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January 14, 2025

What Hiring Changes Are Likely Coming with the Presidential Handoff?

As the United States prepares for the presidential administration change, the anticipation of shifts in policies and regulations is palpable. These transitions often create significant adjustments to workplace rules, labor laws, and hiring practices that directly impact hiring strategies.

HR professionals must stay informed to be ready for these potential changes. Read on as we examine the hiring areas that will most likely experience changes after inauguration day.

Hiring Changes We’ll Most Likely See in 2025 (and Beyond)

A new administration almost always makes a few changes to employment policies. Some are minor modifications, while others can be complete transformations. In the current scenario, we have a unique insight into what’s on the horizon, since we can pull from the previous Trump administration’s stance.

HR professionals will need to adapt to a list of changes in the upcoming 12-24 months. Let’s dig into the trends and developments employers should be ready for after the inauguration.

Labor Regulations

What we may see: Federal income taxes on tips could be eliminated if Trump makes good on his election campaign promise. He also frequently mentioned making overtime wages tax-free. The incoming administration may also try to make it easier to classify independent contractors, simplifying employer compliance with wage and hour policies.

The Trump administration will also most likely return to the 2021 Fair Labor Standards Act (FLSA) joint employer rule. This sets a higher bar for a joint employer finding, requiring companies to exercise actual control over hiring and termination, supervision and scheduling, maintenance of employment records, or setting of pay rates to be deemed a joint employer. (source)

Workplace Equity

What we may see: President Biden’s diversity, equity, and inclusion (DEI) initiatives may be reformed, revised, and limited.

“We saw during the [first] Trump administration an executive order that sought to ban or limit certain concepts in diversity and inclusion trainings. […] That was repealed by the Biden administration. That executive order was subject to challenge in court,” said Jim Paretti, former senior counsel to the acting chair of the U.S. Equal Employment Opportunity Commission. (source)

Under Trump, the Equal Employment Opportunity Commission (EEOC) may adopt a more conservative approach to enforcing civil rights laws. This could mean:

  • Focusing less on systemic investigations and more on individual claims.
  • Scaling back hardcore enforcement of workplace discrimination laws.
  • Limiting broad interpretations of Title VII of the Civil Rights Act.

Immigration Policies

What we may see: Tightening H-1B visa restrictions, expanding e-Verify, and increasing workplace audits and penalties.

One of Trump’s biggest campaign platforms centered around stemming illegal immigrants from crossing the border. Organizations are sure to feel this focus in several ways.

  • Starting almost immediately, there will most likely be an increase in workplace audits looking for unauthorized employees. (During Trump’s first administration, there were 12,000 audits compared to Biden’s 400 audits.)
  • Currently, e-Verify isn’t required of every organization in every city and state. Prepare for the electronic employment verification software to be mandated in a wider variety of places and across more industries.
  • Homeland Security Investigations (HSI) will start closely monitoring third-party vendor I-9 systems to ensure their audit trails are accurate and complete.

Technology (Specifically AI)

What we may see: The next four years will be crucial to how artificial intelligence (AI) evolves.

  • It’s likely the new administration will appeal Biden’s AI Executive Order that heavily regulated AI.
  • Expect more hands-off AI regulation than the previous administration was pursuing.
  • However, Trump will most likely strengthen AI export restrictions by tightening control rules.

“I think whatever replaces (the Biden order, the AI Bill of Rights that was introduced by executive order in October 2022), if anything does, will probably be less regulation heavy,” said John Villasenor, faculty co-director of the UCLA Institute for Technology, Law and Policy. (source)

What Should HR Do to Be Ready for These Changes?

The answer is one HR has heard many times - get ready to implement new ways of doing things.

HR leaders must prepare for an incoming administration that will immediately alter the current regulations and requirements. Taking proactive steps now will help you stay compliant and maintain workforce stability.

  • Stay informed on policy updates. Monitor changes to labor and discrimination laws as they unfold. Being proactive in understanding new rules allows HR teams to adapt policies and practices in real time.
  • Re-evaluate DEI strategies. Review your DEI programs to ensure compliance with any restrictions or updated training requirements while preserving inclusivity. This can help mitigate risks.
  • Conduct compliance audits. Assess hiring, classification, and compensation practices to ensure alignment with anticipated changes in wage laws or worker classifications.
  • Choose reputable vendors. Partner with trusted vendors for services like background checks, payroll, and compliance tools. Reputable vendors stay updated on regulatory changes, providing HR teams with reliable resources to maintain compliance and streamline operations.
  • Engage legal counsel. Collaborate with labor law experts to anticipate and navigate potential regulatory changes, ensuring all HR actions are legally sound. Legal professionals can provide insights into complex policy shifts, help HR teams interpret new rules, and avoid compliance pitfalls. Proactive legal guidance also maximizes the chances your workplace policies are updated promptly.

HR’s Proactive Agility Can Protect Your Organization

While we may not know the exact specifics, the presidential transition will bring change. HR leaders and business decision-makers must brace for shifts that impact hiring practices, labor laws, and compliance.

Staying informed and adaptable is essential for managing the presidential handoff. Proactive planning and committing to compliance enable your business to thrive.

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