Volume 40,   Issue 2                             February  2005


Bush's Second Term
    Are Big Changes Ahead for Employers?

by David L. Barron

From a labor standpoint, President George W. Bush’s first term was one of the most pro-business administrations in recent decades. One of Bush’s first acts as president was to sign legislation prohibiting the Occupational Safety and Health Administration from implementing controversial ergonomic regulations. Similarly, at the end of Bush’s first term, the Department of Labor successfully implemented the most sweeping changes to the country’s overtime laws in more than 50 years.

With a more convincing victory than four years ago, it is likely that the Bush administration, with the aid of a stronger republican majority in Congress, will build on this agenda. Described below are some of the areas that are most likely to see significant legislation, and a preview of the dramatic changes that may take effect in the next four years.

Building upon the victory in the fight over new overtime regulations, it is likely that the administration will push for compensatory time off (comp time) in lieu of overtime for private employers. Comp-time has long been available in the public sector, but is currently unlawful for private companies except in very limited circumstances. Both businesses and employees have clamored for the increased flexibility afforded by comp-time. However, organized labor has fought proposed legislation on the grounds that it would take away overtime income from working families. The sticking point, thus far, has been determining who will have the power to elect overtime pay or compensatory time off, the employee or the company. 

Minimum Wage
Another issue almost certain to be raised in the next four years is increasing the minimum wage. The baseline wage has not been increased since 1996 and currently stands at $5.15 per hour. Democrats in Congress have been pushing for an increase in the minimum wage to the $7 range, a measure solidly opposed by the Bush administration. Look for a compromise on the minimum wage.

Immigration Reform
After the election in 2000, immigration reform was at the top of the list for the Bush administration. 9/11, and the subsequent war on terrorism, swept this issue off the table. Now that the country has somewhat regained its sense of security, it is almost certain that Bush will aggressively pursue some sort of immigration reform.

In fact, it is no coincidence that outgoing Secretary of State Colin Powell’s first foreign trip after the election was to Mexico to meet with its President Vicente Fox. Fox faces a presidential election in 2006, which is the same year as the mid-term elections in the United States. Hammering out significant reform could be a boon to politicians in both countries, and will be at the top of the to-do list in 2005.

That said, don’t expect another round of amnesty like in 1986. Instead, expect “amnesty light,” which will provide temporary guest worker cards to immigrants, and a path to citizenship over time. For employers, such reform measures will raise a number of serious questions. If millions of employees change immigration status, who will bear the cost of filing necessary paperwork, the employee or the employer? Will the work authorization cards be specific to an employer, similar to those authorization cards already allowed under the immigration laws? If portability is difficult, this could provide employers with greater leverage over employees and dramatically decrease turnover. On the other hand, such a process might have minimal impact if immigrant workers decide that it is easier to work under a fraudulent identity (and have the freedom to switch jobs), than to work legally under a temporary worker card, but be bound to a single employer.

Health Insurance
For many employers, increases in health care costs are approaching the crisis level. Putting aside the rising costs to businesses, disputes over who should bear the increased costs have led to even greater conflict associated with strikes, work stoppages and union campaigns.
Unfortunately, the next four years will likely bring more of the same. Dramatic changes to the country’s health care system, such as those proposed by then Democratic presidential candidate John Kerry, were a non-starter. With the aging work force, and the accompanying burden on the health care system, the problems will likely get worse before they get better.

Although there may be some tinkering around the edges, prudent employers should not expect much help from the government. The best bet is to be proactive, and aggressively seek out discounts and creative means of involving employees in managing health care benefits.

Employers should also be on the lookout for the expansion of tax credits, and health savings accounts as a means of offsetting some health care costs. 

Employers can expect Bush’s second term to be a productive one in the realm of labor relations, and one that will likely produce further regulatory changes. The only caveat is that no one can predict the future during wartime. Another attack would push all these issues to the sidelines. Moreover, in recent history, second terms have lent themselves to controversial distractions. The impeachment of Clinton, Iran-Contra and Watergate all took place in second terms. Barring a similar crisis, employers should see major changes ahead. 

The Author:
David L. Barron is an attorney at Epstein Becker Green Wickliff & Hall P.C. based in Houston

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