Project 2025, a vision set forth by the Heritage Foundation, could bring significant changes to corporate governance, finance, and human capital. In this article, we delve into its possible effects on workers’ rights and financial security. Future discussions will cover immigration challenges related to the workforce, opposition to diversity and inclusion efforts, and how federal workforce cuts might influence the broader economy. Understanding these shifts is essential for preparing and protecting tomorrow’s workforce.
The Bureau of Labor Statistics (BLS) indicates that these potential changes could impact about 168.7 million American workers currently employed (BLS Employment Situation Summary, December 2023). Project 2025’s proposals aim to reshape the American labor landscape as we reach a pivotal moment in workplace regulation.
The Deregulation Paradox
Project 2025’s standout features include proposals that may significantly alter worker protections managed by the Department of Labor (DOL), National Labor Relations Board (NLRB), and Equal Employment Opportunity Commission (EEOC). While these changes could prioritize employer profits, there’s a crucial paradox in play: in a service-based economy, a company’s success heavily depends on its workforce. Removing employee protections might inadvertently threaten business profitability.
According to the Government Accountability Office, when worker protections weaken, there is typically a rise in workplace safety incidents, wage and hour violations, and discrimination claims.
DOL: Proposed changes to the DOL include adjusting overtime eligibility, potentially reducing the number of workers eligible for overtime pay. The Center for American Progress suggests these changes could make overtime rules more confusing and easier to exploit by employers. Project 2025 proposes calculating overtime over longer periods, potentially leading to 60- to 70-hour workweeks without extra pay. This could allow employers to deny accrued paid time off, effectively eliminating overtime pay. Jenn Round from Rutgers University notes that this could enable employers to “never allow workers to use their banked PTO, effectively eliminating overtime pay.” This approach facilitated the promise of “no tax on overtime” by making it nearly impossible for workers to earn overtime wages.
- Unfair treatment perceptions can lead to lower motivation, increased disengagement, higher turnover rates, loss of talent, reduced efficiency, absenteeism, elevated stress, and distrust in leadership. These cultural issues can harm an organization’s reputation and lead to customer backlash, as consumers may avoid companies with poor labor practices. These factors impose real costs on businesses.
NLRB: Proposed modifications include leadership shifts to change the agency’s direction and reduce enforcement. Removing ‘card check’ methods for union recognition and the ‘contract bar rule’ could complicate union formation and simplify decertification. Relaxed communication rules might allow management to unduly influence negotiations. Project 2025 could also transform federal civil service jobs into at-will positions, subjecting many federal employees to potential dismissal at the President’s discretion. This overlooks the stability unions offer; despite higher wages, unionized organizations often experience lower turnover rates, reducing recruitment and training costs. A 10% attrition rate can cost a company 20%-30% of total wages.
- Reduced workforce stability could lead to increased turnover, higher recruitment and training costs, loss of institutional knowledge, and decreased innovation. Higher turnover typically aligns with lower productivity and more workplace accidents. Weakening unions and employee representation may further lower morale, increase absenteeism, diminish loyalty, harm organizational reputation, and ultimately reduce sustainable profits.
EEOC: Planned changes to the EEOC include ending all federal DE&I programs, potentially increasing risks for non-white male demographic segments. Reductions in the EEOC’s enforcement capabilities pose risks to businesses, employees, and the economy. The Department of Justice may prosecute private sector organizations maintaining DE&I policies as discriminatory, chilling diversity initiatives and impacting the broader economy. The administration may seek to narrow protections under the Pregnant Workers Fairness Act (PWFA), requiring employers to provide reasonable accommodations for pregnancy-related conditions. Efforts might also rescind protections for LGBTQ+ workers, including expanded definitions of sex-based discrimination. Such rollbacks could leave many employees with limited recourse against discriminatory practices.
- Potential outcomes include increased private litigation as employees seek justice for discrimination outside the EEOC framework, leading to higher legal costs and potential class-action suits. A decline in workforce diversity may reduce competitive advantage, as research shows diversity enhances innovation and decision-making. Difficulty attracting and retaining diverse talent, particularly among younger generations, could result. Consumer purchasing decisions are increasingly influenced by corporate diversity, potentially impacting revenues. Rolling back PWFA protections may create unsafe conditions for pregnant employees, increasing workplace injuries and legal claims. Although reducing federal oversight might seem to alleviate regulatory burdens, the long-term consequences for businesses are significant: undermined diversity, increased legal risks, reputational damage, and workforce destabilization.
The Hidden Costs of Regulatory Rollback
Rolling back worker protections can significantly impact the economy. The Small Business Administration reveals that companies with strong worker protection programs have lower failure rates. OSHA notes that every dollar invested in safety programs yields $4 to $6 in cost reductions. Unions, vital in building the mid-20th-century middle class, continue to benefit society, with one in nine U.S. workers unionized. OSHA also reports that workplaces with effective safety and health management systems reduce injury and illness costs by 20% to 40%, alongside improvements in product quality and employee morale.
The Path Forward
The evidence is clear: weakening worker protections jeopardizes not only employees but also business sustainability and economic growth. OSHA reports that every dollar invested in safety programs yields a $4 to $6 return in reduced costs. Additionally, companies with robust worker protection programs experience significantly lower failure rates. Maintaining strong labor standards is sound business practice. As organizations face potential regulatory shifts, those upholding comprehensive worker protections—beyond mere compliance—are poised to gain competitive advantages through enhanced productivity, reduced turnover costs, minimized legal risks, and bolstered brand reputation. Pursuing short-term gains by exploiting deregulation can erode the foundation of sustainable success: a stable, engaged, and productive workforce. Business leaders should recognize that robust worker protections are integral to long-term profitability and growth.
