or other misguided executive orders,” said Kovacs.
Federal contractors face being blacklisted even if the labor violation is just an accusation. A labor union could potentially force a contractor to settle any issue by accusing them of multiple labor violations. They often don’t need to prove allegations because the contractors are put at risk of being blacklisted on that alone.
“They define violations as including very preliminary indications of an investigation,” Johnson said. “That’s probably a top priority and that’s the one that has an injunction now in one of the district courts in Texas.”
The Obama administration also did a lot to push new benefits for the employees of federal contractors. The Department of Labor issued a new rule Sept. 30 that increases paid sick leave to seven days for those workers. Trump would have to issue a new regulation or seek congressional action to scrap the rule, which will take time.
“The issue there is not the fact that it requires federal contractors to provide seven days of paid leave,” Johnson said. “Most of these contractors already do that. It requires them to do it a certain way that doesn’t necessarily fit their HR systems that they already established.”
New regulations must be formally proposed and go through a review process before they can overturn the previous regulation. The process could take months or even years. Congressional action would also take time.
Another major change from the current administration came when the NLRB issued a regulation that shortens the amount of time union elections are conducted. The agency argued it was to streamline the process, while critics contest it allows unions to organize a workplace before employees really have the chance to understand everything.
“That’s an administrative regulation that determines how quickly union elections are run and that we opposed,” Johnson said. “[It] prevents employers from being able to educate their employees about the downsides of unionization.”
The new policies impact a significant portion of the national workforce. Many of the new policies were designed to extend new rights and privileges to employees, but now those might be taken away. Johnson contests the bulk of the new policies have had more of an impact on employers.
“Virtually all of them relate to the relationship between employers and government more than they relate to the relationship between employers and employees,” Johnson said. “I think the left is going to have a hard time arguing that repealing the vast majority of these is going to reverberate badly for employees.”
Johnson adds that the overtime rule is really the only significant example where employees could be impacted. The rule will expand overtime privileges to an additional 4.2 million workers by raising the salary exemption threshold of exempt positions like managers. It is scheduled to go into effect Dec. 1.
“One of the obvious one’s is the change in overtime standards,” said Dean Baker of the Center for Economic and Policy Research. “It was highly controversial, a lot of businesses complained about it. They did their best to block it. I have to imagine that’s something that’s going to be very much in Trump’s sight.”
Those in support of the changes argue that employers have taken advantage of the exemption. They state that employers name their employees as managers so they are exempt from overtime. Thus the millions of new eligible workers might just be getting the overtime they deserve.
“Basically companies were taking advantage of that provision,” Baker said. “By having such a low cutoff, one that hasn’t been adjusted for inflation, you’re giving these companies the opportunity to evade the overtime rules.”
The White House has argued the updated rule will help restore overtime privileges that have dwindled significantly over the decades. The Economic Policy Institute (EPI) found that repealing the overtime rule would increase inequality, lower incomes and increase the hours of almost a million workers.
“The only clear beneficiaries of repeal would be business owners and shareholders, who would see higher profits from reduced payroll costs,” EPI said in an email statement provided to InsideSources. “It makes no sense to reverse the rule and take those raises away from hard-working employees.”
The NLRB has also been a significant source of new rules during the current administration. The board has changed contracting in ways that could radically alter how business models like franchises operate by expanding what’s known as the joint-employer standard.
“The NLRB decision that expanded the joint-employer liabilities standard should be something where Congress acts swiftly to pass legislation to return to the previous direct and immediate controlled standard,” Kovacs said.
The NLRB rule can make an employer responsible for the employees and labor liabilities of subcontractors and franchises. The old joint-employer standard used to be determined based on whether the company had direct control over the employees of the other. The new standard looks at indirect control, which critics argue is way too vague.
“What you saw out of the Department of Labor and the National Labor Relations Board was really unfairly tilting the playing field in favor of unions over workers and employers,” Kovacs said. “I think you need to get back to having certainty and fairness in our labor employment laws and not just benefiting one party in the workplace.”
The NLRB consists of a five-person board usually split between Republicans and Democrats. The president gets to nominate the deciding vote. NLRB rulings could be reversed through further case precedent or through congressional action but both those routes involve lengthy processes.
