Paychex's Sarah Faye Pierce: Breaking Down Key Executive Orders & What They Mean for Your Business

Gene Marks (00:00)

Hey, everybody, it's Gene Marks. So, are you wondering how your business is going to be affected by all these executive orders coming from the new administration? Well, trust me, you are not alone. Well, we've got an answer for you. Join Paychex and me for our webinar, The First 100 Days: Business Strategies to Adapt Quickly. We'll break down what these orders mean for businesses like yours, how to get prepared, and strategies to stay ahead. It's everything you need, all in one place. Sound helpful? It will be. So, register now at go.paychex.com/First100 and don't miss out. And now we have a special conversation that I just had with Sarah Faye Pierce, the Head of Government Relations at Paychex. And we're talking about executive orders. What are they, and how they impact your business. It's a great introduction to the topic, and you'll learn a lot. So, join us for this conversation. We'll talk to Sarah right now.

Announcer (00:56)

Welcome to THRIVE, a Paychex Business Podcast. Your blueprint for navigating everything from people to policies to profits. And now your host, Gene Marks.

Gene Marks (01:08)

So, Sarah, it is great to see you. Thanks so much for joining again. It's always fun to talk with you.

Sarah Faye Pierce (01:13)

Hi, Gene. Thanks for having me today. And very excited to talk to you and the audience.

Gene Marks (01:18)

Yeah, I'm glad that you're here. And, you know, before we get started on the specific questions I have for you, just as your title is Head of Government Relations for Paychex, can you just describe to our audience what, you know, what that is, what you do?

Sarah Faye Pierce (01:29)

Sure. So, I'm the principal lobbyist for Paychex. And what I do is I talk to the Congress here in Washington, D.C. and I also work with the current administration, so the Trump administration, on regulatory issues. And so, we, you know advocate for changes to the law with the Congress. And then as the agencies seek to implement the law, we certainly have something to say about how they carry forward the law as it applies to our 740,000 small business clients out there.

Gene Marks (02:01)

So, yes, Sarah, just to be clear, when you're, you know, when you say you're advocating on Capitol Hill, it's not, it's not for Paychex, but It's for the 740,000 small and midsize customers that Paychex has, right?

Sarah Faye Pierce (02:13)

Yes, that's exactly right. We evaluate what's happening up on Capitol Hill as it relates to small businesses. Tax reform is a great example. It's a big year because the 2017 Trump tax cuts are about to expire at the end of the year. And so, we are talking to leaders on Capitol Hill to articulate why it's important to extend certain tax cuts that will benefit small businesses. And frankly, we think when small businesses win, Paychex, wins. And so, it's important for us to be a strong and loud voice for small businesses out there.

Gene Marks (02:49)

Fantastic. All right, that's great. All right. So, we have a new administration in place, obviously, and I don't know, Sarah, one or two executive orders have been issued, I think, by our new president since he took office, maybe three or four. There's a conversation about executive orders. And I can think of no better person to educate and explain to us what is going on with these executive orders. So, first of all, straight out, let's set the baseline. Sarah, like, what is a federal executive order?

Sarah Faye Pierce (03:21)

Sure. I think it's a great question. And my guess, Gene, is that every adult American, and maybe even some younger Americans have been thinking a lot about executive orders this year. And one little known fact is that President Trump is on pace to, to meet or even surpass the number of executive orders that were issued by FDR. So just kind of think about that for a moment and how long he represented the United States as president. So pretty interesting times we're living in. But just very clearly, what is it? Setting the baseline? It's a directive that's issued by the president of the United States. It's authorized by the Constitution, and it dictates how the federal government operates and enforces laws. It's a way for the president to make policy without going through the Congress. And the Congress is the body of our government that makes the laws. But this executive order process allows the president to make policy as well.

Gene Marks (04:22)

Right. So executive orders aren't laws. I mean, only Congress can pass laws, but they're policies that the executive branch is being ordered by the president to carry out. So who has to follow an executive order? Like, you know, how does this affect us?

Sarah Faye Pierce (04:40)

Sure. Well, primarily, executive orders apply to the federal agencies, and they're directing how agencies enforce and manage their operations. Impact doesn't stop there. So, think about your small business. For example, if you're a federal contractor or you receive federal funding, you may be required to comply with certain executive orders. So, let's take, for instance, the executive order that President Trump issued, ending affirmative action. And so, there's no affirmative action enforcement for federal contractors related to women and minorities. So, this means businesses who are engaged in federal contracts must adjust their compliance programs accordingly. So, you know, even if you're not working with the government, executive orders can still affect you indirectly. EOs often lead to changes in federal regulations. And this is really important because not only can they lead to federal change, the president has even gone so far as to issue executive orders that are directing the agency heads to evaluate all of the regulations within their agencies to determine if those regulations, one, need to be rolled back or number two, need to be modified to be more consistent with the law. Labor law, environmental standards are really great examples right now. We've seen a lot of rollbacks at the EPA recently, and even these executive orders can have trends in terms of how they trickle down to the states and trickle down to the local level. They could be adopted, or they could be followed in policy. And so, it's really important to really keep pace with those regulations as they shift, because your business might need to adjust your policies and your practices to stay compliant.

Gene Marks (06:25)

Got it. Does the president have to have, like, an executive order for all of his decisions? You know, like, you know, like, I mean, like, there's decisions that he makes, like, you know, potentially say, you know, closing down the Department of Education or, you know, or changing the way, you know, for example, like DEI rules or things like that. Does he necessarily have to, like, issue an executive order for this, or does he. Can he just say it? Do you know what I mean?

Sarah Faye Pierce (06:53)

Well, the President has been saying a lot of things, Gene, and they fall into, you know, three buckets, primarily. Executive orders, executive memorandums, and executive proclamations. The example you noted on the Department of Education is a little bit murky, and many folks here in Washington think that the Congress must become involved in that decision in order to fully dismantle the Department of Education. And as you can imagine, quite controversial. But certainly EOs, like you mentioned, diversity, equity and inclusion initiatives. There were several executive orders put out by the President very early on in January. Relative to that issue, some of the courts put a halt on them. And just over the weekend, a judge ruled that the President may go forward with his DEI executive orders. And so those are going to have significant implications for small businesses, especially, again, if you're a federal contractor. However, the order does mandate elimination of DEI programs within federal agencies. But here's the fine print. And scrutinize similar initiatives in the private sector, potentially affecting your compliance requirements and potential funding opportunities, again, if you're a federal contractor. But, like, let's just kind of drill down scrutinizing similar initiatives in the private sector. So those agencies who have the ability to examine your workplace policies and practices can take a look at your DEI programs. And so, it's just something that businesses should be keenly aware of.

Gene Marks (08:32)

You know, DEI is, is an issue, Sarah. And I have to, I'm just curious to hear your thoughts on this. You know, like, you know, if the president issues executive orders around DEI, pulling it back for tailing, you know, the use of DEI from a federal standpoint. And scrutinizing companies that might do business with the federal governments and what they're, you know, what they're doing with DEI. And I kind of understand that because he's the leader of the federal government, so he can issue orders however he wants when it comes to how the federal government is doing business. Right? But say it's just a private business and you're not doing any work with... Take my company, right? I only have 10 employees. But, like, I don't do any work with the federal government. I have no, like, other than just paying my taxes, I really don't deal with the federal... There's a lot of my clients that are the same way. If I have my own DEI policies in my company, whatever they might be, does the, you know, does President Trump's executive orders still impact me even though I'm really not really doing business with the federal government other than just paying my taxes?

Sarah Faye Pierce (09:38)

Yeah. And it's important to put a fine point on it. And again, so he can direct agencies who have the ability to conduct investigations into your workplace. So, take, EOC, for example, they could come in and examine your policies if they're public facing related to DEI and potentially proceed accordingly under the authorization of that particular agency. DOJ also is an example of that. So, it's something that should be evaluated by businesses in, you know, concert with their HR business partner from Paychex or their HR consultant or their legal attorneys who can really help them evaluate what makes the most sense for their, their company.

Gene Marks (10:22)

Yeah, that's such a great point. And thank you. You've explained it to me. You know, I think I do know a lot of people that are in the nonprofit world and, and nonprofit organizations that do have DEI policies, they don't do or receive any grants from the federal government, but they're really, you know, they're really reevaluating other DEI policies. And I guess that's the reason why, because the federal government can still, they can still be investigated, still come under scrutiny by different agencies. And then also, I guess if they're indirectly receiving, if they're receiving state funds that have indirectly come from the federal government there could be that, you know, you know, that connection that could also subject them to scrutiny as well. So, it puts everybody under the gun to reevaluate their DEI policies. Does that, am I, does that make sense, what I just said?

Sarah Faye Pierce (11:08)

No, I think, I think that that's the right call. Absolutely.

Gene Marks (11:11)

Okay, let's talk a little bit about tariffs. You know, I mean, you know, you, you had, obviously the President is issuing executive orders around tariffs and there's always these questions about what is he legally allowed to do and, you know, what is he not allowed to do. And you don't have to get into the details of the percentages by countries and all that kind of stuff but just explain to us what he's doing with these executive orders, you know, regardless, you know, regarding tariffs and how legit they are and how serious we should be taking them.

Sarah Faye Pierce (11:43)

Absolutely. And Gene, we've been talking about tariffs with the President Trump's first, first term in office. President Biden kept many of those tariffs in place. And now here we are again with the second Trump 2.0, as we're calling it here in Washington, where more tariffs are on the table . Tariffs can be a rising tide of sorts, right? It can lift some boats for some companies while other boats and other companies are struggling or taking on water. And there's a huge economic impact here. Executive orders that are changing trade policy affect supply chains, they affect pricing. New tariffs can have a huge impact on small and mid sized businesses, much more so than their larger competitors. Increased costs are huge, huge issue for small businesses, especially if they're importing materials or even importing finished goods. Tariffs are just going to drive those prices up and bigger businesses can absorb those costs and it's harder for the smaller guys to do so. And so costs can get passed on, can reduce your demand, your margins can take a hit. And so there are a lot of very important issues that these smaller businesses have to tease through when they're thinking about how tariffs could potentially impact their business. And then the other side of the coin are the opportunities that tariffs present for domestic producers. And the domestic producers can potentially become more competitive. But in some cases, that only benefits certain sectors and certain industries, and the impact is just going to depend Industry to industry. I think overall, the net for small businesses is the tariffs are going to bring higher costs, tighter margins, and a little bit more uncertainty to the business operations.

Gene Marks (13:29)

Do you think that these tariffs are, you know, are just a negotiating practice, or do you think that these are things that are going to permanently impact small businesses going forward?

Sarah Faye Pierce (13:42)

I struggle to try to handicap what President Trump is going to do, Gene. He's been back and forth on the tariffs, and what I believe that we've seen is that it's compelling behavior change. And I think that is what ultimately the administration is after is to get some of these countries to engage with the United States in a different manner. That being said, many industries who are on the front lines of these tariffs are taking everything that the administration is doing very seriously and are preparing their supply chains, they're preparing their industries to adjust accordingly if the tariffs do ultimately go into effect. And so, it's creating, currently in the moment, quite a bit of volatility. And I think we're all well aware of that, particularly in the markets. And so, you know, hopefully over the next, you know, several weeks to months, we'll see some sort of, you know, evening out of, you know, what this potential trade policy may be. But for right now, it feels very bumpy.

Gene Marks (14:47)

Got it. Got it. Sarah, you know, President Trump has issued more than 75 executive orders at the time of this discussion. I'm curious. We've talked about tariffs; we've talked about DEI. What other executive orders as he, you know, as he issued that you think would most impact small business? I mean, they can all have indirect impacts in certain ways. But what do you think are the biggest ones, other than tariffs and DEI that we discussed?

Sarah Faye Pierce (15:18)

Sure. And we hear, we've been hearing a lot from our clients, Gene, and you really hit on two of the top issues that our clients are contacting us on. The other issue is immigration, certainly, and what the impacts of potential deportations could be, again, on small businesses and the ability to adapt, again, how that could affect the cost of goods, for example. And so, we've done a lot of programming already to help our clients wade their way through what those impacts could be. In addition to that, some executive orders that aren't as often spoken about. That could be what maybe I call a sleeper issue is an executive order that was recently issued. It's called the Ten for One Executive Order, essentially. And that means for every regulation that is issued by a federal agency, 10 regulations have to be marked for deregulation, which essentially means 10 regulations have to be struck and so that is an incredible upheaval again of the regulatory regime here in Washington. The intention is to stimulate the economy to make it much easier for small businesses and just businesses in general to be in compliance to improve the efficiencies of their operations. And hopefully then innovation really can spawn and grow. But it's right now creating a lot of again, volatility and uncertainty as we try to wade our way through and understand what that all could mean for a business. And that's a role that is really important for Paychex to play as well as, you know, trade associations and other industry groups like local chambers of commerce, for example, to really help small businesses, businesses in general, understand what their obligations may be. And we've talked about so much about uncertainty and this isn't a week-to-week uncertainty in a day-to-day uncertainty. In some cases, we're having changes occur hour by hour. And so, to keep pace with that, you know, businesses really need to rely on their trusted advisors.

Gene Marks (17:31)

Sure, sure. You know, you partially answered the question that I was going to ask next was just like, what do we do as business owners? I mean, I don't have the time to keep track of all of these tariffs that are going on and yet there might be some that are going to be impacting my business. So where do you go?

Sarah Faye Pierce (17:47)

Yeah, well, so one of the, you know, plug for Paychex is, you know, we're tracking these executive orders. We have all of our executive orders in a tracking system and not just the executive orders are being tracked. We are tracking all of the litigation that is associated with those executive orders because there's such an incredible volume of orders out, but also legal challenges and it's very difficult to keep pace with all of it. And so we have all of that in hand. We have that tracker updated daily and we have that as a resource for our HR business partners, our compliance experts and the like to help our clients understand what the obligations may be at that time. And of course, subject to change, as we all are experiencing. But again, you know, finding your trusted sources. So, like I said, local chambers, industry groups, all of those legal experts, you know, HR consultants can help you really understand, you know, what it is that you need to be doing and how you need to be thinking about the current environment that you're operating in.

Gene Marks (18:55)

You know, you mentioned, you know, chambers of commerce, trade associations as well. And for those of you that are listening or watching this, I mean, I speak to a lot of trade associations throughout the year. They all have Sarah's you know, they all have their purse that does like the government regulatory work specific for that industry. And those sessions are always very, very well attended because if you're, you know, operating manufacturing, world distribution, service, construction, there's we haven't even talked about, you know, executive orders impacting environmental regulations as well, Sarah, because that's so industry specific. But you got to know what those rules are if you are, you know, in that industry. So, I just wanted to give up, you know, a shout out as well. Besides leaning on a, on a Paychex help you, I think you really need to be active in your industry association.

Sarah Faye Pierce (19:43)

Absolutely. And I would certainly be remiss if I didn't make my own plug for every business to get involved. Advocacy matters. And you as the business owners are such an important voice. You're a grassroots voice and you can communicate and let your voice be heard through your industry groups. You can participate in these local business organizations as we've been saying a couple of times now. But also right now is a perfect example. This week it's St. Patrick's Day Week and all of the elected officials are home in their home districts, in their home states, they're holding town hall meetings. It's your opportunity to show up in person and communicate your concerns, communicate your support. If there are policies out there that are working well and that you want to see remain in place, communicate that and engage with your policymakers and put that pressure on those elected officials. So when they come back to Washington, they can be communicating that with the White House, they can be communicating that with their colleagues and they can adjust the policy accordingly. And when your small businesses speak, that is a crescendo because you're not just speaking for your business, you're speaking for your workforce and your local communities. And I've really seen the needle move on policy when you, when you take it into your own hands and exercise your right to communicate your views with your elected officials.

Gene Marks (21:07)

Sarah Faye Pierce is the Head of Government Relations at Paychex. She is in Washington D.C. living the dream following all the regulatory changes that are going on and reporting back and advising and advocating on behalf of all of Paychex customers small and mid-sized businesses. Sarah, thank you so much for the work that you do. You do a fantastic job and thanks for coming on the podcast. It was a great conversation.

Sarah Faye Pierce (21:30)

Yeah, I appreciate you having me.

Gene Marks (21:31)

Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know, visit payx.me/ThriveTopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR, payroll, benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W-O-R-X. Paychex can help men manage those complexities while you focus on all the ways you want your business to thrive. I'm your host, Gene Marks, and thanks for joining us. Till next time, take care.

Announcer (22:05)

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