I Think I Can, I Think I Can: The Little Trump Engine that Could (Or Couldn’t)

By Ilona Demenina Anderson

On the campaign trail, President Trump promised that his administration would create more jobs. At the time, candidate Donald Trump did not elaborate how he would go about creating jobs. Less than two months into his term, it is slowly becoming clear that Trump’s policies could affect job creation as well affect millions of Americans who are currently employed. Whether or not his proposals will result in laws or federal directives that will be implemented during his term, is still to be seen. Nothing is concrete as of the moment, but there are some indicators of the direction in which the Trump administration is headed.

Minimum wage increase: to be or not to be

The federal minimum wage is still at $7.25. There is uncertainty that the federal minimum wage will increase during the Trump administration if we consider the action of the Republicans during the Obama administration. The Republican bloc in the Senate thwarted moves by the Democrats to increase the federal minimum wage to $10.10.

Despite the impasse in the Senate regarding the increase in minimum wage, states such as Washington, Oregon, California, Arizona, Colorado, Maine and New York increased their minimum wage rates to around $12- $15 per hour. Other states such as Nevada and Maryland will increase their minimum wage rates this coming 2017. The legislatures of the states of Pennsylvania, New Hampshire, Rhode Island, Connecticut, Massachusetts, Vermont, New Jersey and Ohio will consider bills increasing the minimum wage rate in their jurisdictions in 2017.

There are at least 21 states who have not increased their minimum wage rates and continue to offer $7.25 per hour to low-paid employees. This has resulted in workers leaving those states to go to other states with higher minimum wage rates, thus, increasing competition for low-pay jobs in those states. On the other hand, in the states where the minimum wage rates have increased, some businesses have closed due to the inability to pay the increased minimum wage. Some employers have had to lay off some workers to comply with minimum wage for the fewer employees they retained.

Overtime pay

During the final months of the Obama administration, the income threshold for employees in administrative, executive or professional positions was set to increase from $23,660 to $47,476 annually. This means that employees earning at least $47,476 would not be entitled to overtime pay. Those earning less than this would be paid time and a half for every hour they work beyond 40 hours per week.

What has happened is that under the most recent regulation by the Department of Labor, those employees occupying supervisory and managerial positions and who have been ineligible for overtime pay would have either been eligible for overtime pay when the regulation was supposed to take effect in December 2016, or, their employers would have had to raise their annual salary to match the new $46,476 annual salary threshold.

Many employers already took steps toward implementing the new regulation on overtime pay in preparation for it taking effect on December 1, 2016. However, on November 22, 2016, a Texas federal judge has issued a restraining order against the regulation, stalling its implementation. The Department of Labor under the Obama administration has appealed the Texas federal judge’s order. Significant opposition to the new overtime regulation has come from fast food franchisees who cannot afford to give their managers a pay hike or pay them overtime. It is unclear what the Trump administration will do. By simply withdrawing the appeal or failing to sufficiently fight against the restraining order, the expected nationwide increase in pay threshold for managerial employees may be in limbo.

Paid family leave

Since 1993, when the Family and Medical Leave Act came into effect, certain eligible employees who have exhausted their sick leave can go on unpaid leave when they are hospitalized or when they are recuperating from illness or injury. They can also take unpaid leave to take care of a sick or disabled member of the family, take care of a newborn baby, or bring a child or disabled member of the family for medical treatment or medical check-ups. Three years ago, the Obama administration sought to pass a law that gave both mothers and fathers paid leave for up to 12 weeks after childbirth. The US is the only first-world country without a paid family leave program. This bill was blocked by the Republican bloc in Congress.

Now, President Trump has asked the Republicans in Congress to craft a law mandating six weeks of paid maternity leave to female employees. President Trump also proposed that in the alternative, paid maternity leave be given as a temporary unemployment benefit. Whether or not such a law will be passed is still unclear, but even as it has just been proposed, the proposal has been highly criticized. For one, under the Trump administration’s proposal, only mothers are given maternity leave – fathers are not given paternity leave. Parenting chores and responsibilities are often shared by both mothers and fathers. Second, under the FMLA, parents are allowed to go on unpaid leave but their jobs are secure – they can always return to their jobs without fear that they will lose their benefits or their seniority. If paid maternity leave is given as a temporary unemployment benefit, the job security enjoyed under the FMLA will disappear. Clearly, the Trump administration offers two unacceptable alternatives for new parents who have to take care of their newborn child: unpaid leave with job security or paid leave without job security.

There is also fear that because six weeks of maternity leave will be paid by employers under the proposal, employers may further discriminate against female applicants for a job or they may discriminate in promoting female employees. Small businesses, however, have expressed fear that aside from the added cost of paying for maternity leave for their female employees, their businesses might not be able to cope with the increased volume of work for other employees when female employees go on maternity leave with pay for six weeks.

Child care services for employees

The Trump administration proposed to increase the tax incentives given to employers who provide child care services for their employees at work. At the present, employers are given a limit of $150,000 yearly incentive. The new administration seeks to increase the yearly limit to encourage more employers to provide child care services to their employees in the workplace.

The Trump administration proposes to include child care expenses as items of deductions in federal income taxes. There is concern that this might favor employees who have higher salary rates but not employees who are low-paid.

“America First” policy

In his inauguration speech, Donald Trump vowed to put America first. Immediately, an executive order was issued by the president preventing Muslims from seven countries from entering the United States. The program allowing refugees from Syria to settle in the United States was also suspended.

The president has vowed immigration reform by further reducing the cap on yearly applications for H-1B visas and by increasing the requirements for employers sponsoring H-1B visas. H-1B visas are working visas for persons with unique or technical skills. Under this visa classification, professionals such as doctors, nurses, physical and occupational therapists, teachers, university professors, researchers, information technology engineers and others can enter the United States and work here, and obtain legal permanent resident status.

While the current administration will not completely suspend the issuance of H-1B visas, the Trump administration’s proposed immigration reform plan will ensure that jobs are offered to Americans first before allowing foreigners to be hired. In the same breath, however, the Trump administration proposes a raise in the prevailing wage for employees holding H-1B visas.

In this connection, as well, the Trump administration supports the nationwide mandated use of E-verify, an electronic database that verifies the immigration status of employees. At the moment, verifying the immigration status of an employee is voluntary on the part of employers. However, federal offices already use E-verify for contractors. About 22 states do not use E-verify but they do use a different but similar verification system.

Potentially, these actions will not create jobs but they will ensure that foreigners and undocumented aliens will not compete with Americans for the jobs that are already available. The Trump administration hopes that by limiting the jobs available to foreign workers and by curtailing the benefits they could receive, fewer foreign workers would come and compete with Americans for jobs.

Exactly where is the Trump administration headed? We all have to wait and see.


USA Today: What happens to worker pay, benefits under Trump?

Wolters Kluwer: How will a Trump presidency affect labor and employment law?

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