Five Predictions for President Trump’s Second Administration: Employment and Labor

The predictions below address federal law and agency actions, which are not anticipated to impact state and local laws — many of which afford employees greater protections in the workplace.

Prediction 1: The second Trump administration will replace the current General Counsel of the National Labor Relations Board, causing a shift away from new, and more expansive interpretations of the National Labor Relations Act.

Background

When President Biden took office in 2020, he immediately fired the Trump-appointed general counsel (“GC”) of the National Labor Relations Board (“NLRB” or “Board”). This marked the first time a president removed the NLRB GC and sparked a legal challenge that ultimately resulted in a determination that the removal was lawful.

Under the Biden administration, the NLRB and its GC Jennifer Abruzzo advanced interpretations of the National Labor Relations Act (the “NLRA”) that expanded upon employees’ rights to engage in protected concerted activity. This was accomplished through Board decisions (including Stericycle, which overruled precedent regarding what constitutes a lawful handbook policy, and McLaren Macomb, which determined that offering a severance agreement containing certain confidentiality and non-disparagement provisions could violate the NLRA), and guidance memoranda (including those addressing certain non-competition, stay-or-pay provisions, and non-disparagement provisions) that ushered in new, employee-friendly interpretations of the NLRA.

Predictions

We anticipated that President Trump will remove the NLRB’s current GC Abruzzo if she declines to resign. The new GC likely will take a more employer-favorable approach with respect to interpreting the NLRA, and it seems likely that GC Abruzzo’s guidance memoranda that provided broad NLRA protection to employees will be rescinded.

On the campaign trail, candidate Trump indicated his support for right-to-work legislation that would prevent mandatory union membership or dues as a condition of employment. He also signaled that he would veto the Protecting the Right to Organize Act (the “PRO Act”), which would expand employee rights to organize and collectively bargain. Although the President-elect’s nominee for Secretary of Labor, Representative Lori Chavez-DeRemer (R-OR) was just one of three Republicans in Congress to support the PRO Act, the passage of that legislation still seems unlikely by a Republican-controlled Congress.

Importance

The addition of a new GC and NLRB members is likely to afford employers the ability to return to certain pre-Biden era labor practices. This may occur sooner than originally expected given a December 11, 2024 Senate vote (49–50) that declined to advance the reconfirmation of NLRB chair Lauren McFerran for a second five-year term. A vote to confirm McFerran would have kept a Democratic majority on the five-member NLRB until August 2026. Now, President Trump will be able to appoint two new Republican board members and designate a new NLRB chairman. With a new GC and a Republican Board majority, we expect the NLRB to take on cases that will allow it to reverse Biden administration NLRB decisions, like Stericycle and rescind GC guidance memoranda that the second Trump administration views as having overstepped the bounds of the NLRA.

Prediction 2: EEOC priorities and interpretations will shift away from the current landscape of LGBTQ+, pregnancy, and DEI protections.

Background

The Equal Employment Opportunity Commission (“EEOC”) — which administers and enforces federal workplace civil rights laws — is a bipartisan Commission comprised of five presidentially-appointed members, including the chair, vice chair, and three commissioners. When a new administration takes over, the chair often resigns or, as was the case in 2020, is fired by the incoming president. However, even with a Republican chair, we do not expect immediate changes in EEOC priorities or guidance, as it will retain a Democratic majority through 2026. Once a Republican majority takes control, we could see a shift with respect to diversity, equity and inclusion (commonly known as “DEI”) initiatives, LGBTQ+ positions, and interpretations as to pregnant worker protections.

Under the Biden administration, the EEOC issued guidance regarding protections under the Pregnant Workers Fairness Act (“PWFA”) for employees with “known limitations” arising from pregnancy, childbirth or related conditions. That guidance interpreted the PWFA to include requirements to provide accommodations for abortions, menopause and infertility. The Biden EEOC also published guidance on post-Bostock protections against discrimination on the basis of sex (including sexual orientation and gender identity) in the workforce. This guidance provided that repeated and intentional misgendering and denying access to workplace facilities that correspond with an employee’s gender identity may be evidence of wrongful discrimination.

Prediction

We expect the current EEOC chair to resign or be fired shortly after the new administration begins. As the only current Republican commissioner, Andrea Lucas seems a likely candidate for EEOC chair.

Commissioner Lucas was the only commissioner to oppose the EEOC’s interpretation of reproductive care covered by the PWFA. In 2022, she used “commissioner charges” (which allow an EEOC member to initiate investigations absent a majority vote) to assert that employers offering abortion-related travel benefits were engaged in discrimination. Commissioner Lucas also disagreed with the EEOC’s post-Bostock guidance regarding gender identity in the workplace as an “assault on women’s sex-based privacy and safety at work” that “impinges on women’s freedom of speech and belief.” In speaking engagements, Commissioner Lucas has emphasized her perspectives on religious freedom in the workplace and a desire for religious accommodations to be analyzed in a manner similar that could change the interpretations of protected religious expression in the workplace.

Following the Supreme Court’s decision in Students for Fair Admissions, Inc. v. Harvard (which held that affirmative action programs were unlawful in higher education), current EEOC Chair Charlotte Burrows took the position that the decision did “not address employer efforts” with respect todiversity initiatives, and that “[i]t remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs[.]” By contrast, Commissioner Lucas warned employers that some current DEI initiatives and programs may already violate the law as those programs must be narrowly tailored to not violate Title VII.

We expect the eventual new EEOC chair (whether Commissioner Lucas or someone else) to attempt to scale back the EEOC’s prior guidance on PWFA and Bostock, support a stricter review of employer DEI programs, and focus on guidance regarding religious discrimination and accommodations in the workplace.

Importance

Once a majority-Republican commission is appointed, proposed EEOC guidance may reflect Commissioner Lucas’ views on LGBTQ+ topics, abortion policies, religion and DEI in the workplace.

Prediction 3: The second Trump administration will revert to the pre-Biden era independent contractor classification test.

Background

On January 9, 2024, the Department of Labor published a final rule regarding the definition of an “independent contractor” under the Fair Labor Standards Act (“FLSA”). This rescinded a 2021 rule from the first Trump administration that applied a six-factor test based on the “economic reality” of the relationship between the company and the worker. The 2021 rule placed the most weight on the nature and degree of the individual’s control over their work and the individual’s opportunity for profit or loss when determining whether the individual was an employee or independent contractor. By contrast, the 2024 rule required the six factors to be applied equally in a “totality of the circumstances” analysis, with no single factor being dispositive.

Predictions/Importance

The second Trump administration likely will revert to the 2021 independent contractor rule from Trump’s first term. In theory, restoring the earlier interpretation of the rule would make it easier to classify an individual as an independent contractor.

Prediction 4: Employer DEI programs may face challenges.

Background

On the campaign trail, Trump promised to “terminate every diversity, equity and inclusion program across the entire federal government.” During his previous term, Trump signed an executive order targeting diversity training programs used within the federal government.

After Students for Fair Admissions, Inc. v. Harvard, there has been an increase in legal challenges to DEI programs, including in the employment context. America First Legal — which is led by Stephen Miller, Trump’s pick for Deputy Chief of Staff for Policy and homeland security adviser — has been one of the principal groups challenging corporate DEI initiatives (including diversity scholarships and the review of diversity when making board decisions).

Prominent Republican figures including soon-to-be Vice President J.D. Vance also have supported measures to prohibit DEI initiatives maintained by employers who receive government funds. In June 2024, Vance introduced the Dismantle DEI Act to eliminate DEI programs in the federal government, rescind executive orders from the Biden administration regarding DEI, end DEI training, outlaw mandatory employee DEI pledges and prevent awarding federal contracts to employers that employ DEI policies.

Predictions

We expect President Trump to sign executive orders to prohibit DEI programs maintained by employers receiving federal funds and repeal Biden’s DEI-related executive orders. However, it seems unlikely that he would break from 60 years of government contracting practices by repealing Executive Order 11246, which requires government contractors to maintain certain affirmative action programs. Nonetheless, we may see policy initiatives that target corporate DEI programs and diversity reporting withing corporate filings.

Importance

Executive orders could impact federal agencies and companies that provide services as federal government contractors or sub-contractors. It remains to be seen whether any executive orders or proposed legislation may impact workplace discrimination and harassment training or policies with respect to private employers.

Prediction 5: The second Trump administration may propose legislation that would eliminate federal taxation on tips and overtime wages.

Background

On the campaign trail, Trump expressed his desire to end taxation of tipped income for hospitality workers. Legislation to this effect was introduced by both parties in Congress in 2024. Democrats introduced the TIPS Act, which would eliminate federal income taxes on tips and abolish the tip credit for tipped employees. The tip credit allows employers to pay tipped employees sub-minimum wages and rely on customer tips to meet the minimum wage requirements. Republicans proposed the No Tax on Tips Act, which would have eliminated federal income taxes on tips but retained the tip credit.

During the campaign, candidate Trump also proposed “end[ing] all taxes on overtime.” This proposal would include elimination of both income and payroll taxes on overtime wages. Time will tell whether this proposal will become a legislative priority for the new administration or Congress.

Predictions

We expect President Trump to support and, if passed by Congress, sign legislation prohibiting the taxation of tips. With the shift to a Republican Congress, we anticipate it will propose an act similar to the No Tax on Tips Act with tax credits remaining in place. We also expect some movement on the overtime tax ban; however, this is not expected early in the second administration, given there has been no proposed legislation on the topic to date.

Importance

Legislation to make tips untaxed would provide non-exempt employees who rely on tipped income with a larger portion of take-home pay. The exemption of tipped wages from income taxes may result in an increasing employers’ reliance on tip credits to pay sub-minimum base pay in order to minimize the amount of taxed wages.