Forecasting the 2016 Elections’ Effects on WFM

by | Nov 13, 2016

As the dust settles on the divisive, dramatic and seemingly-endless 2016 U.S. elections, America – and to a large extent, the rest of the world – finds themselves asking, “What’s next?” While I am not qualified to tackle the bigger questions like the Constitution or foreign policy, I can forecast what the election means for workforce management, which gets us into topics like jobs, wages, entitlements, workers’ rights and productivity.

Any discussion of the elections has to start with President-Elect Donald Trump who stunned the establishment with his victory over Hillary Clinton. Throughout his campaign, Trump painted a bleak picture of U.S. economy, the American workforce, and the regulatory burdens on businesses, but unlike his opponent, he did not propose any definitive policies.  While his campaign published its position on key issues such as the economy, healthcare, taxes, trade and regulations, he purposely avoided setting an agenda until after the election.

Yesterday, we started to get some idea of his priorities.  During his first post-election meetings with Republican leaders in Congress, he said, “We’re going to look very strongly at healthcare, and we’re looking at jobs — big league jobs.”

Starting with jobs, Trump promised to create 25 million jobs during his campaign. If he delivers on that promise, those of us in the WFM industry will be busier than ever with hiring, scheduling, paying, tracking accruals and training workers as payrolls expand.  Of course, this will not happen overnight and there are questions whether we have enough workers to support such growth.

His second priority is healthcare. Trump’s official position on the Affordable Care Act states, “On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare.” Big questions linger: What will it be replaced with, how fast will this really happen and can it be repealed at all?  Confusing matters further, Trump told the Wall Street Journal on Friday that he may keep parts of the ACA.

Much of the discussion in the media has centered on the impact of repealing the ACA on individuals and families, and while that is muddy, it is even less clear about its impact on employers.  Will employers still be required to provide insurance to full-time employees?  What reporting requirements will exist, if any?

The media has centered its coverage on the impact of repealing the ACA on individuals and families as millions of people stand to lose insurance if Obamacare repealed. But, what about the impact on employers?  How will the employer mandate change? Will employers still be required to provide insurance to full-time employees?  Will the definition of full-time employment change? What reporting requirements will exist, if any?

Things are murkier with the new overtime legislation, which raises the threshold under which salaried employees would be eligible for overtime. While the Republicans have been largely against the new overtime rule and Democrats have been largely for it, Trump’s position has been less clear.

In August, Trump told the website Circa, “Rolling back the overtime regulation is just one example of the many regulations that need to be addressed to do that. We would love to see a delay or a carve-out of sorts for our small business owners.”  The new overtime law is scheduled to go into effect on December 1, 2016, a month and a half before Inauguration Day.  It seems unlikely that President-Elect Trump will take this benefit from American workers, but it is possible that we will see further tweaks to its eligibility.

The President Elect’s position on Federal minimum wage is fuzzy, too.  Trump’s been on all sides of the issue. Most recently, Trump told Fox News’ Bill O’Reilly that he backed raising the $10 per hour federal minimum wage, recognizing that states will likely raise their minimum wage higher.  Four states voted to raise their minimum wage in the 2016 elections and others increases planned for 2017 but will the Trump Administration act on a Federal increase to minimum wage?  It seems unlikely to happen quickly.

Beyond minimum wage, Trump has been largely silent on wage-and-hour and other workers’-rights issues.  Since 2000, wage-and-hour litigation has increased dramatically and has reached an all-time high under the Obama Administration. It is not difficult to predict that the President Elect will support pro-business initiatives and less regulation than his predecessor.  While that will not necessarily reduce the amount of wage-and-hour litigation, it will logically result in the Department of Labor scaling back the Wage and Hour division which grew under Obama.

The nation has seen a dramatic uptick in workers’-rights groups advocating for paid family leave, paid sick leave, fair scheduling and other benefits.  The Obama Administration could not make headway on these issues at a national-level due to the Republican-controlled Congress and we saw states and municipalities drive local laws on these topics. We should not expect any progress on these issues during the Trump Administration, whether it wants to or not. Therefore, we can expect drive more states and municipalities to enact local laws, making administration of schedules, time and benefits more complex.

Ultimately, the results of this election mean that change is coming.  Nothing will happen until after Trump’s inauguration on January 20, 2017, and even then, things will likely happen slowly. However, as WFM professionals, we need to be nimble and prepared to respond to what will undoubtedly be more complex compliance and labor environment over the next four years.

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