A Presidential Puzzle

A lot is at stake for HR on Nov. 8 -- but many of the pieces are missing in this year's unusual race for the White House. Here's what we know.

Friday, September 2, 2016
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Chief HR officers usually have a pretty good idea how to plan for the result of a presidential election. The two major political parties have well-defined policies. And by this late stage of the campaign, candidates typically have laid out their intentions in excruciating detail.

Not this year. Experts and business lobbyists say it's hard to strategize with the unpredictable Donald Trump as GOP nominee. By taking positions that defy the party's traditional agenda on some issues and by sending varying messages on others, his campaign has many business leaders unsure what to expect if Trump wins. Those in HR are no exception.

After Nov. 8, "It's either a continuation of the trends of the last eight years -- or a pretty big question mark," says Dan Yager, president and CEO of the HR Policy Association.

Democratic nominee Hillary Clinton has a track record and detailed policy positions. As for Trump, Yager says, "the only thing we know is that he's a businessman -- he should have a pretty good idea of the issues that businesses face." Apart from that, "it's anybody's guess."

HR consultant Pamela J. Green has heard similar sentiments. "There's a lot more uncertainty with this election," says Green, who has led training on strategic planning for the HR Certification Institute. She urges flexibility: Top HR executives "have got to be doing scenario-planning -- best case, worse case."

The heart of the puzzle is Trump's unconventional campaign. On some issues, such as healthcare, he echoes the views of many in the GOP. On others, such as international trade and offshoring, he has staked out populist positions that many business leaders oppose. And on most other policy matters critical to HR, from the federal minimum wage to pay equity for women, he has offered various opinions -- or said nothing at all.

Among the most critical unanswered questions: What kind of appointees would a President Trump favor for regulatory bodies such as the National Labor Relations Board, Equal Employment Opportunity Commission and Securities and Exchange Commission? What would Trump's Department of Labor look like?

Those appointments are key, especially if partisan gridlock in Congress continues, as many expect. "We're likely to see more of a regulatory regime than a legislative one," Yager predicts. Regardless of who wins the White House, "we'll continue to see more executive orders."

Immigration Tops the List

Of all the federal policy areas important to HR, immigration may be the most highly charged in this election.

As part of the America-first theme of his campaign, Trump's signature pledge has been for strict enforcement of immigration laws -- most notably mass deportation of 11 million illegal immigrants and a wall that he proposes to build, at Mexico's expense, on the southern border. He also supports a broader mandate for employers to use E-Verify.

Clinton's campaign has focused on concerns of immigrant families, pledging to renew efforts toward comprehensive immigration policy reform that would include a path toward citizenship for millions of people in the country illegally.

Employment-based immigration programs such as H-1B visas and company-sponsored green cards have attracted less attention from the campaigns. But Michael Aitken, vice president for government affairs at the Society for Human Resource Management, thinks the outlook is not good for employers that need more visas to recruit or keep talented immigrant workers.

"Regardless of who's president, there is a general tougher look at the employment-based visa programs, particularly H-1Bs," Aitken says. There's already bipartisan support for increasing requirements on sponsoring companies, he says.

Indeed, Trump favors higher bars for companies to sponsor immigrants, including an increased minimum wage for workers recruited from abroad. A campaign policy statement says this "will force companies to give these coveted entry-level jobs to the existing domestic pool of unemployed native and immigrant workers in the United States, instead of flying in cheaper workers from overseas."

Over the course of the campaign, however, Trump has shifted positions on employment-based visas. "I'm changing. I'm changing. We need highly skilled people in this country . . . we absolutely have to be able to keep the brain power in this country," he told Fox News anchor Megyn Kelly in March.

After that debate, however, he shifted back to his official position, issuing a statement promising "an absolute requirement to hire American workers first for every visa and immigration program. No exceptions."

One expert says Trump's evolution on the issue may not be over. The key question on employment-based immigration is "where he's going to be as we move toward the general election," says Rebecca Peters, director of government affairs for the Council for Global Immigration, a SHRM affiliate. It's still unclear "if his positions are going to change," she says. "We don't know that."

As for Clinton, Peters sees some reason to hope the Democrat would at least help employers get more green cards to keep top foreign graduates of U.S. universities who already are in the country on student visas.

If Clinton bases her promised immigration-reform legislation on a bill that stalled in the Senate in 2013, "that would be an excellent starting point for the green-card debate," Peters says. Clinton also has recognized the problem in a campaign policy statement that includes "stapling" a green card to graduate degrees obtained by talented immigrant students. "She wants to help retain those folks," Peters says. "That's a very positive thing."

Different Paths on Healthcare

The candidates are equally divided on another hot topic for HR departments -- the future of healthcare.

Clinton's campaign promises she would "defend the Affordable Care Act and build on it to slow the growth of out-of-pocket costs." Her strategies include tax credits for consumers and unspecified steps to "hold drug companies accountable."

Trump would seek a "full repeal" of the ACA, including coverage mandates for employers and families. He proposes to replace it with policies that would allow interstate health plans, allow taxpayers to deduct premiums, require price transparency, provide Medicaid block grants to states and allow imported drugs.

Trump does favor keeping certain parts of Obama's reform, including a requirement that health plans cover pre-existing conditions and children of plan members through age 26. But his proposals do not explicitly promise to achieve the main goal of the ACA -- ensuring that most families have some coverage.

Steve Wojcik, vice president for public policy at the National Business Group on Health, thinks a President Trump likely would let Congress take the lead on health policy. But Wojcik questions whether the political will is there, regardless of who wins the White House, for a wholesale rollback of the ACA.

Mark Wilson, chief economist at the American Health Policy Institute, which represents large multistate employers, has a similar take.

"The employer community is dealing with the devil it knows right now," Wilson says. "Repealing and replacing the ACA could potentially be another four years of disruption -- I'm not sure anyone's happy with that idea."

By favoring repeal of the ACA, Trump appears to agree with Clinton on one key healthcare issue, however: the so-called Cadillac tax. She would repeal the 40-percent excise tax on employer-sponsored health coverage above certain thresholds, which is now set to start in 2020.

Created to fund other parts of the ACA and discourage rapid growth of health costs, the tax was meant to apply to unusually rich plans. But projections suggest a majority of plans would be hit if employers don't cut back.

How would the candidates replace the revenue? Trump has offered little detail on this and other parts of his healthcare vision. Clinton has said other parts of her healthcare plan would "more than cover the cost of repealing the Cadillac tax." But Wilson worries what that might mean for employers.

"Many of her proposals have focused on helping consumers with out-of-pocket costs," he says. "That raises concerns in the employer community about possible cost-shifting to private payers, such as employers."

Where They Agree

Trump and Clinton have similar positions on three other issues of interest to HR leaders -- though they differ on the details.

Retirement reform: Both support continuing Social Security substantially as it exists now. Clinton has proposed unspecified tax increases on wealthy families to prevent cutbacks in the program as expenses outpace contributions. Trump has been vague about how he would keep Social Security solvent, but supports the program -- bucking GOP tradition in doing so.

Neither candidate has said much about private employer-sponsored retirement plans, notes Robyn Credico, who leads the defined-contribution plan consulting practice at Willis Towers Watson. "The big issue will come down to what their tax policies are," and whether they would favor continuing current deductions to encourage both employers and workers to contribute to 401(k) and similar plans. Recent proposals in Washington threaten to cut deductions to help raise tax revenue.

Credico, based in Washington, says the issue is important to companies -- not just for the sake of employees nearing retirement, but for the workforce as a whole. Without robust retirement plans, workers stay on the job, frustrating younger workers who can't move up and hurting employee engagement overall.

There's a significant impact on employers if people can't retire in a meaningful way, she says.

International trade: Trump has made talking tough about trade a cornerstone of his campaign. He famously defied the views of other business leaders by opposing the proposed Trans-Pacific Partnership, singling out China for particular criticism.

With milder rhetoric, Clinton has taken a similar position, promising to "stand up to Chinese abuses." She also departs from her party leadership to oppose the TPP. But critics question whether she really means it. They note that, as Obama's secretary of state, Clinton was a big supporter of the trade deal.

Offshoring and outsourcing: Clinton and Trump also have sounded similar notes on the question of federal policies to discourage companies from moving operations -- or even their headquarters -- overseas to save on labor costs or avoid taxes.

Trump's tax proposal calls for lowering the federal corporate tax rate to 15 percent "to keep American companies and jobs here at home." He also would pursue a one-time 10 percent levy -- similar to proposals by Obama and others -- on "corporate cash held overseas." Trump also has criticized companies for shipping jobs abroad.

The Clinton campaign says she would "create incentives for companies to bring back jobs to the United States by making America the most attractive location for investment -- and crack down on shifting earnings overseas." She also has proposed an "exit tax" for companies moving their headquarters abroad.

Question Marks Abound

On a raft of other policies that matter to human resource leaders, only Clinton's campaign has offered much detail. In many cases, Trump has, so far, said little that's definitive.

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Overtime threshold: The Labor Department sent businesses scrambling on May 17 by announcing a doubling of the threshold below which most workers qualify for overtime. Clinton issued a statement cheering the move, linking it to a higher minimum wage and other labor-friendly policies that she intends to pursue. "No one who works 40 hours a week should have to raise a family in poverty," she said.

Though other Republicans have denounced the overtime rule, Trump has said little about it.

Family and sick leave: Clinton has made expansion of mandatory leave a cornerstone of her campaign. The candidate promises to push policies that would "guarantee up to 12 weeks of paid family and medical leave." Her plan would guarantee workers at least two-thirds of their regular pay, to be covered "by asking the very wealthiest Americans to pay their fair share of taxes," Clinton wrote in an April 5 opinion essay published by The Baltimore Sun.

Trump's campaign has no policy on family or sick leave. In an appearance on Fox News in October 2015, he suggested mixed feelings: "Well, it's something that's being discussed, I think we have to keep our country very competitive, so you have to be careful [about] it," he said.

Labor unions: Trump has criticized the AFL-CIO and other union organizations for supporting Clinton, but has generally avoided weighing in on top labor issues of the day, including a series of decisions by the NLRB that have advanced union causes.

Clinton also has avoided direct comment on the NLRB. But she has offered generally supportive rhetoric about labor unions. Her campaign says Clinton "will fight to strengthen the labor movement and to protect worker bargaining power."

Federal minimum wage: Trump has said little about proposals to raise the federal minimum wage, and much of what he has said has been contradictory. After declaring in a primary debate last year that he was opposed to an increase because "wages are too high," in May he told CNN he would be "open to doing something" on the issue. In late July, he told reporters that he would favor a raise in the federal minimum wage from $7.25 to $10 an hour, but also reiterated views reflected in the GOP platform, which addresses it with a single sentence: "Minimum wage is an issue that should be handled at the state and local level."

Clinton supports an increase in the federal minimum wage from the current $7.25 an hour to $12, leaving states and cities to set higher minimums. This stance has angered some of her supporters who backed the union-supported "Fight for $15" movement.

Workforce development: Clinton's campaign says she would push a plan to offer $1,500 in tax credits to businesses that provide apprenticeships, with a bonus "for providing opportunities specifically for young people." She has said little more about the topic since proposing the tax credits in July 2015, however.

Trump also has said little about workforce development. As part of the candidate's plan to help veterans, however, the campaign says he would "increase funding for job training and placement services (including incentives for companies hiring veterans), educational support and business loans."

Contingent workers: The rise of internet-based companies such as Uber that match freelancers with consumers has spurred debate -- and litigation -- over whether workers are being exploited. Trump has not weighed into the debate directly, but his proposed tax policy would cut federal income taxes for freelancers to 15 percent.

Clinton has expressed sympathy for workers, but so far has offered few policy specifics. In a July 2015 speech that raised some concerns in Silicon Valley, she said the gig economy is "raising hard questions about workplace protections and what a good job will look like in the future . . . . I'll crack down on bosses who exploit employees by misclassifying them as contractors."

Pay equity: Clinton has made pay equity and equal rights in the workplace a key part of her campaign. Her campaign has released detailed plans to work for passage of the proposed Paycheck Fairness Act, which would require employers to use only factors such as education, training or experience in setting different pay rates.

Trump hasn't directly addressed the proposed pay-equity law. In August 2015, he told MSNBC he supported equal pay but would want to weigh the economic consequences of any policy change. Later that year, he said women deserve equal pay if they "do as good a job as men," prompting critics to charge he was blaming women for disparities. Another twist came on July 21, when daughter Ivanka Trump promised delegates at the Republican national convention that the candidate "will fight for equal pay for equal work."

Transgender policies: Trump criticized the controversial North Carolina law that requires public schools and agencies to allow transgender people only in bathrooms that correspond with their biological sex, largely framing it as a bad business decision. But he later said such decisions belong to states, not the federal government.

Clinton's campaign says "no one should be held back from fully participating in our society because of their gender identity." While some in the transgender community have criticized her for not being more forthright on the issue, she also earned praise as secretary of state for LGBT-friendly policies, including policy changes allowing passports to reflect the holder's gender identity.

On these issues and others, chief HR officers will be watching as campaign season reaches a climax in coming weeks. The two candidates will offer details in debates and policy announcements that may help with planning on some questions. But on many matters, experts say, the future of federal policy may not be clear until well after Election Day.

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