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Four Ways the President Could Affect the Staffing Industry

Donald Trump barnstormed his way into the White House in part by positioning himself as the “jobs president.” In his inauguration speech, he famously described America as a land of “rusted-out factories scattered like tombstones across the nation,” and promised to create 25 million new jobs in the next decade. Another campaign promise included cutting regulations that he claims are strangling American businesses.

While Trump’s presidency is still young, his pen has been busy, signing new executive actions that are already creating ripples through the economy. His administration is also actively working with the Republican-controlled House and Senate to begin implementing his new “America First” policies.

Let’s look at four areas where the new president has already or is trying to make sweeping changes that may affect how Americans are hired.

Immigration

Candidate Trump set himself apart from other Republican primary contenders by promising to build a wall across the United States’ border with Mexico to stymie the flow of illegal immigrants into the U.S. He also suggested the possibility of closing the country to Muslim immigrants. In his first months in office, Trump has taken action on both of these promises. A set of executive orders pledged to create “a contiguous, physical wall or other similar secure, contiguous, and impassable physical barrier” across the Mexican border, as well as to hire 10,000 additional immigration officers.

He also signed an executive order that blocked travelers from seven predominantly Muslim countries from entering the U.S. That order was quickly suspended by the courts, and on March 6, 2017, the president issued a revised order naming only six countries in the travel ban and allowing certain travelers, such as visa-holders, into the country.

While some tech companies and colleges argued that the travel ban restricts the movement of their employees and students, these orders won’t affect most staffing agencies. However, another immigration rule change that received little news coverage may cause staffing agencies the most headaches.

On Friday, March 3, 2017, the U.S. Citizenship and Immigration Services (USCIS) announced that it will suspend the fast-track processing of H-1B visas, which allow high-skilled workers into the U.S. This suspension means that it will take longer for companies to learn whether their employees will be allowed to enter the country to work. This rule change could have a big impact on the tech companies that rely heavily on high-skilled foreign workers, as well as on the staffing agencies that feed these companies. The USCIS did not mention how long the suspension will remain in place.

Regulations

Donald Trump spoke passionately during his campaign about how regulations were strangling American businesses, and it didn’t take him long to target them when he entered the Oval Office. On Monday, January 30, 2017, he signed an executive order requiring federal agencies to cut two existing regulations for every new regulation they introduce. During the signing ceremony, Trump said, “We’re cutting regulations massively for small business and for large business.”

This executive order is unlikely to have a major impact on the staffing industry in the short term. However, if fewer regulations allow businesses to expand and save money they would have otherwise used on compliance and oversight, it could eventually trickle down into more investments in their workforce. Look to see if fewer regulations results in a slow uptick in hiring over the coming years. 

Healthcare

Perhaps no governmental policy was as maligned by Donald Trump during the presidential campaign as the Affordable Care Act (also known as the ACA or Obamacare). Even before his presidential campaign, Trump didn’t hold back, comparing the ACA to the Titanic and Hindenburg. Then, in his campaign, he promised to repeal and replace it with a better policy. On Monday, March 6, 2017, House Republicans rolled out an early draft of a replacement for the ACA, called the American Health Care Act (also known as the AHCA or Trumpcare).

Then, on Friday, March 24, 2017, House Republicans withdrew the bill before a vote was ever held. However, healthcare reform remains a hot-button topic, and employers would be wise to keep an eye on future attempts to repeal the ACA. The AHCA, for example, would have eliminated the individual and employer insurance mandate. Any business owner who was forced to cut worker hours down to less than 30 per week in order to avoid the mandate could possibly have been able to offer those same workers more hours under the AHCA. Additionally, businesses may have been able to afford to bring on more full-time employees without the added expense of providing health insurance with the Republicans’ proposal.

As HR Drive explains, the tax on so-called “Cadillac healthcare policies” was still in place in the AHCA. If this tax remains in future legislation, it will likely face a lot of pushback from large companies that use these types of policies to attract the best and brightest workers.

Employers and staffing agencies should note that any healthcare replacement will face a lot of scrutiny from various groups and will likely change as both the House and Senate collaborate on the final bill.

Overtime

When the Department of Labor issued a sweeping overhaul of overtime rules that would have dramatically increased the number of employees eligible for overtime pay, employers scrambled to comply even as states and industry groups rushed to the courts demanding an injunction. The rules, if applied, could have increased overhead costs or forced employers to cut down or eliminate overtime work for employees making less than $47,476 a year.

On November 22, 2016, just days before the rules were set to take effect, Judge Amos Mazzant issued a preliminary injunction, effectively halting its implementation. It’s still unclear what will happen to the rules as President Trump makes his own appointments to the National Labor Relations Board (NLRB).

While the new administration has not yet addressed the NLRB’s overtime rule changes, it seems unlikely that it will pursue an appeal to the injunction. In all likelihood, the new overtime rules are dead in the water. Now, employers must determine if they should keep the new salary standards they promised to employees or take away the pay increases.

What’s Next?

Donald Trump is not afraid to break with the traditions of his party. What does that mean for his future actions regarding immigration, tax reform, regulation reform, and other policies that affect businesses and staffing agencies?

So far, Trump’s executive orders have sought to fulfill his campaign promises. Does that mean we can count on 25 million new jobs in the next ten years? The business world will have to wait and see how this businessman-turned-president and his non-traditional administration work to fulfill his ambitious campaign promises.

 

 

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