How Employment Law May Change Under the New Trump Administration

A new administration means new priorities. While we have no crystal ball to predict precisely what will occur once President-elect Trump takes office, we have some sense of what to expect with various employment laws and priorities. Some changes are summarized below. Before you take steps to change or modify existing policies or practices, it’s always advisable to discuss them with your Nyemaster Labor and Employment law attorney.

 

 

KEY ACTIONS AT THE DEPARTMENT OF LABOR

Employers can expect the Department of Labor (DOL) to change course on several issues that have posed challenges for employers.

 

DOL’s salary basis rule change has been vacated and is unlikely to be enforced. On July 1, 2024, a DOL rule increased the salary threshold for exempt employees to $43,888 annually. A second increase was set to occur on January 1, 2025, which would have increased the exempt salary basis minimum to $58,656—roughly a 40% increase over the threshold that existed prior to the rule change.

 

After the DOL issued the final rule, a number of business groups challenged the law. Last month, a federal district court vacated the rule in its entirety. Employers no longer have to comply with the July 2024 salary basis increase or the January 1, 2025 second-step increase. The Trump administration is unlikely to attempt to take steps to enforce the rule. It’s also unlikely to take other steps to effectuate a similar version of the same rule.

 

With the rule vacated, employers can legally roll back increases they’ve already implemented following the July 2024 change. However, it would be wise to consult a labor and employment attorney before acting to make sure any rollback does not appear to be suspicious to employees. Consistency and caution are key in dealing with any employment actions like these.

 

Review of criteria for classification of workers as independent contractors. Shortly before President Biden was inaugurated, then-President Trump’s DOL finalized a rule intended to ease the requirements to classify workers as independent contractors. The Biden administration never implemented the Trump-era rule. The new Trump administration may effectuate the rule it previously drafted, making it easier to classify certain workers as independent contractors.

 

Collaboration on immigration reform and deportation of undocumented workers. Many legal eagles expect federal agencies under the Trump administration to partner with the U.S. Immigration and Customs Enforcement (ICE) to effectuate more workforce raids. They also expect that agencies will apply heightened scrutiny on the employment status of immigrant and undocumented workers.

 

For this reason, it would be wise to ensure that your I-9 forms are in order. ICE can audit an employer’s I-9s, and it’s better to have identified and corrected I-9 issues before ICE. In July 2024, the penalties for I-9 violations changed from $230 to $2,304 for a single violation. No one wants to pay any penalty—much less a significantly heightened penalty

 

 

WHAT TO EXPECT FROM THE NATIONAL LABOR RELATIONS BOARD

In addition to regulating the unionization of employees, the National Labor Relations Board (NLRB) also regulates employee speech in the workplace, as well as employee rights to engage in certain protected activities. Under the Biden administration, the NLRB was extremely aggressive at enforcing issues for employers without a union presence. Here are a few changes we can expect, some sooner than others, when the Trump administration takes office in January 2025.

 

A change in leadership and approach. The Trump administration will move to replace General Counsel Jennifer Abruzzo, who has charted the NLRB’s aggressive enforcement approach.  

 

Rescission of memoranda that established novel or controversial workplace expectations. Controversial memos authored under current General Counsel Abruzzo will likely be rescinded. Rollbacks probably will include memos related to:

• Consequential damages. The NLRB had indicated its intent to seek 100 percent backpay and 100 percent front pay for settled unfair labor practice claims.
• Captive audience rules. The NLRB, under General Counsel Abruzzo, had reversed precedent that previously permitted employers to require employees to attend a meeting where, for example, employers discussed potential benefits of not having a union.
• Noncompete stay-or-pay rule. An effort to curb enforcement of noncompete agreements, General Counsel Abruzzo argued that it was an unfair labor practice to enforce an otherwise valid non-compete. This was an unprecedented effort to curb the use of non-competes, which are politically unpopular, but valuable to employers.
• Confidentiality and non-disparagement clauses. The NLRB had indicated that including confidentiality and non-disparagement clauses in severance agreements was an unfair labor practice. This will likely be reversed.

 

Longer-term changes. Other controversial rules and decisions are likely to be revisited. For example, the Stericycle decision is, eventually, likely to be overturned. This NLRB decision created an interpretive rule: if an employer’s work rule could be interpreted by any reasonable employee to have a chilling effect on an employee’s ability to engage in protected concerted activity, it would be deemed unlawful by the NLRB. The “unlawful” presumption applied even if another reasonable interpretation of the same work rule would have rendered it lawful. This caused many employers to reconsider many of their workplace rules. After the Board’s members turn over, the Board is likely to return to the pre-Biden standard that did not apply such a presumption to workplace rules.

 

 

WHAT TO EXPECT FROM THE FTC

The Biden administration made significant efforts to eliminate or invalidate noncompete agreements, most notably through the Federal Trade Commission’s issuance of a rule that would have invalidated most non-competes in the United States. After business groups challenged this rule, a federal district court enjoined the rule, so it never took effect. Prohibiting restrictive covenants will not be a priority for the Trump administration. It’s likely the rule will never be enforced.

 

While we do not expect federal law on non-competes to develop under the Trump administration, we can expect to see developments continue at the state level. Some states recently enacted restrictions on noncompete agreements. For example, Minnesota recently enacted a law that invalidates most non-competes in that state. In Iowa, however, noncompete agreements are generally enforceable if they’re reasonable in scope.

 

 

THE IMPACT AT THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

EEOC commissioners are appointed by the president to serve a specific term. The current EEOC Democratic majority will remain in place until 2026. When leadership changes occur and the Trump-appointed commissioners become the majority, you can expect to see the following enforcement priorities bubble to the top:

 

Scaling Back of Diversity, Equity, and Inclusion (DEI) Efforts

Expect to see both private and public action taken to curb or eliminate employer’s DEI programs. We are already seeing some movement in this area when it comes to “reverse discrimination” claims, which the U.S. Supreme Court will consider this next term in Ames v. Ohio Department of Youth Services.  

 

Pregnant Workers Fairness Act (PWFA) Claims and Abortion Care

The Pregnant Workers Fairness Act and its implementing regulations protect employees with “pregnancy-related conditions” from discrimination, and require accommodations to be made for pregnancy-related conditions unless the accommodations pose an “undue hardship.” The PWFA defines “pregnancy-related conditions” to include abortion, menopause, fertility, and menstruation issues. We expect to see changes to the definition of “pregnancy-related conditions” with respect to abortion care.

 

Giving a glimmer of what to expect, last year, the lone remaining Trump-appointed EEOC commissioner initiated discrimination charges against companies that offered abortion travel benefits to employees. Employers who offered travel benefits for abortion care came into the spotlight after the Dobbs decision, since its outcome caused many individuals to travel out of state to seek abortion care. Some employers offered benefits to employees to travel for abortion care that was no longer available to them following Dobbs. While the Commissioner’s initiation of charges for providing abortion care was disavowed by the rest of the EEOC commissioners, that type of enforcement interest may indicate what is to come under the Trump EEOC.

 

Challenges to LGBTQ+ Worker Protections

During the Biden administration, U.S. Supreme Court issued the Bostock decision. The Bostock decision concerned the interpretation of the word sex under Title VII. By a very slim majority, the court found the definition of sex under Title VII included not just an employee’s biological or assigned sex at birth, but also the employee’s sexual orientation, gender, and gender identity and expression. That allowed employees to file sexual orientation discrimination claims under Title VII.

 

With the new composition of the U.S. Supreme Court, the definition of sex is likely to be re-examined. A pending lawsuit headed to the Supreme Court focuses on a Biden era Title IX regulation that defines sex and gender identity. Title IX, the federal law that governs discrimination rules in athletics and education, is a different statute from Title VII. The Court will likely indicate whether they would be open to revisiting the Bostock decision when they consider Title IX.

 

The Iowa Civil Rights Act (ICRA) gives Iowa employees protection for sexual orientation, gender, and gender identity. Even if the federal law changes, the ICRA and its prohibition against discrimination for gender identity and sexual orientation will still apply. However, we anticipate that certain Iowa lawmakers may attempt to remove that protection from the law—they attempted to do so in the last general assembly.

 

Challenges to Antidiscrimination/Harassment Training and DEI Training

There’s been a significant push involving employees who challenge or refuse to participate in diversity, equity, and inclusion programming or training. Employees have attempted to characterize the required training as a violation of their religious rights or as harassment. Some employees who have been fired for refusing to participate in their mandatory training consider their terminations to be retaliatory. Case law, so far, does not seem to support these kinds of claims. However, we are likely to see more of these types of claims and arguments raised by employees in the next four years.

 

 

POTENTIAL NEW EMPLOYMENT LEGISLATION

The new administration may consider a mix of legislative efforts:

• Paid leave at the federal level—paid parental leave or sick leave, for example—is unlikely to pass. Iowa legislators are unlikely to propose a paid leave bill either.
• Repeal or modification of the Affordable Care Act may be attempted. It may address how people with preexisting conditions are covered or how in vitro fertilization is covered by insurance.

 

Stay tuned in to employment law actions at the federal and state level. As the new administration settles in, more employment law issues may emerge. Discuss legal changes and how they affect your organization with your Nyemaster Labor and Employment law attorney.