The election of Donald Trump and his subsequent Cabinet selections have caused a seemingly unprecedented uproar in the United States.
Unlike any transition of power in our lifetimes, the new administration will lead to a radically new day for many across the country by altering the direction of a slew of laws and regulations. Setting aside any personal misgivings you might have for our new president, however, those practicing in the labor and employment law arena have every reason to celebrate the shift in power. That’s because one of President-elect Trump’s most recent Cabinet selections could turn out to be the perfect ally for the modern American employer.
Ask any employer which regulatory agency has the greatest power to shape the day to day operations with their employees, and they’ll probably answer: the Department of Labor. Given the DOL’s importance, employers want to know what President-elect Donald Trump’s Secretary of Labor nominee, Andrew Puzder, means for their future. As a chief executive, frequent media commentator, and senior policy advisor to the Trump campaign, Puzder gives employers a wealth of information to surmise what the future may hold under his direction – and all signs point to a positive outlook.
For the past 15 years, Puzder has been the CEO of CKE Restaurants, the parent company of Carl’s, Jr., Hardee’s and Green Burrito quick-service restaurant brands. In most instances, employers can count on Puzder to favor management over labor. However, he also shows a pragmatic streak when it comes to balancing the interests of workers and employers, including his stance on immigrant labor in the workplace that reflects the modern reality of running a business.
Most employers are in limbo wondering whether an appeals court will resurrect the USDOL overtime rule that was recently blocked by a federal court judge. But taking a longer-term view, many also wonder about the future of the rule once Trump takes office and Puzder heads the Labor Department.
While it is difficult to gauge how Trump feels about the overtime rule, Puzder’s feelings on the matter are very clear: he is not a fan. He has publically predicted that it would “not deliver as promised,” and was an ill-conceived effort by the government to regulate its way to economic prosperity. He has gone on record to say that it would not be helpful to turn management positions into hourly jobs where employees are compensated for “time spent rather than time well spent,” which is a pretty good indication that he will want to scrap or substantially rework the rule once in charge – assuming it is resurrected by an appeals court in the near future.
Another area where Puzder has signaled his position is with respect to federal minimum wage. He has plainly stated that “raising the minimum wage is not the best solution” to solving the economic woes of the middle class. If Puzder’s position on the matter has any influence on Congress, employers can expect that any increase to the federal minimum wage of $7.25 will be slow, measured, and cautious.
His selection to the top post in the Labor Department can’t be seen as a positive to those in the ‘Fight for $15’ movement and others who want to see a quick and dramatic increase to the federal minimum wage. In that same interview, Puzder advocated for a tiered system that retained a lower federal minimum wage for entry-level workers, while raising the standard federal minimum wage to about $9 per hour.
Of course, many states and local jurisdictions require businesses to pay their workers at a rate higher than the federal minimum wage, so we could expect to see any resistance on the federal level met with further localized increases.
Secretary of Labor Puzder will also be charged with reviewing a number of standards and directives that were issued by the Occupational Safety and Health Administration (OSHA) over the last eight years. First and foremost, the agency’s Recordkeeping and Reporting of Occupational Injuries and Illnesses rule, effective December 1, has caused much concern and confusion among employers.
It now requires electronic reporting of many injuries and illnesses, with public posting of this information on OSHA’s website. Further, it ramps up retaliation rules, and under current agency interpretation, bans mandatory post-accident drug testing. Under Puzder, it could be significantly rolled back.
Another recent change impacting employers has been the increase in OSHA penalties. In 2016, the agency increased their fines by approximately 78%. There is a continuing provision in the budget bill which allows OSHA to update or increase the penalty amounts each year based on the cost of living. The Trump administration could ask Congress to revoke that provision and perhaps reduce the current penalty amounts.
Finally, while most employers are aware of the involvement of the federal government in workplace immigration matters, not all are aware of the fact that the USDOL plays a role in enforcing federal immigration policy. This is one area where Puzder and Trump have not seen eye-to-eye.
Whereas Trump has stated that immigrant workers have a depressing effect on native-born workers’ wages, Puzder has stated that he believes they are a crucial element in the American economic system, especially given the aging workforce. In July, Puzder coauthored a Wall Street Journal op-ed where he said, “Legal immigrants are an asset to the country.” He criticized Trump’s plan to deport up to 11 million people as “unworkable” and called for Trump to revisit his proposal.
The USDOL is involved in the H-1B process – and it is worth noting that the President-elect has given mixed signals about his position on whether to limit American job opportunities for skilled foreign workers. The USDOL handles the Labor Condition Application (LCA) step, which is a prerequisite to the filing of the H-1B with the USCIS. Under Puzder, it is unclear whether the USDOL will start ramping up on H-1B Wage and Hour Division investigations to ensure that the terms and conditions of the LCA are being complied with, although that is an action that the department could take.
Also, with respect to green card cases, the USDOL handles the PERM/Labor Certification process, which is the first step in most of the employment based green card cases. There has been talk about modernizing the process for years, and Puzder could influence the steps involved in recruiting U.S. workers and what hoops an employer needs to go through to get the PERM approved.
While the USDOL could also start auditing a greater percentage of the cases, causing delays in getting approval and leading to more denials – and expense – for employers, it is unclear whether Puzder’s pragmatic approach will carry the day over Trump’s more aggressive attitude on the subject.
It is not uncommon to see the workplace law pendulum swing back and forth when one president replaces another in the White House, especially when the transition includes a change in political party. These swings often take time to develop, and at times are moderate in scope and immediate impact.
But the election of Donald Trump means that we can throw the regular playbook out the window. It seems likely that, under Trump and Puzder’s tenure, we will see a full-scale transformation of labor and employment law in short order, which should be music to the ears of employers across the country.