President-elect Donald Trump is expected to name fast-food executive Andrew Puzder, a vocal critic of substantially increasing the minimum wage and an opponent of rules that would make more workers eligible for overtime pay, as head of the Labor Department, according to a Republican briefed on the decision.
Puzder, who runs CKE Restaurants, the parent company of Hardee’s and Carl’s Jr., has been a harsh critic of raising the federal minimum wage to $15 an hour, arguing that it would increase costs for consumers and lead to fewer jobs. He also opposes the recently-delayed Labor Department rule that aimed to make millions more workers eligible for overtime pay.
As the head of a fast-food company, Puzder is a supporter of the approach touted by Trump on the campaign trail that lowering taxes for corporations and the wealthy and loosening regulations for businesses can boost job creation. He is a strong opponent of the Affordable Care Act, which he claims has hurt the restaurant industry because higher health premiums have left consumers with less money to spend.
By bringing in Puzder, Trump is signaling that he may scale back some of regulations introduced by current Labor Secretary Tom Perez. If confirmed, he will have the potential to reverse some of President Barack Obama’s administration’s most notable efforts to bolster protections for workers, families and retirement savers.
His appointment could put the future of the Labor Department’s overtime rule into question. In a Forbes op-ed that ran after the Labor Department finalized the overtime rule in May, Puzder wrote that the rule would “add to the extensive regulatory maze the Obama Administration has imposed on employers,” and that the rule would lead to fewer hours and reduced opportunities for workers.
As Labor Secretary, Puzder could potentially decide not to defend the rule in court. He could also propose revisions to the rule, but any adjustments would likely require notice and public comment.
With the upcoming nomination of the fast-food executive, Trump would bring another top fundraiser into his cabinet. Puzder supported Trump’s race to the White House financially and served as an economic adviser to his campaign. He and his wife, Deanna, contributed a total of $332,000 to helping Trump get elected, including money given to Trump’s campaign, to joint fundraising committees and to the Republican National Committee, according to the Federal Election Commission.
His anti-regulation stance is also viewed as a threat to another major rule finalized by the Labor Department earlier this year that would affect the investing advice given to retirement savers. The rule would require brokers and insurers to put their clients’ interest ahead of their own. Financial firms opposed to the rule say it is “burdensome” and could limit their ability to work with small-time investors. While Puzder has not addressed the regulation specifically, his nomination increases the likelihood that implementation of that rule could be delayed, according to an analyst report from the investment bank FBR & Co. The move could give lawmakers and the Trump administration more time to repeal or revise the rule.
Puzder has said that government policies that increase labor costs, such as significantly raising the minimum wage, hurt small businesses and “encourage automation.” In March, he told Business Insider that he and other fast-food companies are investing in automation and considering machines that could tackle simple tasks such as taking customers’ orders. “If you’re making labor more expensive, and automation less expensive – this is not rocket science,” he said at the time, though he later added that he would never remove all front-line employees.
Some business groups applauded Puzder’s likely nomination Thursday saying that the fast-food executive understands the challenges faced by retailers and restaurants. “Andrew Puzder is someone with the real-world experience to understand workforce issues and how jobs are created,” said David French, senior vice president for government relations for the National Retail Federation, which also opposes the overtime rule.
But some Democrats and consumer advocates are critical of Trump’s expected pick, saying his approach may harm low-wage workers. “The Labor Secretary should be someone who wakes up every day thinking about how they can raise American wages and fight for American workers,” Sen. Charles Schumer said in a statement. “Mr. Puzder’s career has shown exactly the opposite.”
Puzder became the CEO of CKE Restaurants in 2000. The company, which has more than 3,700 restaurant locations in 44 states and 39 countries, is in the process of relocating its headquarters from southern California to Nashville, Tennessee. Prior to joining the fast-food business, he worked as a commercial trial lawyer in St. Louis, Missouri.
