Our 2017 HR Predictions, Revisited
What a long, strange trip it’s been. Shortly after last year’s historic election, we tried our hand at predicting the future. What would the Trump administration hold for key HR and employment issues like overtime and paid leave? Would the Affordable Care Act and its oft-maligned Cadillac Tax meet their end?
A year later, it’s time to reflect on 2017 and see whether our HR predictions stood the test of time.
Prediction 1: “The DOL’s new overtime rules are history.”
It was just over a year ago when a federal judge issued a preliminary injunction against the Obama administration’s new overtime rules. Those changes would have doubled the minimum salary for overtime exemption from $23,660 to $47,476 per year, leading to the reclassification of over 10 million American workers.
In late 2016, we predicted that the Trump administration would abandon the new rules. That was a fair assertion to make, as Republicans were always the changes’ most vocal opponents. Indeed, Secretary of Labor Alex Acosta eventually announced he wouldn't defend them in court. So why aren’t we giving ourselves a perfect score?
In late October, the Department of Labor reversed course—sort of. The agency announced it would appeal the rules’ halting, but only to defend its own authority to set salary thresholds in the first place. Sources close to the Acosta also report that he's contemplating a more modest increase to $33,000, and even incorporating automatic increases in the future.
Needless to say, no one saw that coming. The only safe bet here is that Namely will continue working overtime on this story.
Prediction 2: “Congress will not settle on a minimum wage increase.”
Going into the new year, it wasn’t entirely clear what President Trump’s position was on the minimum wage, which currently sits at $7.25 per hour. While campaigning, he called for an increase up to $10 per hour, surprising some of his conservative peers. The candidate’s “soft pledge” came on the heels of a massive year for the Fight for 15 movement, with a record number of states and cities inching closer to a $15 minimum wage.
A year later, Washington lawmakers are tight lipped on the minimum wage. Immigration, the Affordable Care Act, and tax reform have kept lawmakers too preoccupied to even entertain a discussion on wages. Once the dust settles on these issues, only then might we see movement on wages.
That said, public support for a wage hike remains high. Polls suggest that a bipartisan majority of American voters supports an minimum wage increase up to $9.00 per hour—meaning conservative lawmakers might be willing to pick the issue up ahead of midterm elections next year.
Prediction 3: “The ‘Pro-Employee Tide’ stays strong at the local level.”
While we didn’t see much progress on traditional employment law issues like paid family leave or the minimum wage, we saw a tidal wave of other pro-employee measures at the state and local level. Some of those approaches were fairly novel, like predictive scheduling laws and salary history bans. The latter became a particularly hot topic in legislatures across the country.
In 2016, Massachusetts became the first state to ban the use of salary history in recruiting. Lawmakers’ reasoning here was straightforward: if employers can’t base future compensation on past biases, the gender wage gap effectively “resets.” It was a creative approach to a stubborn problem—as of this writing, women are only paid an average of 80 cents to the dollar. Since Massachusetts passed its ban, California, Oregon, Delaware, and the cities of Philadelphia, New York, and San Francisco have followed suit. Simply put, salary history bans were one of the hottest trends in 2017 compliance.
Prediction 4: “The Cadillac Tax will meet a swift end.”
While we didn’t predict that the Affordable Care Act would be repealed, we were confident that the so-called the Cadillac Tax was destined for the scrapyard. The tax, which was always a part of President Obama’s landmark healthcare law, is a 40 percent excise tax on high-cost employee benefits. The tax, which has been delayed several times, is finally set to take effect in 2020.
At the time, our prediction was a safe one to make, considering even Democrats wanted to kill the tax. While past ACA repeal-efforts would have eliminated it, all of those attempts faltered at the eleventh hour, sometimes in dramatic fashion. Though Republicans are discussing repealing the tax this month, those efforts likely won’t be included in the party’s recent tax reform efforts.
Prediction 5: “Congress will pass some form of paid family leave.”
Out of all our predictions last year, this was the boldest. We believed conditions were ripe for a paid leave mandate, given growing, bipartisan support. Both President Trump and members of his family seemed to echo that sentiment, and we gambled that his Republican counterparts in Congress would fall in line and enact a modest proposal. What fun would a predictions story be without a long shot?
Close, but no cigar. Since President Trump’s inauguration, a number of paid leave proposals have been floated in Washington. In May, the administration released a proposal for a six week mandate. In November, conservative lawmakers and the Society for Human Resources Management (SHRM) unveiled another proposal that would shield businesses from state and local paid leave laws if they offered a minimum amount of paid leave. While both were promising, neither measure has made it across the finish line—yet.
So why not an “F” score? All's not lost on paid leave. Senate Republicans are working to include a provision in this month’s tax reform push that would create lucrative tax incentives for businesses who implement a paid family leave program that pays at least 50 percent of wages. While stopping short of a mandate, that proposal would mark a promising development for paid leave activists.
It’s been a wild year for HR, full of twists and turns that even Nostradamus wouldn’t see coming. The Affordable Care Act managed to survive twelve months of repeal attempts, the DOL flip-flopped on overtime, and paid family leave suddenly became a priority. So what does the future hold? Stay tuned for our 2018 predictions later this month.
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