Unlike previous presidential transitions, Trump’s return brings a unique level of predictability—his administration has a track record that staffing companies can use to anticipate policies in his second term. Staffing agencies should be ready for business-friendly tax cuts, stricter immigration laws, and reduced regulatory oversight—all of which will shape workforce availability and employer requirements.

In this article, we’ll analyze the policies likely to change under Trump’s administration and their impact on staffing firms. We’ll specifically focus on:

• Expected shifts in tax provisions, immigration policies, and labor laws.
• Changes in energy, infrastructure, and AI regulations.
• Potential state policy responses in Republican-controlled and Democrat-controlled states.
• The effect of these changes on temporary staffing, workforce management, and hiring trends.

Tax, Immigration, and Labor Policies

Tax Policy: Will Staffing Companies Benefit or Struggle?

One of the most pressing questions for staffing firms under the Trump administration is how tax policy will evolve and whether it will ultimately help or hinder the industry. Trump’s 2017 Tax Cuts and Jobs Act (TCJA) introduced significant corporate tax reductions, but many of its key provisions are set to expire in 2025. As a result, staffing firms must closely monitor upcoming tax changes that could affect their profitability, hiring strategies, and overall operations.

Key Tax Provisions Affecting Staffing Firms

• Section 199A Pass-Through Deduction: This provision allows qualified businesses, including staffing firms, to deduct 20% of their qualified business income. While the American Staffing Association (ASA) has actively lobbied for its extension, the deduction is set to expire unless Congress intervenes.
• Work Opportunity Tax Credit (WOTC): This program incentivizes businesses to hire individuals from underrepresented groups, such as veterans and long-term unemployed individuals. Historically, WOTC has received bipartisan support, but its renewal may be at risk due to federal budget constraints.
• State and Local Tax (SALT) Deduction Cap: The $10,000 cap on SALT deductions has burdened businesses in high-tax states like California, New York, and Illinois. The Trump administration is unlikely to lift this cap, meaning staffing firms in these states could continue facing higher tax liabilities.

Trump’s New Tax Proposals and Their Impact on Staffing

In addition to renewing past tax policies, Trump has proposed several new tax changes that could impact the staffing industry:

• Eliminating taxes on tipped wages – This could benefit staffing firms serving the hospitality sector by increasing take-home pay for workers.
• Allowing auto loan interest deductions – While not directly staffing-related, this could stimulate economic activity, potentially leading to higher job creation.

While tax cuts may drive economic growth, they also risk increasing the federal deficit. Future tax hikes or spending reductions could offset any immediate financial benefits for businesses, making long-term tax planning essential for staffing firms.

Key Takeaways for Staffing Firms

• Monitor the status of WOTC and Section 199A to anticipate potential cost changes.
• Prepare for potential tax law revisions in 2025 that could affect profitability and workforce strategies.

Immigration Policies: How Worksite Enforcement Will Impact Staffing Firms

Immigration policy plays a critical role in the staffing industry, particularly in sectors that rely on temporary or seasonal labor, such as hospitality, construction, manufacturing, and healthcare. With the Trump administration expected to implement stricter immigration measures, staffing firms must prepare for increased regulatory challenges and potential labor shortages.

Toby Malara, Vice President of Government Affairs at the American Staffing Association (ASA), emphasized the need for staffing firms to adapt quickly to new restrictions in an ASA webinar.

“Staffing agencies have to navigate a landscape where hiring foreign talent becomes increasingly difficult, especially in sectors like IT, healthcare, and engineering… With immigration restrictions tightening, staffing firms have to be even more innovative in finding and placing qualified workers within the U.S.”

-Toby Malara, Vice President of Government Affairs at the American Staffing Association (ASA)

Increased Scrutiny on Employment-Based Visas

During Trump’s first term, denial rates for H-1B visas jumped from 6% in 2015 to 24% in 2018 due to increased restrictions (National Foundation for American Policy). A similar trend is likely in his second term, impacting industries that depend on foreign professionals.

The Biden administration had taken steps to expand work visa programs to address labor shortages. Trump is expected to reintroduce stricter immigration controls, particularly on:

• H-1B visas for high-skilled workers – Tighter approval criteria and increased scrutiny may limit the availability of foreign talent in IT, engineering, and healthcare.
• H-2B visas for seasonal/temporary labor—Stricter regulations could reduce the number of workers available in hospitality, landscaping, and agriculture.

Deportations vs. Workforce Availability

Deportation of undocumented immigrants has been a major focus of the new administration, a move that could create severe labor shortages in key industries. While immigration enforcement is expected to intensify, many business leaders warn that removing millions of workers could disrupt the labor market and worsen inflation.

Increased I-9 Audits and Worksite Enforcement

Under Trump, staffing firms should expect stricter I-9 compliance enforcement, increased workplace audits, and higher fines for violations.

In the same ASA webinar, Toby Malara stresses the need for full compliance with immigration laws.

“Staffing firms have always had to comply with I-9 requirements, but the Trump administration made it clear that violations would be more aggressively pursued. With increasing audits, agencies have to ensure that they are fully compliant with federal immigration laws.”

– Toby Malara, Vice President of Government Affairs at the American Staffing Association (ASA)

Key enforcement measures may include:

• More frequent ICE audits and workplace raids – Staffing firms and their clients may face surprise inspections.
• Higher penalties for I-9 violations – Fines for non-compliance are expected to increase.
• Stricter enforcement of E-Verify – Republican-led states may push for mandatory E-Verify compliance for all new hires.

Key Takeaways for Staffing Firms

• Ensure I-9 verification and compliance procedures are airtight to avoid costly penalties.
• Prepare for potential labor shortages in industries reliant on foreign workers, adjusting recruitment strategies accordingly.
• Monitor state-level immigration policies, as some states may push back against federal enforcement efforts.

With immigration under heightened scrutiny, staffing firms must adopt proactive compliance strategies while exploring new talent pipelines to offset potential workforce shortages.

Labor Policies: What Changes Will Staffing Firms See?

As the Trump administration takes control, significant labor policy shifts are expected, impacting staffing firms’ hiring strategies, compliance obligations, and competitive positioning. From diversity mandates to independent contractor rules, staffing firms must stay ahead of regulatory changes to navigate risks and opportunities.

In 2020, Trump issued an executive order banning racial sensitivity training for federal contractors, arguing it promoted divisive concepts. A similar policy could return, shifting corporate DEI expectations.

EEOC and DEI Initiatives: Scaling Back Mandates

Under the Biden administration, diversity, equity, and inclusion (DEI) programs expanded at the federal level, requiring government contractors to track and report diversity metrics. However, Trump is expected to roll back many of these initiatives.

Key Anticipated Changes:

• Federal agencies and contractors may no longer be required to follow DEI mandates.
• Increased scrutiny on DEI-based hiring preferences, potentially leading to legal challenges.

What Staffing Firms Can Do:

• Stay informed about corporate DEI expectations vs. legal risks to guide clients accordingly.
• Monitor government contracting requirements, as DEI compliance obligations may change.

Independent Contractor Rules: A Competitive Challenge for Staffing Firms

Independent contractor classification is one of the most consequential labor policy issues for staffing.

• Biden’s Department of Labor (DOL) narrowed the definition of independent contractors, making it harder for gig platforms to classify workers as non-employees.
• Trump is expected to reinstate his 2021 rule, making it easier for businesses to classify workers as independent contractors.

Implications for Staffing Companies:

• Some clients may shift from W-2 employees to 1099 contractors, reducing demand for traditional staffing services.
• Gig platforms like Uber Works, Wonolo, and Instawork could become more competitive alternatives to staffing agencies.

Overtime Rule and Wage Laws: Potential Rollbacks

Biden’s expansion of the overtime salary threshold (set to take effect on January 1, 2025) may be delayed or reversed by Trump, impacting wage compliance and employer labor costs.

• Biden’s Rule: Expands overtime eligibility to millions more workers, increasing payroll expenses for businesses.
• Trump’s Expected Change: Likely to freeze or lower the threshold, reducing employer obligations.

What This Means for Staffing Firms:

• Keep an eye on whether the overtime rule is rolled back and how it affects payroll costs.
• Advise clients on wage law changes to ensure they remain compliant with evolving regulations.

Energy, Infrastructure, and AI Policies

The Trump administration is expected to prioritize traditional energy production, infrastructure expansion, and a deregulated AI landscape. These policy shifts will create new staffing opportunities in sectors like oil and gas, construction, and technology while potentially disrupting renewable energy and administrative roles due to automation.

Energy Policies: Growth in Oil, Gas, and Traditional Energy Jobs

A return to pro-fossil fuel policies is expected, leading to increased domestic energy production. Key changes will likely include:

• Expanding oil drilling and coal mining operations
• Rolling back Biden-era environmental regulations that restricted fossil fuel projects
• Reducing incentives for renewable energy industries, impacting wind and solar jobs

What This Means for Staffing Companies

• Increased hiring in oil, gas, and industrial sectors: Staffing firms will see demand for skilled workers like welders, engineers, technicians, and drill operators.
• Renewable energy jobs may decline: A reduction in subsidies could lead to layoffs in solar and wind energy staffing.
• Skilled labor shortages: As production ramps up, staffing firms specializing in energy-sector recruitment will need strong talent pipelines to meet demand.

Infrastructure Investment: A Boom for Construction and Industrial Staffing

Infrastructure remains a bipartisan priority, and Trump has indicated support for projects such as:

• Road, bridge, and highway improvements
• Airport and seaport modernization
• Broadband and telecom expansion

How Infrastructure Spending Will Impact Staffing

• There will be a higher demand for skilled tradespeople. Electricians, equipment operators, and engineers will be needed for long-term infrastructure projects.
•  Steady contracts for staffing agencies: Large-scale infrastructure projects mean consistent job orders.
• Supply chain and logistics hiring will grow: Truck drivers, warehouse workers, and logistics coordinators will see job increases.

AI and Automation: Uncertainty for Hiring

Unlike Biden’s regulatory approach, Trump is expected to scale back government oversight and encourage corporate AI development without restrictions.

How AI Policy Affects Staffing Firms

• Less hiring regulation but more AI-driven automation: Businesses may accelerate AI adoption in hiring and workforce management.
• AI-powered staffing platforms will expand: Competitors like LinkedIn, Indeed, and Wonolo will increase recruitment automation.
•  Potential job losses in low-skill sectors: AI-driven automation could replace data entry, customer service, and administration roles.
• Surge in AI-related hiring: Companies will prioritize machine learning specialists, AI engineers, and automation experts.

State-Level Policies: The Blue vs. Red Divide

With Trump in the White House, Republican-led states will likely align with his pro-business policies, while Democratic-led states will actively resist, pushing for stricter labor regulations. This divide will create a complex staffing environment where firms must navigate significantly different legal and compliance landscapes depending on the state.

Red States Will Adopt Pro-Business Policies

GOP-led states are expected to implement policies that favor businesses by reducing regulatory burdens and fostering a more flexible labor market.

What to Expect in Republican-Controlled States:

• Lower business taxes and reduced labor regulations.
• Expansion of independent contractor classifications, benefiting gig work.
• Strengthening of right-to-work laws, limiting union influence.
• Fewer mandates for paid leave and other employer obligations.

Example: Florida and Texas will likely embrace Trump’s rollbacks of federal labor regulations, making them attractive markets for staffing firms due to lower compliance costs and business-friendly policies.

Blue States Will Push Back Against Trump’s Policies

Democratic-led states will likely counter Trump’s policies by reinforcing worker protections and increasing employer responsibilities.

What to Expect in Democrat-Controlled States:

• Higher minimum wages (many states aiming for $20+ per hour).
• Stronger bans on non-compete agreements, impacting staffing contracts.
• Expanded paid sick leave and family leave requirements.
• More aggressive enforcement against independent contractor misclassification.

Example: California and Illinois will likely expand DEI mandates, introduce stricter salary transparency laws, and enforce tighter workplace regulations—making these states more complex and costly for staffing firms to operate in.

Takeaway for Staffing Firms:

• Adapt recruitment and compliance strategies based on each state’s policies.
• Consider prioritizing business-friendly states with lower regulatory burdens.
• Stay ahead of legal changes by collaborating with HR and employment law experts.

The Next Four Years Will Shape the Future of Staffing

The outcome of the 2024 election represents a turning point for the staffing industry. With Trump back in office and Republicans in control of Congress, staffing firms must prepare for:

• Pro-business tax and labor policies, reducing regulatory burdens.
• Stricter immigration enforcement, increasing the risk of I-9 audits and labor shortages.
• Rising demand in energy, infrastructure, and industrial staffing sectors.
• Diverging state policies, requiring tailored compliance strategies.