How Politics Affect Your Bottom Line


Politics are dominating the national conversation in anticipation of the upcoming election, and while opinions are being offered at a discount, the fact of the matter is that political decisions will affect costs in manufacturing, shipping, and receiving.

What should companies consider?

There are several sectors that will be affected by major policy changes; for instance, oil prices will spike and dip, just as they always have and fears and complications due to terrorist threats may cause delays and other circumstances that increase the overall cost of shipping.  While these will always affect shipping costs, recent and expected future changes in labor laws may be the most pressing issue.

What changes in labor laws should logistics companies be aware of?

  1. Paid Family Leave

Currently, the Family Medical Leave Act is a benefit that grants full-time employees 12 weeks of unpaid leave without fear of being terminated.  Regardless of who wins the presidential election in 2016, one thing is for sure—there will be changes regarding paid sick leave.  The two major sides of the debate seem to be a government insurance policy designed for paid sick leave vs. employers offering an hour and a half in compensatory time for every hour of overtime worked (in lieu of overtime pay).

  1. Minimum Wage

The discussion around the federal minimum wage will always be a topic of debate for political leaders.  Some democratic candidates have suggested increases in the minimum wage to as high as $15/hr while party front-runner Hillary Clinton has been reluctant to take a firm stance.  On the republican side, the GOP mostly opposes an increase in minimum wage, and some feel that the minimum wage should be eliminated altogether.

  1. Labor Policy Reform

New policies installed by the National Labor Relations Board (NLRB) have positioned president Obama as a “hero of the labor movement,” in that the NLRB has made it easier for employees working for franchises to hold the parent companies responsible for violations in labor law.

Another labor reform policy that employers are to comply with by December 1, 2016 is adhering to the raise in the minimum salary threshold for overtime exemption.  With the new rule, companies will be required to make changes in how overtime pay is handled and is estimated to cost employers $12 billion in overtime wages alone in the next decade.

Staying informed of the changing climate in labor reform is the first step in positioning your company for success in the near future.

Stay ahead of the curve and plan accordingly, because your shipping costs are sure to fluctuate as a result of this years’ election.

Sources: HR Professionals Magazine  and  Bose, McKinnney & Evans LLP