What Another Trump Administration Means for HR in the US

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Author: US Brightmine editorial team

The election is over. Votes have been cast and ballots have been tallied. Now that the political campaign is over the hard work of governance begins. The election of former President Donald Trump as the 47th US President will have a significant impact on issues affecting employers. HR should be aware of the following key areas and plan for them.

Equal Employment Issues

Pay Transparency and Discrimination

In a Trump administration, EEO-1 Component 2 pay data reporting is unlikely to be revived at the federal level, and states will likely continue to be the primary drivers of pay transparency requirements. The Equal Employment Opportunity Commission (EEOC) may also back away from some of its recent interpretations of antidiscrimination law as it applies to sexual orientation, gender identity and reproductive decision-making. A less aggressive enforcement stance is likely at the federal level, with more emphasis on mediation and other forms of dispute resolution.

Even anticipating a second Trump administration's reduced focus on enforcement, prudent employers should prioritize analyzing pay equity in their workforce and acting on the results. These steps will help employers avoid pay discrimination claims and prepare for a continued push for pay equity and transparency at the state level where such efforts are likely to continue regardless of the presidential election result. In addition, these proactive measures will help avoid employee attrition and costly litigation that can result from a workplace with entrenched disparities.

Disabilities/ADA

There was no mention of disability in the 2024 GOP Platform document. Trump's public comments regarding disability have generally been focused on real or perceived opponents (including, most recently, Vice President Harris) and have been pejorative in nature.  In general, employers should expect rollbacks of relevant regulations and executive orders.

As it is difficult to predict what will happen in this area under a Trump/Vance administration, the best course of action is to stay informed about the administration's positions in this area, which may continue to develop.

Employee Leaves

The Trump campaign did not take a stance on paid family and medical leave, paid sick leave or other leave requirements and these issues are not mentioned in the official GOP platform. Based on the absence of such information, it is not likely that the Trump White House will focus on federal leave laws.

With no new federal paid family leave, paid sick leave or other paid leave laws on the horizon, employers can expect states and localities to continue enacting their own leave laws. States with Democratic majorities may amp up leave law activity if there is no expectation that federal leave laws will take effect. More specifically, left-leaning legislatures may enact leave laws to address individual rights that the Trump Campaign has indicated are not a priority, including paid family and medical leave, paid sick leave and leave related to reproductive health care or domestic violence.

Wage and Hour

Employers can expect to see a significantly more employer-friendly approach to wage and hour law under the second Trump administration on several fronts, including overtime, enforcement and independent contractor classification.

It's unlikely that the Trump administration will seek to roll back the $844 per week salary increase for overtime-exempt employees that took effect July 1. However, a repeal of the tri-annual inflation adjustments currently set to take effect starting in 2027 is almost certain.

A Trump also administration would likely repeal the FLSA independent contractor rule enacted earlier this year and restore Trump's own independent contractor rule that his administration promulgated in 2020. Employers may wish to revisit the 2020 rule to see if any workers currently classified as employees might be reclassified as independent contractors under a more relaxed FLSA standard; of course, employers simultaneously should consider any relevant independent contractor tests under common law, the federal tax code, other federal laws and miscellaneous state laws.

Payroll

Tax Exemption for Tip Income

Trump campaigned on a proposal to exempt tips from income and employment taxes to boost the income of lower-paid Americans who receive a large share of their income from voluntary tips (approximately 2.5% of the US workforce), while retaining the income tax on wages.

If Congress passes Trump's proposal, employers should be prepared for a potential dramatic increase in employees wanting to change their status from full-wage jobs to tip-based jobs. On the other hand, employers may see it as an opportunity to pay lower wages and have employees receive tips to make up the difference.

However, Congress may have to act to restrict the tax exemption to taxpayers below a certain income threshold or only to tip income received in traditionally tipped occupations and cap the amount of tip income that could be exempt. Otherwise, without limitations, businesses in other types of service industries could potentially try to exploit the exemption or illegally attempt to recharacterize income.

Tax exemption for Overtime Pay

Trump also proposed a tax exemption for overtime pay, but from which taxes (income and/or payroll) is unclear. Employers would likely see a resulting increase in nonexempt employees taking on or requesting more overtime hours, which would increase payroll costs. In addition, employers would have the potential burden of an increase in reclassifications of employees from exempt to nonexempt status, and more complicated tracking and reporting of more overtime hours worked.

Employers may need to respond by curtailing increased overtime requests. The Trump campaign said they would incorporate measures to limit these behavioral effects but have not provided details.

Trump has said he would eliminate all taxes on Social Security benefits. Currently, up to 85% of benefits are taxed for single filers earning more than $34k per year and joint filers earning more than $44k per year. (Below these thresholds, a smaller percentage of benefits is taxed, or not taxed at all.) However, not taxing Social Security benefits would deplete the Social Security trust fund faster than already projected, since a portion of these taxes goes into the trust fund. To prevent that from happening, Social Security tax rates would have to be increased, which would require changes in withholding.

Tax Cuts and Jobs Act (TCJA) Expiring Provisions

The Tax Cuts and Jobs Act (TCJA) of 2017 was a sweeping Trump tax reform law in his first term that affected many key payroll and fringe benefit provisions, many relating to business expenses. It also implemented the paid FMLA employer tax credit, eliminated the personal exemption (which functioned as the annual withholding allowance amount on Form W-4), and cut certain federal income tax withholding rates. Many of these provisions are set to expire at the end of 2025. Trump is expected to either extend them or make them permanent, in which case employers would continue with the current taxation status quo. Trump has not, however, detailed how these extensions would be paid for.

Workplace Safety and Security

Under a second Trump administration, employers can expect to see the delay or abandonment of pending workplace safety and security legislation initiated under the Biden administration, particularly the Occupational Health and Safety Administration's (OSHA's) proposed heat illness standard and the planned proposal of a national workplace violence prevention standard for the health care industry. Additionally, the Trump administration will likely begin efforts to rescind controversial rules put in place by the last administration, particularly the so-called "Worker Walkaround Rule" that permitted employees to designate a non-employee third-party as their representative during an OSHA inspection.

Regarding enforcement, employers will likely see a retreat from the more vigorous efforts of the Biden administration and may see a shift in its established National Emphasis Programs (NEPs), temporary programs that focus resources on particular hazards and high-hazard industries. In particular, employers may see the abandonment of the COVID-19 and heat-related hazard NEPs.

To prepare for OSHA's rulemaking and enforcement goals under a second Trump administration, employers should ensure continued compliance with all safety and security regulations applicable to their organizations and adopt a wait-and-see approach as to whether certain requirements will be rolled back.

At the state level, employers may see more of a mixed bag, with occupational health and safety agencies in more conservative state plan states following federal OSHA's lead and agencies in more liberal state plan states maintaining more stringent standards.

Immigration

Regardless of the outcome of the presidential election, most fundamental aspects of the US immigration system are statutory and significant immigration reform would require an act of Congress. Nevertheless, the Trump administration has the power to shape the rulemaking and enforcement efforts of agencies like the Department of Homeland Security (DHS).

In a second Trump administration, immigration policy will generally become more restrictive, which will translate to increased immigration-related enforcement and deportation initiatives. Employers can expect a return to policies from the first administration, including an expanded travel ban, reintroduction of de novo review of extension applications for existing grants of immigration benefits and limiting DHS grants of employment authorizations. Additionally, the US Department of State (DOS), which is responsible for issuing visas, will likely see its budget reduced, as happened during the first Trump Administration. This will result in longer waits for visa appointments and slower visa application adjudications.

Further, Trump has expressed his intention to:

  • Prioritize merit-based immigration;
  • Increase penalties for illegal entry and overstaying visas;
  • Strengthen US Immigration and Customs Enforcement (ICE); and
  • Ban companies that outsource jobs from doing business with the federal government.
  • Finally, it is likely that a second Trump presidency will see the elimination of the Keeping Families Together Program and Deferred Action for Childhood Arrivals (DACA) protections.

To prepare for the immigration-related changes under the second Trump Administration, employers should reevaluate their workforce planning for the next several years, as the new policies may impact jobs employers were planning to outsource and will cause employees with certain work authorization documents to face additional obstacles to acquisition or renewal, as well as longer processing times.

To prepare for more frequent worksite raids and Form I-9- related enforcement actions, employers should also consider conducting a Form I-9 self-audit to ensure their records and processes are compliant.

Additionally, US employers of nationals from countries facing a travel ban should prepare contingency plans for such employees if they become stranded outside of the United States, as happened during the first Trump Administration.

Labor Relations

Trump campaigned on supporting workers but made clear that does not translate to support for unions. His second administration will move to reverse many of the changes put in place by the National Labor Relations Board (NLRB) and General Counsel Jennifer Abruzzo, such as union-friendly rules that:

  • Shortened the union election process;
  • Made it easier to invalidate workplace rules;
  • Imposed stricter independent contractor criteria; and
  • Expanded the definition of protected concerted activity under the National Labor Relations Act.

Although changes must be made through the NLRB, Trump will be able to quickly place his stamp on the five-member Board. There is currently one vacancy and Chairman Lauren McFerran's term expires in December 2024, allowing Trump to make two appointments to join Member Marvin Kaplin in a Republican majority. In addition, Abruzzo's term ends July 2025, just six months into his term. However, it is possible that Trump might follow the precedent set by the Biden administration and remove her from office through a forced resignation or firing.

However, even with a Trump-appointed NLRB majority and General Counsel, changes to rules and decisions more favorable to employers will take time to move through the process and unions continue to actively and successfully organize at an increased rate. Employers should stay alert for signs of organizing in the workplace. At the same time, they should focus on creating a positive work environment with open communication that addresses employees' concerns to minimize the need for employees to seek union help.

Noncompete Agreements

The Federal Trade Commission's (FTC's) proposed noncompete rule has been halted by the courts, and a Trump administration is certain to pull the plug the Commission's appeal to overturn the national injunction and implement the rule. However, although federal regulation of noncompetes will likely remain off the table, states continue to enforce their current laws restricting the use of such clauses in employment contracts and to enact new restrictions - or in some cases ban the use of noncompete agreements entirely. In addition, state legislatures are expected to continue passing laws limiting the use of confidentiality (nondisclosure) agreements.

Reproductive Health Benefits

While Trump has suggested he would not permit a nationwide abortion ban, his frequent statement that "I did it, and I'm proud to have done it," regarding the overturning of Roe v. Wade suggests otherwise. At the same time, the 2024 GOP Platform supports policies that advance prenatal care, access to birth control and in vitro fertilization (IVF) treatments. While adopting a wait-and-see approach, employers should also closely review current policies that may touch on reproductive issues, paying close attention to benefits and leave policies that could be construed as related to abortion.

Data Privacy

There is no mention of privacy in the 2024 GOP Platform document and very little information elsewhere to determine what a Trump-Vance administration might look like on data privacy issues.  In general, Trump has been supportive of less regulation in the tech sector, and several tech companies came out in support of Trump, presumably for that reason.  It stands to reason that a Trump-Vance administration likely will not look to increase regulation of or protections for consumer or employee data privacy. Employers should continue to monitor developments.

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