Be My Test Audience: Previewing Trump’s Employment Policies

Law360 has asked me to preview the employment policies of the new president. I have my column mostly written if Clinton wins. Now, with polls tightening, and a deadline for next Thursday, I must think seriously about a Trump presidency. Here are my general thoughts.

Anti-Immigration: This has been Trump’s signature policy stance; but apart from talking tough on a wall and deportation, he hasn’t offered much. Here, then, is a reasonable extrapolation of Trump’s anti-immigration views spelled out as employment policies.

A Trump administration would likely criminalize the employment of unauthorized aliens. This has been tried by several states, foremost, Arizona. That state enacted a sweeping law that criminalized the hiring of unlawful immigrants.

What does that mean exactly? 1. If you knowingly hired this person, you face criminal fines and possible prison time. 2. If you are this person (unlawful alien), you also face criminal fines and prison time. The catch, however, is that you also face expedited deportation.

Few, if any people, were ever criminal defendants in Arizona—even before the Supreme Court struck down the state law as a violation of federal policy. But it led to a large exodus of aliens (called “self- deportation”) and labor shortages—plus rising wages—in agriculture, tourism, construction, and landscaping.

Important to note, the main federal employment law that governs immigration—the Immigration Reform and Control Act—already has a criminal law element. It is rarely used because the same law has a potent antidiscrimination law.

Federal officials usually impose civil fines of $500 to $2,000 on employers and aliens who violate the law. Key to note, imposing a civil fine is much easier for the government than prosecuting the same offense as a crime because the burden of proof is much higher and the cost of holding trials is sky-high. IRCA’s criminal enforcement is typically reserved for human smugglers and forgerers who turn out large quantities of fake IDs.

Paid Maternity Leave: The Trump campaign webpage promises to provide 6 weeks of paid leave to new mothers before returning to work, and to rewrite the tax code to allow working parents to deduct from their income taxes child care expenses for up to four children and elderly dependents. Parents would be allowed to enroll in tax-free dependent care savings accounts for their children or elderly relatives. Employers would be incentivized employers to provide childcare at the workplace, though nothing more is mentioned about what this means.

Close Bankruptcy Loopholes: Trump has famously explained that Hillary Clinton and other political insiders created a tax code that allow people like him to exploit to disadvantage others. If elected, he promised to close those loopholes.

Chapter 11 bankruptcy is a subject Trump knows well. The law allows a company whose debts exceed assets to file for court protection from creditors—a group that usually includes retirees and employees. In a successful restructuring, a bankrupt company discharges debt—in this case, walks from pension obligations. A government corporation called PBGC (Pension Benefit Guaranty Corp.) pays up to $60,136 (in 2015) of a pension plan that is thrown off the corporation’s balance sheet.

How is this a loophole? The company, such as a casino, survives and is recapitalized by new investors. Pensioners lose some of their retirement—everything over an annual payment of $60,136. Who pays for this? Other companies who are solvent and have defined benefit plans. Taxpayers are on the hook for debts that PBGC cannot pay.

Economists call this moral hazard this legal system because it punishes others (good companies; taxpayers) for the bad risks of bankrupt companies. The PBGC would be under Trump’s control. He might order the corporation to “charge back” the bad pension plans to the bankrupt firms. This would close a loophole, allowing Trump to deliver on his promise. But it would mean that many Chapter 11 bankruptcies would fail and would therefore convert to liquidation. PBGC, healthy companies and taxpayers would be off the hook—a good thing. Pensioners would lose everything; and companies that liquidate would lay-off their entire workforce.

End “PC” Policies: Trump’s popularity derives in no small measure from people who are tired of “political correctness.” This concept is generally found in EEOC regulations that prohibit employers from creating a “hostile work environment.” That term applies to sexual harassment, but also racial, national origin, and religious harassment. A Trump EEOC could redline “hostile work environment,” thereby signaling that no federal employment policy prohibits the type of degrading language that Trump has used against women, Mexican, Muslims, and other groups.

English-Only Rules for Contractors: The federal government has an immense proprietary role when it wears its hat as a “contractor.” If you’re thinking that this term applies only to military employers, think again: It covers companies too numerous to mention, but includes firms that sell paper, cleaning supplies, computers, food, clothing, building materials, and so on. It is no stretch of imagination that a Trump administration would require all contractors to ban the speaking of all languages other than English in the workplaces of contractors. Penalties could include debarment.