There is no question that the cost of employing someone has increased and will continue to increase in the coming years. Just look at what’s going on....
- The average wage increase in 2016 is projected to be about 2.7%, according to a report from the human resources firm Korn Ferry. This trend is likely to continue.
- A total of 30 states and Washington, D.C., already pay higher minimum wages than what is required under Federal law and data from the Society for Human Resource Management reveals that although the Federal minimum wage remains at $7.25 per hour, minimum wages in individual states have increased more than 6% in 2016. Dozens of cities and states – including New York and California – have approved legislation raising their minimum wages to as high as $15 per hour over the next few years.
- A recent Kaiser Family Foundation report found premiums for popular low-cost plans under the health care law are projected to increase an average of 11 percent in 2017 with the highest increases coming from Portland Oregon (26%), the District of Columbia (21%), and New York City (16%). Other research organizations are also predicting “huge” premium hikes next year.
- New overtime rules from the Department of Labor go into effect on December 1, which will require employers to pay many salaried employees overtime if they are making less than $47,476 per year and satisfy other requirements.
- Although there is no national paid time off legislation in effect, smaller companies are feeling the pressure to expand these policies to keep up with their larger counterparts and certain jurisdictions. Many states and cities are mandating required leave for their employees and some in the private sector. Netflix, for example, provides unlimited paid time off for new parents and LinkedIn offers unlimited (yes, unlimited) paid time off to its employees.
Will the Presidential election change this trend? The answer may surprise you.
Hillary Clinton is a Democrat and it’s safe to say that the Democratic Party platform has traditionally been considered more of a “workers’ rights” party than the Republicans. Clinton’s policies have been consistent with her party.
As I’ve written before, she’s a big supporter of the Affordable Care Act and wants to expand it, even in the wake of rising costs, which she hopes to minimize through more competition and better management. Clinton is supported by most major unions, who are advocating for higher pay raises from their employers. She is on record as supporting a $12 per hour national minimum wage and “wouldn’t be opposed” to a $15 rate. She fully supports the new overtime rule. She not only agrees with President Obama’s (failed) attempt at establishing national paid time legislation, but wants to expand the Family and Medical Leave Act to 12 weeks of paid time off, in addition to the 12 weeks of unpaid leave the law already provides. So there is little question that under a Clinton administration (and assuming Congressional support), most businesses would likely see an increase in their employment expenses.
But what about Donald Trump? As a Republican, the assumption is that he would be against regulations that would require companies to pay their people more. As a businessman, it’s thought that he would be pro-employer and anti-employee. You would think that he would not support Obamacare, a national minimum wage, national paid time off legislation or the new overtime rule.
However, you may be surprised.
When it comes to the Affordable Care Act, and as I wrote here, both candidates are diametrically opposed to one another. Clinton wants to expand the legislation and Trump wants it repealed. Both candidates are proposing measures to improve our healthcare system while constraining costs. Unfortunately, no one seems to truly know if either approach will work and regardless of who controls the White House and Congress, it seems inevitable that healthcare costs will continue to rise for the foreseeable future.
On other employment related matters, Trump has been very tight lipped. He has not publicly opposed a national minimum wage increase. He has been silent on the new overtime legislation. And he is “non-committal” on whether employers should be mandated to provide paid time off to their employees. Yes, he is a Republican. But he is also an employer.
The Trump Organization has more than 22,000 employees. According to Glassdoor, the company offers a very attractive healthcare plan with coverage for dental, vision, life, and disability, as well a Health Savings plan. The minimum wage paid to his workers is above the national average. The company also offers paid time off in addition to sick days and paid leave for working parents and members of the armed forces. Benefits do vary among his properties. But for a man who’s the subject of so much vilification, there are mostly positive things to find online about him as an employer.
And that’s because Trump, like any good businessman, knows that to find and maintain the best people, his company needs to offer competitive pay and benefits. He knows just how important this is to his company’s profitability. His people are truly are his biggest asset. Which is likely why he’s yet to come out against those very policies that his opponent supports. Publicly opposing a higher minimum wage, more paid time off, and increases in overtime pay would not only hurt him politically, but also professionally, particularly when his own company offers these benefits already. Sure, his party may have a problem if he publicly supports these measures. But when has that ever stopped him? Trump is more of a populist than many think.
The takeaway is this: Clinton is absolutely a supporter of measures that would increase the cost of employing people. But I believe Trump is too. And that means you (and I), as employers, better brace ourselves for a continued increase in these costs over the next few years, regardless of who occupies the White House.