4 Potential Changes to Employment-Related Laws and Regulations Under the Upcoming Trump Administration

As the Trump administration prepares for a potential new term, several proposed changes in laws and regulations could significantly impact employers and employees.

This article will summarize 4 proposals discussed in the infamous document known as “Project 2025” (also known as the “2025 Presidential Transition Project”) published in April 2023 that could affect employees and employers.

Project 2025 is not new. It is part of the Heritage Foundation’s Mandate for Leadership series; This series has been published since 1981 and each publication offers specific conservative policy recommendations designed to be implemented by the federal government. Project 2025 was developed by the Heritage Foundation and over 100 conservative organizations. It serves as a comprehensive policy blueprint for a future conservative administration.

Although incoming President Donald Trump has publicly distanced himself from Project 2025, stating he is not familiar with it, his campaign’s “Agenda 47” shares numerous similarities with the project’s proposals. Both agendas advocate for expanding executive authority, restructuring federal agencies, and implementing conservative policies on social issues, immigration, and the economy.

Notably, several contributors to Project 2025 have been appointed to key roles in the new Trump administration, indicating that the project’s recommendations may influence forthcoming policies.

Nevertheless, while Project 2025 provides a blueprint, its implementation depends on various factors, including political dynamics in Congress, public opinion, and judicial review. The administration’s ability to realize these proposals will hinge on its capacity to build consensus and effectively manage the legislative and regulatory processes.

Rollback of Worker Classification Standards under Federal Law

One of the key initiatives outlined in Project 2025 is a proposal to modify worker classification standards under federal law. The author’s stated goal is to provide states greater flexibility in distinguishing between employees and independent contractors. This change could significantly impact California, where stringent laws like AB5 classify most workers as employees to ensure access to benefits and protections.

From a conservative perspective, proponents argue that this proposal could boost economic flexibility, allowing businesses to adapt their workforce to market demands without the financial burden of employee benefits. Advocates contend that it empowers workers who prefer the autonomy of independent contracting, fostering innovation and entrepreneurship. Small businesses could benefit from reduced overhead costs which may lead to job creation and economic growth.

Conversely, critics from the liberal side caution that this measure could undermine California’s progressive labor protections. They argue that reclassifying workers as independent contractors could strip them of critical benefits like healthcare, paid leave, and workers’ compensation. This shift might disproportionately affect gig economy workers, exacerbating income inequality and eroding job security in industries that rely heavily on independent contractors.

Moreover, Project 2025 assumes the position that employees and employers have equal bargaining power. In some situations, this may be the case. However, if the labor market is not in a hiring phase or a person’s job is easily replaceable, the bargaining power of the employee is not very strong. Especially if the employee is the sole breadwinner of their family.

The likelihood of this proposal’s implementation is moderate, given its alignment with broader deregulation goals. However, California’s strong labor unions and legal precedents make state-level adoption contentious.

*We estimate a probability of implementation within the next two years at about 60% with localized resistance delaying and probably preventing full adoption in California.

Repeal of OSHA’s Expanded Workplace Safety Rules

Project 2025 also includes a proposal to scale back recent expansions of Occupational Safety and Health Administration (OSHA) regulations. These regulations were designed to address modern workplace risks, including ergonomic injuries (i.e. carpal tunnel, etc.) and pandemic-related health concerns. California, which enforces its own robust safety standards, would face challenges adapting to this federal rollback.

Supporters of the conservative viewpoint argue that repealing overly prescriptive safety rules reduces regulatory compliance costs for employers, particularly in industries like agriculture, construction, and manufacturing. They believe this allows businesses to allocate resources more effectively and focus on innovation rather than bureaucratic red tape. Proponents assert that existing state-level safety measures are sufficient to protect workers without additional federal mandates.

From a liberal perspective, opponents warn that such a rollback could endanger workers’ health and safety. They highlight the critical role OSHA standards play in preventing workplace injuries and fatalities, emphasizing that weaker regulations could disproportionately harm vulnerable populations such as low-wage and immigrant workers. Additionally, they argue that reducing federal oversight may create inconsistencies in workplace safety across states, undermining national worker protections.

Given California’s independent enforcement of workplace safety through Cal/OSHA, the immediate impact of this proposal might be muted within the state. However, federal rollbacks could weaken funding and support for state programs.

We predict a 70% likelihood of implementation of scaled-back OSHA rules being implemented federally, though California is expected to retain stricter standards, mitigating the effects locally.

Overtime Laws – Working Families Flexibility Act

The “Working Families Flexibility Act,” as proposed in Project 2025, seeks to amend the Fair Labor Standards Act (FLSA) to allow private-sector employees the option of receiving compensatory time off, or “comp time,” in lieu of monetary overtime compensation. Under this proposal, employees would accrue one and one-half hours of comp time for each hour of overtime worked, with a maximum accrual of 160 hours. The arrangement would be voluntary, requiring a prior agreement between employer and employee, and employees could choose to cash out accrued comp time.

From a conservative perspective, the “Working Families Flexibility Act” is seen as a practical solution to enhance workplace flexibility and empower employees with more control over their time. The proposal aligns private-sector policies with the benefits already available to public-sector employees, such as compensatory time off, fostering uniformity and fairness across industries.

Conservatives argue that by allowing employees to choose between overtime pay and extra time off, the Act supports individual autonomy and accommodates diverse needs, particularly for working families seeking a better work-life balance. Additionally, the policy is viewed as a way to reduce financial strain on businesses by offering an alternative to overtime pay, potentially boosting employer-employee collaboration. However, conservatives also acknowledge potential administrative challenges, as employers may face complexities in managing comp time accruals and ensuring compliance with both federal and varying state laws. Nonetheless, they emphasize the voluntary nature of the arrangement, asserting that it provides meaningful choices without imposing mandates on employers or employees.

From a liberal perspective, the “Working Families Flexibility Act” raises concerns about its potential to disadvantage workers, despite its stated intent to offer more flexibility. While providing employees the option to choose between overtime pay and compensatory time off appears beneficial, liberals argue that it may lead to subtle coercion, where employees feel pressured to accept comp time over monetary compensation due to employer preferences. This could disproportionately impact low-income workers who rely on overtime pay for immediate financial needs.

Additionally, there are fears that employers might impose restrictions on when and how employees can use accrued comp time, undermining the intended flexibility. Liberals also caution that the Act could dilute longstanding labor protections under the Fair Labor Standards Act, creating an uneven playing field where employees might unknowingly forfeit their rights. Despite these concerns, liberals recognize the potential for greater work-life balance if adequate safeguards are implemented to ensure genuine employee choice and protection against misuse.

In California, state labor laws are generally more stringent than federal regulations, particularly concerning overtime and wage protections. California mandates daily overtime pay for hours worked beyond eight in a day and double time for hours exceeding 12 in a day, which is more generous than federal standards. If the federal “Working Families Flexibility Act” were enacted, its applicability in California would depend on whether it preempts state laws.

Considering the political landscape and historical debates surrounding similar proposals, the likelihood of the “Working Families Flexibility Act” being implemented in some form within the next two years is approximately 40%. This estimation accounts for potential legislative hurdles, varying state labor laws, and differing political priorities at both federal and state levels.

Elimination of “Disparate Impact Theory” in Discrimination Cases Under Title VII of the Civil Rights Act

Project 2025, starting on page 582, proposes eliminating the “disparate impact” theory in federal civil rights enforcement. This legal doctrine addresses policies that, while neutral in wording, disproportionately harm protected groups such as racial minorities or women. By removing this theory, only intentional discrimination would be actionable under federal law, excluding claims based solely on adverse effects.

If implemented, this change would primarily affect federal civil rights enforcement. However, California’s Fair Employment and Housing Act (FEHA) independently recognizes disparate impact claims, allowing individuals to challenge employment practices that disproportionately affect protected groups without requiring proof of intentional discrimination.

Therefore, even if federal protections are reduced, California employees would retain the ability to pursue disparate impact claims under state law.

Proponents argue that eliminating disparate impact claims would reduce burdens on businesses and educational institutions, allowing for more efficient operations without fear of litigation over unintentional disparities. They contend that focusing solely on intentional discrimination upholds individual accountability and prevents unwarranted accusations based on statistical imbalances.

Opponents assert that removing disparate impact protections would undermine efforts to address systemic discrimination, as many discriminatory effects arise from seemingly neutral policies. They believe that retaining the disparate impact standard is crucial for promoting equality and protecting marginalized communities from indirect discrimination.

Given the current political climate and the complexity of amending established civil rights frameworks, there is approximately a 30% chance that proposals to eliminate the disparate impact theory at the federal level will be implemented within the next two years.

However, even if implemented at the federal level, the change would not override California’s state laws, which continue to uphold disparate impact claims.

Conclusion

These proposed changes illustrate the ideological divides shaping the nation’s policy landscape. While proponents emphasize economic growth, deregulation, and individual freedoms, opponents highlight concerns over inequality, environmental sustainability, and worker protections. As these developments unfold, they will undoubtedly influence a wide range of stakeholders, from consumers and workers to business leaders and policymakers.

* The likelihood of implementation was assessed by considering several key factors: political feasibility, economic and social context, legislative dynamics, and public opinion. These percentages integrate the balance between advocacy pressures, political division, and the urgency of addressing energy needs within the next two years.