by Dave Mount, Westaff
Managers hate uncertainty, even if it’s a potential ally. The events of this past fall have made human resources management a minefield of uncertainty.
First, let me review what is certain:
• The minimum wage in Vermont will be raised by 40 cents per hour to $10. According to the Wall Street Journal, the increase affects 3.3 percent of Vermont’s work force or about 10,000 people.
• Vermont will implement a new paid-sick-pay law, mandating that most employers provide sick pay to their employees. (For more information on this, go to www.BusinessPeopleVermont.com/2016/cc_mount0616.html and read my article from June 2016.)
• There will be a change in the overtime pay rules and thresholds for paying overtime.
• There will be substantial changes to Obama Care (the ACA).
The last two items on the list are where the uncertainty comes in.
The overtime ruling by the U.S. Department of Labor raised the threshold for overtime pay to $47,476 from $23,660 — about double. The proposal had been under consideration for some time and many companies had planned for the change. Some wages were raised and some others were left the same, as managers budgeted for more overtime pay and better scheduling of their human resources.
Then two things happened that have caused the uncertainty. The first was the November election. The new administration will be much less apt to make regulations than the old. Then, on November 21, a federal judge in Texas issued a temporary restraining order postponing the change until a lawsuit is heard.
Where does this leave us? My prediction is that there will be a change, but it will not be as much as the original proposal. With a new secretary of labor coming in and changes to the various rule-making boards, the overtime proposal will be tamed in such a way as to satisfy the plaintiffs in the Texas lawsuit and to provide an overhaul of the existing rules. The upshot? Continued uncertainty.
Another area where we will have uncertain outcomes is the Affordable Care Act (ACA). The new president has promised to repeal and replace it. Vermont’s new governor has promised to change the Vermont health care exchange system. So, there will be substantial changes in the next few years in the way healthcare is procured. More change; more uncertainty.
Experts have predicted that changes to the ACA will take some time — perhaps two years. The President-elect has conceded that parts of the ACA are important and that he will not change them. He was referring to the pre-existing conditions sections of the act and the provision allowing children up to 26 years of age to remain on their parents’ health insurance. But other parts of the act will be changed.
The ACA makes health insurance purchase mandatory for most people. The penalties for not having health insurance increase dramatically in the next few years. I believe that the mandatory nature on health insurance and the dramatic penalties will continue. In fact, the individual penalties may not be high enough to force people to buy insurance.
Frequently, a change in administrations will create the kind of uncertainty that management dislikes. We managers like to plan on predictability. After all, the marketplace is unpredictable enough without adding the regulatory environment to the mix. Now, we have entered an era when the whole culture of regulation is being turned upside down.
About half of the regulations that business lives under in the HR realm come from the state. I do not expect there to be as much upheaval in the state as the federal. But in both cases, boards and commissions have a great deal of authority. They issue rule-change drafts well in advance. Be aware of them and make your voice heard. •
Dave Mount is the founder of Westaff in Burlington.