What Can Hospitality Employers Expect from the Trump Administration?

Peering Into a Very Murky Crystal Ball

By Stephen J. Roppolo

Regional Managing Partner – Houston

Some things seem pretty clear: at least from a fiscal standpoint, the White House has established the military, a border wall and immigration enforcement as priorities.

In a proposed budget published March 16, only the Departments of Veterans Affairs, Homeland Security, and Defense were in line for increases.

Every other department – including the Department of Labor – would suffer significant cuts if the Trump budget became effective (a result that is not likely if initial reaction on Capitol Hill is any measure).

So without further ado, here’s what Texas hospitality employers, including hotels, can expect over the next four years:

  • A Weakened Department of Labor. As noted above, the President’s preliminary budget reduces DOL funding in 2018. This means less money for the Wage and Hour Division, OFCCP, and the Bureau of Labor Standards to do their work. To be precise, the Administration is proposing the DOL accept a $2.6 billion haircut – an overall budget reduction of 21%. (The only departments slated for deeper cuts are the State Department, the EPA, and the Agriculture Department.) This would undoubtedly mean less robust enforcement of the Fair Labor Standards Act and other federal labor statutes, though it is entirely possible that private plaintiffs would pick up the agency’s slack.
  • Reconsideration of Increased Minimum Salaries for FLSA Exemptions. Most employers know that the DOL had issued a final rule, set to go into effect December 1, 2016, that would have significantly increased the salary thresholds for the so-called “white collar” exemptions to the FLSA’s overtime and minimum wage requirements. But Judge Amos Mazzant’s late November decision enjoined enforcement of the Department’s much-discussed rule, which would have doubled the minimum salary to be paid before certain employees could be considered exempt. The Obama DOL appealed the decision, but the  

  • Trump DOL has already asked the Fifth Circuit Court of Appeals for an extension until May 1 to give it time to decide whether it wants to pursue the matter. Smart money has the current DOL dropping the appeal, declining enforcement in the short term, and seeking a more modest increase in the minimum salary level through another round of rulemaking.
  • A Kinder, Gentler EEOC? The acting Chair of the Equal Employment Opportunity Commission has stated that the Commission will try to work more closely with employers to help foster economic growth. This is consistent with the President’s repeated promises of more jobs, and it could signal that the Commission’s expanded EEO-1 Report might be delayed or rolled back.
  • Labor Board Shift. President Trump has already ruffled feathers of teachers unions (by aggressively supporting voucher programs) and government employee unions (by proposing weaker civil service protections). Since the Administration will have the opportunity to appoint members of the National Labor Relations Board, employers can expect that unions will receive a less favorable hearing on matters relating to employee organizing. In addition, it is likely that the Board will be less inclined to rule in favor of non-union employees alleging that work rules violate the National Labor Relations Act.
  • Paid Family Leave? It’s not all bad news for employees. Candidate Trump (and his daughter Ivanka) promised during the campaign that he would favorably consider legislation designed to convert some portion of Family and Medical Leave to paid leave in cases of maternity. This apparently would not extend to other forms of FMLA leave, such as for non-pregnancy-related serious health conditions, nor did it sound like it would include paid paternity leave. It is possible that paid leave would be limited to larger employers and not all companies covered by the FMLA.

Of course, all of this could change in the amount of time it takes to “tweet,” so it’s a good idea for hotels to pay attention to the news over the first 100 days of the Trump Presidency. . . .and beyond.

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