Wage and Hour Legislative Horse Trading -- A Post-Election Prediction

“The further a society drifts from truth, the more it will hate those who speak it.”

--George Orwell 

The truth is that progress often finds a middle path in a democracy. Now that the dust has cleared in the aftermath of the 2018 election, the following are my thoughts about what it means for the wage and hour field.

Obviously, with divided party control of Congress, and Mr. Trump in the Presidency, deadlock is one outcome. That favors the status quo, which would mean no major changes are in the offering either way. That may mean, of course, that we will have continued gridlock while debating the same issues through the 2020 Presidential campaign. Meanwhile, most of the ferment and experimentation in the wage and hour world will devolve to the states, as has been the case for more than a decade. 

Or maybe not. I am betting there will be several deals while Trump “triangulates” between his conservative caucus and the new Democratic party majority in the House of Representative. That would mean progress on a small number of fronts is likely.

First, I would expect a modest increase in the minimum wage. This fits in with Mr. Trump’s pitch to his working class base, and is Democratic party orthodoxy on the left. Of course, I am not predicting exactly a $15 an hour national minimum wage standard like the Democrats want. But I am betting something around $9 or even $10 an hour with a staggered bump up over a short period nationwide is possible. That may not be compelling for the Democrats, since most of the “blue” states have already enacted enhanced higher state minimum wages. Exactly what level of minimum wage increase might bring the Democrats on board is something I can’t tell you.

Of course, Trump will want something in return. Historically, it has been tax credits for business that are traded for a higher minimum wage. But the Republican got most of that done in the last tax bill. I am guessing it will be some kind of farm aid legislation to assist Trump’s rural political base and ameliorate the impact of his trade policies. So, look for a deal on a higher Fair Labor Standards Act (“FLSA”) minimum wage in the next two years.

The other obvious area of triangulation is an infrastructure bill. Trump badly wants to build a “wall” on the Mexico border. With Democratic control of the House, if he wants a wall, he will have to compromise somewhere to get Democratic votes. Up until now, however, he has only proposed on a tepid $200 million infrastructure bill with most reliance placed on privatization or federal/private partnerships. This has been a nonstarter so far. But it has long seemed obvious that some fig leaf of border security spending combined with an enhanced federal infrastructure commitment, at least for our crumbling roads and bridges and airports, is something that is within reach. This will prompt a burst of public works projects, increased Davis-Bacon Act compliance investigations, and also help solidify Trump’s hold on working class voters. And Trump was a builder, at least before licensing his name and promoting his brand preoccupied his time. So infrastructure is a natural area of interest for him. At some point, he will turn to public works to etch his legacy in the infrastructure of the nation.

The last place of mutual legislative interest seems to be prescription drug prices. How that runaway train gets fixed has yet to be determined. But it is a subject Mr. Trump campaigned on, and he now likely recognizes that private jawboning of pharmaceutical companies to hold the line on price increases has not been enough.

As to what else labor relations wise happens, I see a couple of possibilities.

First, the impending end of marijuana as a Class 1 illegal drug, and the departure of Attorney General Jeff Sessions, could lead to the loosening of the Drug Free Work Place testing for that substance. At some point marijuana testing of workers will disappear, as it becomes a legal drug for adult use.

I also see room for a Federal family leave law, which would fulfil a Trump campaign promise extracted by his daughter. And Trump likes to say that he delivered on his promises. In addition, family leave gives Republicans something to talk about with suburban Moms who proved so problematic for them in the mid-term election. It thus presents a clear lane for bipartisan lawmaking.

I see a National Labor Relations Board (“NLRB”) that will roll back many of the more “progressive” (i.e., labor friendly) rulings of the past.

And I see a small dollar increase in the FLSA Part 541 salary basis test, albeit nothing along the lines of what Obama unsuccessfully tried to push through as he ran out of time.

And, finally, I see further conservative consolidation of control over the judiciary, and the reemergence of judicial conservative activism of the likes last seen at the start of the New Deal. That is what the increased Republican majority in the Senate means. If you think the courts had to ignore precedent and overreach in striking down the Obama salary basis regulations, that is likely a small preview of what is yet to come if the Democrats claw back Executive control.

Otherwise, divided Govenment is generally government by inaction.