In his first State of the Union Address, President Trump made the case for his first year in office as one of extraordinary legislative and regulatory accomplishments as part of his Administration’s efforts to build a “Safe, Strong, and Proud America.” In fact, 2017 was not a year of major legislative accomplishments, with the exception of the reforms to the tax code, but there were some changes in the labor and employment arena of importance to employers.
In 2017, the Trump administration’s revamped Department of Labor (DOL) rolled back many Obama-era regulations. For example, the DOL reversed three major Obama-era administrative interpretations of the Fair Labor Standards Act (FLSA) in 2017 involving the definition of independent contractors, the determination of a joint employment relationship, and the application of the salary basis test and overtime rule, which would have narrowed the scope of employees exempt from overtime regulations. U.S. Secretary of Labor Alexander Acosta issued the following statement after President Trump’s State of the Union address: “The Department of Labor continues to advance the President’s common sense economic agenda, including growing apprenticeships, expanding access to healthcare, and strengthening the nation’s infrastructure. The American workforce is the greatest in the world, and this Administration will continue to support the creation of good, family-sustaining jobs.”
President Trump also filled several EEOC vacancies in 2017. The Republican-majority EEOC is expected to be more business-friendly. Although there were no major changes to EEOC initiatives in 2017, we expect to see the Commission revisit EEO-1 reporting requirements (including data points aimed at ferreting out gender-based pay disparity) that were scheduled to be implemented on March 31, 2018 but were stayed on August 29, 2017. Further, unless the Supreme Court resolves a current Circuit split on the application of Title VII to sexual orientation discrimination, an anticipated rollback of the Obama-era Commission’s interpretation of Title VII as preventing discrimination based on sexual orientation and gender identity.
The NLRB is also expected to continue its pro-business streak, which kicked off in December 2017 when the Board reversed Obama-era rules on the determination of joint employer status and reinstated an earlier test limiting joint employment to companies that exercise direct control over workers. Currently pending before the Supreme Court is Ernst & Young LLP v. Morris, which considers whether the National Labor Relations Act (NLRA) conflicts with the Federal Arbitration Act (FAA) and thus bars employers from requiring employees to arbitrate their claims on an individual, rather than collective, basis. If the Supreme Court finds no conflict between the NLRA and FAA, the Obama-era Board’s hostility toward class and collective action waivers in arbitration agreements may be behind us.
President Trump has pledged to advance the cause for immigration reform. He is asking Congress to adopt limitations on immigration (including so-called “chain migration”); while Democrats are demanding legislation to extend and authorize the Deferred Action for Childhood Arrivals (DACA) program and to guarantee other rights to undocumented immigrants. Immigration will continue to be a hot button for this administration.
As the Trump administration looks to its second year, employers can expect to see continued pro-business appointments to vacant agency positions and employer-friendly policy statements and legislation. We will continue to keep you apprised of any new legislative or policy changes.