Donald Trump’s recent victory and the Republican victory in the U.S. Senate and U.S. House of Representatives will likely change how the federal government approaches issues such as pay equity and DEI initiatives.
Here are our predictions for how the next four years could play out for employment-related legislation.
Pay equity and transparency could be affected
The Biden-Harris administration was one of the most pro-labor (and pro-pay equity) administrations in recent memory. Committed to closing the gender and racial wage gaps, the Biden administration issued an executive order to advance pay equity for federal employees in January 2024.
We should not expect that same interest in pay equity from a Republican Congress and executive branch. Employees will still have protections under the 1963 Equal Pay Act, which guards against gender-based discrimination in the workplace, but further inroads in pay equity will likely be put on pause for the next four years — at least when it comes to legislation at the federal level.
A Republican administration also likely ends the possibility of a national pay transparency act. While various states have passed pay transparency laws, some pending bills may be challenged by the changing political complexion in state legislatures.
Let’s examine some of these states with pending pay transparency laws to see where they stand:
- In Maine, Democrats maintained control of the state legislature, which means its pay transparency law will likely pass.
- In Michigan, on the other hand, Republicans won the Michigan State House, meaning that its pay transparency law will likely fail.
- In Montana, Republicans maintained overwhelming control of both chambers, and its pay transparency bill will likely not pass.
- In Pennsylvania as well, Republican control of the State Senate will likely quash its pay transparency bill.
In New Mexico, Oregon, and Rhode Island, Democrats control the state houses and governor’s offices, making the passage of their pay transparency laws highly probable. Nevada is another state to watch, with a Republican governor who may not be inclined to sign pay transparency into law if it reaches his desk.
Trump’s Department of Labor (DOL) will likely seek to broaden the definition of an independent contractor.
During the previous Trump administration, the DOL applied an economic-reality test to determine if a worker should be deemed an “independent contractor” or an employee. The Biden administration delayed and withdrew the Trump-era rule that would make it easier for organizations to classify workers as independent contractors.
After a federal court in Texas sided with litigants and reinstated the Trump-era rule, the new, broader definition of an independent contractor remained.
In his second term, Trump and his DOL will likely give businesses even greater leeway in defining workers as independent contractors.
Trump may diminish DEI initiatives
Trump has signaled that he wants to ban DEI initiatives for the federal government and private corporations.
During his first administration, Trump signed an executive order banning DEI training for federal entities, and then extended that order to include federal contractors. While banning DEI training for private companies will be a heavier lift, it’s not outside of the realm of possibility that a Republican legislature and White House will pursue this to some degree.
There may be changes to regulatory agencies
Trump may seek to dismantle federal agencies such as the EEOC, NLRB, and DOL, which oversee discrimination/retaliation claims, union-business relations, and wages/overtime rules.
Even if the Trump administration does not dismantle these agencies, it will likely replace their current heads with Republicans more aligned with his priorities, impacting how the EEOC, NLRB, and DOL operate.
Final thoughts
As Republicans now control both chambers and the executive branch, legislation related to matters such as pay transparency, a national paid leave policy, and an increase in the federal minimum wage will likely be put on the back burner. Private companies will experience less regulatory scrutiny as the federal government returns to Republicans.
But regardless of what transpires in Washington, many states already have pay transparency laws on the books, and certain states (along with public and private organizations) will continue advancing pay equity and transparency. Organizations must continue to focus on these measures to remain competitive in attracting and retaining top talent — whatever party holds power.
