At our recent global compensation, employment, pensions and governance webinar, we featured a panel of employment and compensation lawyers from various jurisdictions who discussed what employers can expect following the recent U.S., U.K., and EU elections. Our team explores the significant upcoming employment law changes after recent elections, emphasizing diversity and inclusion as well as reclassification. See below are our key takeaways.
The webinar moderated by Inge Vanderreken, the discussion features John Cannon, Arnold Keizer, and Gordon Bartlett.
Major employment law developments following recent elections
U.K.
The Employment Rights Bill is huge and all-encompassing and is likely, in time, to shift workplace dynamics. While it's described as "pro-worker and pro-business", the balance undoubtedly lies in favour of workers, not least because they will be better protected in many areas, and businesses will face increased costs and a higher compliance burden.
EU
The new European Commission has taken Draghi's heed in announcing a 'Simplification Revolution'. First port of call: sustainability legislation. Simplification does not, however, equal lowering of requirements.
We expect less legislative developments from the EU in the coming five years. Focus is on tackling skills and labour gaps and enhancing social dialogue.
U.S.
Many Biden administration initiatives (e.g., FTC ban on noncompetes, the proposed expansion of the category of "non-exempt" (i.e., overtime eligible) employees under the Fair Labor Standards Act (FLSA), and ESG investment rule of the Department of Labor (DOL)) have been stayed or delayed by conservative Federal court before the election. All these challenged rules are opposed by the incoming Trump administration, which will cease defending them in court and likely will rescind them as soon as they can.
The Trump administration will rescind Biden administration guidance from the Department of Labor permitting consideration of ESG factors in pension investment, and also revoke the so-called "fiduciary rule."
It is unclear precisely what stance the Biden administration will take on organized labor, as prominent supporters are very anti-union although the nominee for secretary of labor is pro union and Mr. Trump had considerable support in the election from union members. The proposed PRO Act (Protecting the Right to Organize Act) is unlikely to be enacted.
DE&I
U.K.
The combined effect of the reforms in relation to harassment is significant, and a review of workplace measures to mitigate against the risks of sexual harassment in the workplace should be very high on all company agendas.
EU
Remains front and centre of boards. Implementation of Pay Transparency Directive by mid-2026 requires employers to start preparing now to ensure disclosure obligations are met. Expect more litigation.
U.S.
Following the Supreme Court's ruling in SFFA v Harvard, affirmative action (i.e., "positive discrimination") in the private sector is under attack via threats from conservative lawmakers, litigation, shareholder proposals, and publicity campaigns. Due to these pressures, many corporations have abandoned affirmative action and modified DEI programs, or at least publicized them much less.
Although the Biden administration's Equal Employment Opportunity Commission (EEOC) continues to support the targeted remedial and temporary use of affirmative action by employers, the Trump administration will abandon that support, and may even prohibit the collection and reporting to the EEOC of racial and other workplace demographic data by employers.
Reclassification
U.K.
The Government's reforms in this area will require significant consultation and will likely be difficult to implement in practice. However, in the long run they could be beneficial in terms of reducing worker status litigation.
EU
Recent adoption of Platform Directive is not expected to be a reclassification gamechanger. National developments will have more impact. The direction is clear.
U.S.
The Biden administration rescinded a prior Trump administration FLSA rule that had made it easier for workers to be classified as independent contractors. With the objective of extending the legal protections afforded employees under the FLSA to more workers, earlier this year the Biden administration adopted a new worker classification rule under the FLSA. The incoming Trump administration will rescind the new rule and likely reinstate the prior Trump rule.
Although the Trump administration will seek to make it easier for gig workers to be characterized as independent contractors under the FLSA, it should be noted that state law is important in this area and "blue" states will likely continue seeking to extend employment status to more workers.
What's coming next?
U.K.
This is just the beginning of a period of significant upheaval for employment law in the U.K..
EU
Tackling the "always on" culture: right to disconnect is making headways outside first-mover France. Legislative developments on-going or announced in Netherlands, Italy, U.K. and by the European Commission.
Will social partners play their role in addressing the productivity gap, e.g. through collective bargaining?
U.S.
More setbacks for corporate DEI programs, less facilitation of labor organizing efforts, and fewer protections in the workplace for LGBTQ+ workers and women's reproductive rights.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
