The lawyers overall expect that the regulatory environment will be more employer friendly under the Trump administration, with some key areas of expected change.
Here are four other takeaways from the report:
1. Overtime pay. Under former President Biden, the Labor Department put protections into place that went into effect July 1, 2024, making anyone earning less than $43,888 entitled to overtime pay. That threshold was supposed to increase to $58,656 on Jan. 1, but was blocked by a stay from a federal court in Texas.
“We anticipate that the appeal will be withdrawn under the new leadership of the Department of Labor and that this projected $58,000-plus salary threshold will not go into effect,” Jennifer Phillips, a member of McDonald Hopkins’ employment practice group, said in the webinar.”
The lawyers added that while the administration could maintain the threshold put in place in July, they anticipate an even lower threshold being added, likely between $35,000 and $40,000.
2. Impact on visas, work eligibility: Given the Trump administration’s more aggressive stance on immigration reform, the lawyers advised employers to be more diligent regarding compliance with immigration law.
“I think we’re going to see much more regulation about I-9 requirements — what you need to do to verify employment eligibility to work in the United States. And probably, I think we’ll see less H-1B visas and an ability to attract talent from other countries,” they said. It is also likely that there will be increased enforcement ensuring that employers are hiring people who are legally authorized to work in the U.S.
3. Changes for independent contractors: In January 2024 the Biden administration issued a rule changing how employers determine employees versus independent contractors. The Labor Department was supposed to defend the rule in oral arguments before the 5th Circuit Court of Appeals earlier this month, but it is now expected that the Department of Labor under Mr. Trump will reinstate the 2021 independent contractor rule.
The lawyers said that this rule is considered more employer-friendly, and employers may want to reevaluate whether certain positions should be held by independent contractors or employees.
4. Noncompete agreements: While the Federal Trade Commission is currently appealing an August 2024 decision to strike down a proposed ban on noncompete agreements in employment contracts, the lawyers noted that it “seems unlikely” that the appeal will go through under the Trump administration.
However, employers should remain attentive to noncompete regulations in their respective states. Ohio is the most recent state to propose a ban for noncompete agreements. If the proposed bill becomes law, it would become the fifth state to ban such agreements.
