With the presidential election nearing, Workforce polled experts in employment law, family leave, immigration reform and the Affordable Care Act regarding potential workplace changes in the wake of a win by Democratic candidate Hillary Clinton or Republican candidate Donald Trump.
The experts stayed measured in the interviews, having supportive and critical comments about both candidates and their political agendas. The interviews took place in late July, and their commentary was largely based off policy or platform rather than either candidate’s campaign speeches.
While the predictions are speculative, and no matter what the candidates’ agendas are regarding certain issues, other factors such as the makeup of Congress, choice of vice president or the selection of Supreme Court justices will impact the workplace in meaningful ways, as well. That being said, the experts who spoke with Workforce took these factors into account when pondering the election and the future workplace.
Health Care and the Cadillac Tax
Health care may be the biggest hot-button issue in this election. President Barack Obama initially ran for president touting “health care for all,” and eight years later the health and wellness landscape is radically different from 2008. Some 90 percent of Americans are insured, and not surprisingly, Clinton wants to both expand the ACA and increase the number of insured to 100 percent of Americans. Trump wants to repeal the ACA completely and go a different route.
Recalling Clinton as first lady, she was passionate about health care, said Jon Shanahan, president and CEO of Businessolver, an employee benefits administration company. If elected, she’ll evaluate what’s working with the ACA, attack the issue and try to expand on it.
“Very definitely it’s going to change, but how quickly it will change, how much you could impact it … remember President Obama ran on this, and look how long it took to get rolling,” Shanahan said. “[Change takes a long time], and there are also budgeting implications around this.”
If Clinton does win and expand the ACA, it could mean confusion for HR. Employers’ relationship with health care is already complicated as is, noted Kismet Toksu, president at eBenefits Solutions, a provider of HR consulting services and training.
“The practitioners I’ve spoken with are finding that the ACA is very challenging. The obligations are difficult to understand, and they continue to change,” she said. “The question [surrounding the ACA] is how would I, as an HR manager, know how to report, what my obligations are, what my risks are, at a time when I have so many other obligations?”
One of the most talked about provisions of the ACA is the so-called Cadillac tax, which would place a 40 percent surcharge on high-cost employer health benefits plans above a certain threshold. Congress postponed its implementation until 2020 and the proposal remains a deep focus of the Clinton campaign, said Jeff Oldham, vice president of Benefitstore at Benefitfocus, a cloud-based benefits management platform. He doesn’t expect her to abolish the Cadillac tax but to replace it with a new version and new limitations, for example by increasing the threshold.
“There are certain industries — like unions and school systems — in which they recruit and retain their employees with rich benefits, in particular rich medical plans, as the tradeoff of having a moderate to average base salary,” said Oldham.
These industries are significant not only to the country but historically to the Democratic candidate who wants their vote, he added.
Clinton may also plan on taking geographic variations into account with the Cadillac tax threshold. Currently it’s flat, so whether you do business in Manhattan or Montana, the threshold is the same.
Meanwhile, along with completely repealing the ACA, Trump is looking toward health savings accounts as the solution to some of the nation’s health care problems. HSAs are the medical equivalent of the 401(k) for health care, said Oldham, and people can use the money post-retirement for medical related expenses. The contributions are tax-free.
Based on these benefits, Trump believes that the HSA will be “particularly attractive to young people who are healthy and can afford high-deductible insurance plans,” according to his campaign site.
Other key parts of Trump’s platform aim to lower the cost of health care. He wants to allow the sale of insurance across state lines in order to increase competition and decrease costs. Also, his immigration reform plan would include measures to stop providing health care to undocumented immigrants, which would also potentially decrease costs.
Employee Benefits: Retirement, Paid Family Leave
Saving for retirement is Americans’ biggest financial concern, just above not being able to pay medical costs. Sixty-four percent of Americans are worried about not having enough money saved for retirement, according to a Gallup’s Economy and Personal Finance Survey of 2016.
Health care and retirement are the two largest expenditures in the federal budget, said Jim Klein, president of the American Benefits Council. Twenty-five percent ($938 billion) of the federal budget spending went to health care programs like Medicare and Medicaid in 2015, and 24 percent went to Social Security ($888 billion), according to the Center on Budget and Policy Priorities.
Whereas health care and the bipartisan debate surrounding the ACA have been getting the lion’s share of attention, retirement benefits appears to be overlooked.
Although there is a fair amount of bipartisan agreement in Congress on many policy issues regarding retirement, Klein said, there’s no national retirement policy around which members of Congress can debate whether what they’re doing is advancing or impeding that policy.
“Consequently, we hear now that Americans aren’t saving enough, and, yet, there are policy directives that try to limit what people can put in their 401(k) plans,” he added.
Based on Klein’s comments, what may be interesting to watch for in the election is whether Trump or Clinton will push comprehensive retirement legislation based on the fact that Americans are increasingly worried about their financial futures. They have spoken about Social Security but they haven’t put retirement, in the broader sense, on the top of their agenda.
Richard Eisenberg, a contributor to Forbes, also wrote about how there’s very little to go off on the topic of retirement. In an article published in August, “Where Clinton and Trump Stand on Retirement Security,” Eisenberg noted how 76 million baby boomers are either starting to retire or getting close to it, and how 77 percent of survey respondents found saving for retirement to be a “major public policy issue,” according to a Charles Schwab survey.
Both Clinton and Trump are against raising the Social Security retirement age or cutting benefits, he wrote, but neither candidate has officially stated plans regarding major private-sector retirement vehicles such as 401(k)s and 403(b)s.
Paid Family Leave
Currently, only 12 percent of employees in the U.S. private sector have access to paid family leave, according to the Department of Labor. The U.S. is, in fact, ranked last among developed countries when it comes to offering paid maternity leave.
The time-off (paid or unpaid) landscape in America is becoming increasingly complex. Rich Fuerstenberg, senior partner at Mercer and a parental leave expert, cited a few reasons for this. There are some states that provide some sort of PTO as a result of disability, and a subset of those states (i.e. New Jersey, Rhode Island, California, New York in 2018) have also adopted a paid family leave component to these PTO laws.
No matter the result of the election, one thing that could happen is that more states start to pass their own new laws. Eventually corporate America will get to the point where, regardless of political leaning, they might support a single federal program, Fuerstenberg believes, rather than multiple different state and local programs.
“I can see even employers who are generally opposed to government mandate [preferring] a federal mandate over 15 different state mandates,” he said. “So there’s an unpredictable factor there that could tip someone who would otherwise be an opponent.”
That being said, paid family leave is prominent in Clinton’s campaign, noted Fuerstenberg. He predicted that, although the degree of success is hard to speculate, she’ll push her PTO legislation forward.
Clinton’s paid family leave policy offers 12 weeks of paid family and medical leave for a new baby or ill family member. It includes paternity leave as well as maternity leave. She also wants to ensure an employee gets at least two-thirds of their wages while on leave.
In September, Trump released his parental leave policy, which would offer six weeks of paid maternity leave. This is an improvement over his previous stance on the issue, which was none, although certain news organizations have criticisms of his new policy. The plan offers maternity leave but not paternity leave, even though today 40 percent of women are the breadwinners of their families. Also, as it does not apply to working fathers, it would therefore exclude gay couples.
A 21st Century Law
When it comes to the Fair Labor Standards Act, no one can disagree that the threshold amount for salaries to be exempt is “woefully” low, said Steve Whitehead, partner at law firm Taylor English Duma and chair of their employment and labor relations practice.
“One thing, which I think is desperately needed, that I think would happen in a Republican Congress, is to overhaul the whole law and bring it into the 21st century,” Whitehead said. “It could use a vast overhaul that would catch it up to the current economy.”
The principles of the FLSA, which was passed in 1937, are based on an economy that doesn’t exist anymore or account for the features of the information economy, he added. He gave the example of the outside sales exemption, which refers to a person going door-to-door to sell their products. Meanwhile, people may use the same sales process on the internet, but they are not exempt from overtime.
“Why should one mode of selling be exempt but another not?” Whitehead said. “There’s no basis on which to make that distinction other than one person’s clicking, the other one’s walking.”
The Immigration Debate
The Democrats and Republicans have very different views on what to do with illegal immigrants. Whitehead contends that with a Democratic president and Congress, there would be a large influx of immigrants, and with the Republican president and Congress, we’d see a more measured approach. Both parties recognize that there must be reform, Whitehead said, and this is something that we will see much more of once a president is elected.
While immigration into the country is a major point of the debate, a key workplace aspect is the H-1B visa, a non-immigrant visa that allows U.S. companies to hire certain foreign workers with expertise in specialized fields, particularly in engineering or IT.
Trump wants to rewrite the H-1B system, wrote Patrick Thibodeau, senior editor at Computerworld. In July, he commented how Trump wishes to give preference to American workers by raising the wages of foreign workers as part of this reform. Meanwhile, Clinton does not mention the H-1B reform in her platform, but she may be forced to make a move before the election.
“As president, Clinton would be under pressure to take action on the H-1B program,” wrote Thibodeau. “Support for H-1B reform is bipartisan and appears to be growing.”
Andie Burjek is a Workforce associate editor. Comment below, or email at email@example.com. Follow Workforce on Twitter at @workforcenews.