Trump’s Ideas for Change in the Workplace

By Allen Smith, J.D. Nov 9, 2016
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Now that Donald Trump has been elected president, the electorate is taking a closer look at his priorities. For HR professionals, his positions on issues affecting the workplace are of particular interest. In some cases, he is calling for less regulation; in other situations, he calls for more. And his proposals aren't without some controversy.

Trump has promised to:

  • Reform regulations and reduce taxes.
  • Attack the trade deficit.
  • Repeal the Affordable Care Act (ACA).
  • Support up to six weeks of paid maternity leave and encourage employers to provide child care at work.
  • Push for nationwide E-Verify.
  • Call for an increase in the prevailing wage for H-1B visas.
  • Favor a small-business exemption from the overtime rule.

Regulatory and Tax Reform

Trump wants regulatory reform and would seek a temporary pause on new regulations and a review of old rules to see which should be scrapped. He would require each federal agency to prepare a list of all of the regulations it imposes on businesses and rank them from most critical to health and safety to least critical. Least critical regulations would be ripe for repeal.

The regulatory reform proposal has its critics.

Donald Trump
U.S. Presidential Election Coverage

For more information about Donald Trump's workplace policies and how they effect HR professionals, check out the SHRM resources provided below:

· SHRM's post-election coverage
· Trump's work policies · First 100 days

"Trump's ideas on regulatory reform are poorly thought out," said Ross Eisenbrey, vice president of the Economic Policy Institute, a Washington, D.C., nonpartisan think tank. "Trump would delay Dodd-Frank rules that were ordered by Congress five years ago and which are important for reining in a destructive, sometimes predatory industry. The Dodd-Frank rules, like many others, have been delayed far too long already."

However, Diana Furchtgott-Roth, director of Economics21 at the Manhattan Institute, a think tank on economic growth, health care and legal reform in New York City, said, "Regulatory review is already the law for many federal agencies but routinely ignored. Enforcing existing law would reduce the costs of doing business in the United States and increase growth and job creation."

Speaking Sept. 15 to the New York Economic Club, which seeks to bring businesspeople and professionals together for the discussion of economic issues, Trump said, "In 2015 alone, federal agencies issued over 3,300 final rules and regulations, up from 2,400 the prior year. Every year, overregulation costs our economy $2 trillion."

Trump also plans to lower the tax rate on businesses from 35 percent to 15 percent. "An explosion of new business and new jobs will be created. It will be amazing to watch," he said. "We will also allow U.S.-based manufacturers to fully expense the cost of new plants and equipment."

Trade Deficit

Trump will seek to tackle the trade deficit—now nearly $800 billion a year—by:

  • Renegotiating the North American Free Trade Agreement "into a deal that will either be good for us or will be terminated until a brand-new and productive deal can be signed," Trump said.
  • Keeping out of the Trans-Pacific Partnership.
  • Labeling China a currency manipulator and applying tariffs to any country that devalues its currency to gain an unfair advantage over the United States.
  • Improving protection of the United States' intellectual property in China.

Repeal of ACA

Trump has promised that on day one of his administration he would ask Congress to immediately deliver a full repeal of the ACA, including the individual mandate.

In addition, Trump has called for:

  • Modification of existing law that inhibits the sale of health insurance across state lines.
  • Full deduction of health insurance premium payments from individuals' tax returns.
  • Price transparency from all health care providers.

"The ACA is unsustainable," Furchtgott-Roth said. "Premiums are rising by 25 percent to 40 percent, and insurance companies are dropping out. Americans would welcome change."

However, there are many supporters of the law, particularly in the Senate.

"The ACA has now been in effect for six years," noted Chatrane Birbal, Society for Human Resource Management (SHRM) senior advisor, government relations. "Full repeal of the ACA is likely to be challenging." She added, "SHRM has long advocated that employer-sponsored health benefits are critical to recruiting and retaining a talented workforce, so any health care reform legislation must support employer flexibility and innovative strategies and preserve the favorable tax treatment of employer-sponsored coverage."

As for encouraging health insurance competition across state lines, "There may be modest gains in competition, but this reform would almost certainly weaken state regulatory authority over insurers in their state," said Gary Burtless, a senior fellow in economic studies with the Brookings Institution in Washington, D.C. "Therefore, the reform would have to be combined with a considerable increase in federal regulation over many aspects of the insurance plan" offered across state boundaries.

Maternity Leave and Child Care

While Trump is calling for much deregulation, he supports more regulation in a few areas. On Sept. 13, he unveiled his plan to enhance unemployment insurance (UI) to include six weeks of paid maternity leave. The program would be similar to one in California.

Providing a temporary unemployment benefit through the UI system "would cost $2.5 billion annually at an average benefit of $300 per week. This cost could be offset through changes in the existing UI system, such as by reducing the $5.6 billion per year in improper payments," according to a Trump fact sheet.

"The Trump plan does not appear to include new fathers, and it would not extend to other forms of leave covered by the FMLA [Family and Medical Leave Act]," noted Christine Owens, executive director of the National Employment Law Project (NELP) Action Fund in New York City. NELP is an advocacy organization for the employment rights of lower-wage workers. "The unemployment insurance program has never been less ready to take on the administration and financing of a new program," she said, adding that Trump's claims of fraud in the UI system to pay for the new program are "exaggerated."

Leaving out men from paid leave "is terrible for women and business," said Josh Levs, author of All In—How Our Work-First Culture Fails Families and Businesses (HarperOne, 2015). He stated that "making it available only to women takes choices away from women and away from families."

[SHRM members-only toolkit: Managing Family and Medical Leave]

Trump also is calling for increased incentives for employers to provide child care at work. In 2001, a law was enacted that gives licensed onsite child care centers a tax credit of up to 25 percent of facility expenditures, plus 10 percent of resource and referral costs, up to a limit of $150,000 per calendar year. Trump wants to raise the cap.

In addition, "Families will be able to fully deduct the average cost of child care from their taxes, including stay-at-home parents," Trump told the New York Economic Club. "Parents will also be able to enroll in tax-free dependent care savings accounts for their children or elderly relatives. Low-income households will benefit from both an Expanded Earned Income Tax Credit—in the form of a child care rebate—and a matching $500 contribution for their savings accounts."

The new deductions will disproportionately favor the rich, according to The New York Times, which said, "Low-income families gain little or nothing from a tax deduction, because they pay little or nothing in income tax."

E-Verify

While Trump's position on building a wall at the border of the United States and Mexico is common knowledge, his stance on workforce enforcement of immigration laws is less well-known. Trump supports nationwide use of the employment eligibility verification system known as E-Verify by all employers, a stance that resembles the federal government's mandate that federal contractors use that system, Birbal noted. "In addition, there are approximately 22 states and localities that require the use of either E-Verify or a specified alternative for some or all employers," she said.

[SHRM members-only toolkit: Complying with I-9 Requirements and E-Verify]

More than 600,000 employers now use E-Verify, according to the U.S. Citizenship and Immigration Services website. "Given that Congress has reauthorized the E-Verify program for years, the established mandated requirements for federal contractors, various state requirements and the nationwide use by [some] employers, it is conceivable that a mandatory E-Verify program will garner support in the next Congress," she stated.

Increase in Prevailing Wage for H-1B Visas

Trump also has called for an increase in the prevailing wage for H-1B visas—visas for positions requiring specialized knowledge—in one of his fact sheets. In addition, he favors a requirement to hire American workers first, before making visas available, by sending ads for workers to unemployment offices.

[SHRM members-only toolkit: Obtaining U.S. Employment Visas]

"The ideas to require the hiring of American workers first and to increase the prevailing wage for H-1B are both good ideas and would go a long way to fix what's wrong with H-1B," said Daniel Costa, director of immigration law and policy research with the Economic Policy Institute. However, he added, "Trump has been on both sides of the H-1B issue, and multiple times on each side. I don't know where he stands right now on H-1B—depends on which day you ask."

"These ideas are likely to garner support next Congress," predicted Rebecca Peters, director of government affairs at the Council for Global Immigration, an affiliate of SHRM. "Bipartisan support already exists for increasing requirements on sponsoring employers when it comes to H-1B visas. The outlook is one that will be challenging for employers that need more visas to access professionals," particularly in the science, technology, engineering and mathematics fields.

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