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Donald Trump Wins. What Are the Implications for Compensation?

It’s official: Donald Trump is the new president.

As we prepare for Trump to enter Office mid-January, what changes might his administration bring? Will he honor the former administration’s bold moves around EEO reporting, contractor rules, minimum wage, FLSA, and equal pay laws? Or will it be a brand new day in comp? It’s safe to say in the past decade, pay and politics have never been more tightly linked. As such, each new President is a game changer. How will Trump’s office impact compensation as we know it?

Deregulate at the federal level, give more power to the states

One of the main components to the Trump platform has to do with minimizing federal regulations. In an August announcement, his administration committed to “Require each federal agency to prepare a list of all of the regulations they impose on American business, and rank them from most critical to health and safety to least critical. Least critical regulations will receive priority consideration for repeal.” While this may spell freedom for some organizations, that will create the need for HR and Comp professionals to keep closer tabs on what’s going on in each state where they do business.  Here are some of the regulations that we may see change in the coming years:

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  • Minimum Wage. Trump does not support increasing minimum wage significantly. Instead, he has suggested that tax breaks may better benefit American workers.
  • Fair Labor Standards Act. Trump is likely to reverse the proposed changes to the FLSA. While there is no overt statement on his issues pages, because the main goal is to have less regulation, he is likely to overturn the changes to the FLSA overtime rules. That said, remember he won’t be in office until mid-January so your organization may be at risk when the changes go live on December 1st, 2016.
  • Gender Pay Equity Laws. While there is no overt statement on Trump’s issues pages, we know he does not support policy action regarding pay equity laws as well. It’s not likely, therefore, that we’ll see something pass at the federal level.
  • Paid Family and Medical Leave. Trump supports 6 weeks of paid Maternity Leave for working mothers. While this policy wouldn’t support fathers or adoptions, it does improve leave for birth mothers.
  • Health Insurance. Trump will repeal and replace “Obamacare” with Health Savings Accounts (HSAs).

Taxes and Trade Agreements

One of the primary ways in which Trump plans to create change for American businesses is through changes to both taxes and trade agreements.  He intends to use tax breaks to support working people. Then in terms of trade, expect changes to our NAFTA and Trans-Pacific Partnership trade agreements. The final thing in this sphere that Trump has been explicit about is ending the Offshoring Act.

Industries to Watch Out For

  • Trump wants redirect money to Energy, in particular Oil & Gas, Shale, and Clean Coal. Expect him to pull from clean or green energy initiatives and industries.
  • Trump expects his proposed changes to trade agreements to positively impact the Manufacturing industry.
  • Trump also plans big Infrastructure improvements.
  • On the other side, Trump has said he would put a hiring freeze on federal employees and let the number of federal employees dwindle through natural attrition.

The implications of having a new President are far-reaching for organizations in the US. We’ll keep tracking the initiatives from the Oval Office to your office. Did we miss some? Share about additional impacts of the Trump presidency on your work in the comments below.

Mykkah Herner
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Bob MalinLiz D'AloiaAlicia Bressler Recent comment authors
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Alicia Bressler
Alicia Bressler

Great summary. Thanks for posting! Glad to see deregulation coming soon – too bad it’s not in time to change the impending FLSA law.

Liz D\'Aloia
Liz D\'Aloia

We can expect that he will also rescind the paid sick leave requirement for federal contractors, too. He will likely significantly reduce funding for the EEOC and DOL, so expect more class action suits and less audits from those agencies.

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