We're only a few days away from the Presidential Election, and this past campaign season has been a wild ride. We've talked about everything from firing Big Bird to "binders full of women" - but where do the candidates stand on compensation issues?
Aside from some campaigning about the gender pay gap, compensation has taken a back seat to the mathematics of tax plans, foreign policy successes and failures, and job creation strategies. The outcome of the elections - both Presidential and Congressional - could have sweeping implications for the regulatory climate of federal agencies. This, in turn, will have an impact on how companies pay their employees.
For example, the future of the Wage and Hour Division's "Right To Know Under the Fair Labor Standards Act" depends on who wins the Presidential election. "Right To Know" would require employers to disclose their classification of individuals as exempt or non-exempt employees or independent contractors. Employers would also have to explain the implications of their particular classification decisions to workers. Employers would also have to provide information to employees regarding how their pay is calculated.
If President Obama is re-elected, "Right To Know" is likely to be passed and will become a final regulation in early 2013. On the other hand, if Governor Romney is elected, "Right To Know" is likely to die. This is the relative fate of much of the currently proposed legislation.
Generally speaking, a second term for President Obama means more regulation: more wage and hour regulation, more regulation for federal contractors from OFCCP (let's not forget that the compensation data collection tool is still on the table), more regulation on how employers deal with differing employee salary histories and demands (i.e., The Paycheck Fairness Act), etc. These regulations could prove burdensome to employers, but they also could provide protections for vulnerable workers and help ensure a level playing field for employers who are following the laws. The National Labor Relations Board will continue to play a significant role in shaping the workplace of the 21st century, and the EEOC will remain on the forefront of worker protection.
In contrast, a Romney Administration will likely take a very hands-off approach. The role of worker protection agencies like the Wage and Hour Division and OFCCP will be reigned in, along with significant changes at the National Labor Relations Board in terms of policy and enforcement.
And let's not forget about the Affordable Care Act. A second term for President Obama means that the ACA will be rolled out as planned. Governor Romney has promised that on day one of his presidency, he would act to repeal Obamacare; he also said that he would keep some key provisions involving pre-existing conditions and young people. Mr. Romney's ability to repeal Obamacare depends on a variety of factors, including the post-election composition of Congress (yes, there ARE Congressional elections taking place too!)
I'll leave it up to you to decide where you stand with respect to government regulation of the workplace... after all, it's YOUR choice, and nobody (not even employers!) should be telling you how to vote.
The bottom line is, we all have a lot riding on what happens next Tuesday. Everyone has to do their part: educate yourself on the candidates and the issues, and get out there and vote!
Stephanie R. Thomas is an economic and statistical consultant specializing in EEO issues and employment litigation risk management. Since 1999, she's been working with businesses and government agencies providing expert quantitative analysis. Stephanie's articles on examining compensation systems for internal equity have appeared in professional journals and she has appeared on NPR to discuss the gender wage gap. Stephanie is the founder of Thomas Econometrics Inc., the host of The Proactive Employer radio show, and author of the upcoming book Compensating Your Employees Fairly: A Guide to Internal Pay Equity. Follow her on Twitter at proactivemployr.
The impact on compensation regulation will be interesting. The real question is why did anyone feel this regulation was needed?
Any new regulation is bound to be flawed, sometime s critically so. Unfortunately, simply rolling back and cancelling regulations does not address the core problem that brought the regulation to the forefront.
A second Obama term would also likely bring higher taxes for many long-term or stock-based forms of compensation. Many of those taxes would put us back at the rates that existed during the boom of the mid and late-1990's.
I will not predict if the new taxes will move us toward our not so distant glory years. I will also not make any predictions on whether the new regulations will fix the underlying problems.
I will state this. I will not be voting with my "compensation" hat on. Instead I will vote with my "American" hat on. Compensation professional will find a way t work around any new rules (we always do) Companies will continue finding the money to pay employees (they have to).
Posted by: Anonymous | 11/02/2012 at 03:02 PM