Navigating the Political Climate Post-Election: What Staffing Firms Can Expect

By: Sarah Faye Pierce, Head of Government Relations at Paychex

The results of the 2024 elections have the potential to create significant shifts in how the staffing industry operates, from taxation and regulatory oversight to labor laws and healthcare reform. With a Republican majority government at the helm for at least the next two years, staffing firms must be aware of upcoming policy changes and understand how to get involved at every level.

This article outlines the key issues, committees to watch, and steps staffing business owners can take to engage with the public policy process and position themselves for success in the coming year.

Trifecta Government and the Impact on Staffing Firms

In 2025, the political climate is all about change. The Republican party has trifecta control of the White House, Senate, and House of Representatives, and a big focus will be immigration, tax, and unwinding the regulatory state.

Given these dynamics, knowing how to get involved and advocate for issues important to your firm will be paramount. And while Republicans control all three branches now, as we know, these things tend to be cyclical. So staffing firms should not only look to their allies in Congress but also work to cultivate relationships across the aisle. This approach will help ensure that staffing issues, such as tax codes and labor regulations, receive attention from lawmakers who understand the industry's unique challenges.

Key Committees to Watch

Several congressional committees are set to drive policy decisions in 2025, and staffing firms need to pay close attention to their agendas.

House Education and the Workforce Committee: The incoming chair of this committee, Representative Tim Walberg (R-MI) will be a key player in shaping the legislative agenda. Given the importance of labor law issues for staffing firms, the chair’s priorities—particularly around overtime regulations, independent contractor classifications, and joint employer standards—will directly impact the industry.

Senate Health, Education, Labor, and Pensions (HELP) Committee: Senator Bill Cassidy’s (R-LA) leadership of this committee will likely bring healthcare reform to the forefront. As staffing firms often struggle with rising healthcare costs, any major changes in this area could have a profound effect on business operations. Additionally, paid leave and portable benefits for independent contractors are expected to take center stage. These policy shifts could create both challenges and opportunities for staffing businesses, depending on how the legislation is structured.

Key Staffing Issues to Focus On

Staffing firms should be proactive in tracking legislation affecting key areas:

  1. Independent Contractors: This segment of the workforce remains a hot topic. It is possible that the Department of Labor could reevaluate the regulations that set forth how these workers are classified. And as noted, legislation that reimagines benefits for this segment could be consequential for staffing firms that rely on contract-based workers.
  2. FLSA (Fair Labor Standards Act): Wage and hour laws, particularly around overtime and minimum wage standards, will likely be subject to review. Staffing firms need to stay informed about potential changes to the FLSA, as they could impact compensation structures.
  3. Paid Leave: The growing bipartisan support for paid family and medical leave (PFML) will require staffing firms to monitor legislation that may require them to offer this benefit, even if they currently do not.
  4. Tax Considerations: No tax on tips and no tax on overtime pay are key issues for staffing firms in service industries. Keeping an eye on potential tax reforms and credit programs, such as the Work Opportunity Tax Credit (WOTC) and PFML tax credits, will help staffing firms remain compliant and take advantage of available tax breaks.
  5. State-Level Activity: With 13 states having already enacted paid leave laws, it’s essential for staffing firms to stay attuned to state-level developments. These laws may differ significantly from federal proposals and could require localized approaches to benefits administration.

What Staffing Owners Can Do to Influence Policy

Business owners in the staffing industry play a critical role in shaping the policies that affect their businesses. To maximize influence and ensure that staffing firms' interests are heard, owners should take several proactive steps:

1. Get Involved in Trade or Professional Associations: Industry associations, like those for staffing, provide valuable resources to stay updated on legislation impacting businesses. They also offer avenues to participate in advocacy efforts, whether through fly-ins, conferences, or committees that help shape the conversation.

2. Engage with Local Elected Officials: Building relationships with local representatives can pay long-term dividends. Business leaders who are in regular communication with their elected officials not only help shape policy but also gain a better understanding of how proposed changes might impact their operations. Whether it’s discussing prevailing wages, healthcare regulations, or other workforce policies, local elected officials are often in a position to influence decisions at both the state and federal levels.

3. Host Elected Officials at Your Business: An effective way to strengthen relationships is to invite local or national representatives to visit your company. This offers an opportunity to showcase your business and engage in meaningful dialogue about the issues you face, such as workforce challenges or industry regulations.

Get Out the Vote (GOTV): Encouraging employees to vote is another way to support democratic engagement without taking a partisan stance. Supporting employees' right to vote, providing time off to do so, and offering resources on registration can help ensure that your team’s voice is heard at the ballot box.

The Bottom Line: Get Involved, Stay Engaged

As we look to 2025, the political landscape promises both opportunities and challenges for staffing firms. Staffing firms can ensure their interests are represented by building relationships with lawmakers, staying informed about key policy issues, and actively participating in advocacy efforts. By taking these steps, staffing firms can not only survive the political environment but thrive in it.

About the Author:

Sarah Faye Pierce, Head of Government Relations at Paychex

Sarah Faye Pierce is the Head of Government Relations at Paychex, bringing over two decades of experience in political and legislative affairs. Previously, she has held leadership roles at SHRM, AARP, and the U.S. Department of Labor, where she worked on key legislative initiatives impacting the workforce.