What the New Administration Could Mean for Your Business

The outcome of the 2024 presidential election is poised to bring pivotal changes to industries deeply tied to the nation’s economic and regulatory framework. Service sectors like commercial cleaning, physical security, pest control, lawn care and landscaping operate at the intersection of labor, compliance and financial policy—making them especially sensitive to shifts in federal priorities. Immigration reform, regulatory enforcement and evolving tax laws are among the key areas likely to see significant adjustments under the next administration, with wide-ranging implications for businesses and their workforces. While much is still in flux, having an understanding of the potential shifts related to a political party change is essential for industry leaders preparing for the challenges – and opportunities – ahead.

Immigration & Labor Policy

New Enforcement Priorities

Under the new administration’s proposed 2024 platform, significant changes are expected in immigration and labor enforcement. Immigration policy proposals suggest stricter controls, which could reduce the available labor pool in industries such as physical security, commercial cleaning, pest control and landscaping. These sectors rely heavily on foreign-born workers, with an estimated 20% of service occupations filled by immigrants. Restricting visa programs like the H-2B visa, which many seasonal businesses depend on, could exacerbate existing labor shortages, resulting in increased labor costs (higher wages), project delays and operational challenges.

Labor Market Challenges and Policy Adjustments

Regarding immigration policy, proposed changes to visa programs could create additional challenges for these industries. While the new administration has expressed support for high-skilled immigration (like H-1B), there are proposals to reduce or eliminate the discretionary increases to visa caps, such as H-2B visas for non-agricultural seasonal workers. This could limit businesses’ ability to meet demand, especially during peak seasons and potentially lead to higher labor costs and project delays.

Financial Implications Post-Presidential Election

Tax Reductions and Corporate Tax Cuts

One of the most significant tax-related changes under a new administration is the potential for further reduction in the corporate tax rate. The Tax Cuts and Jobs Act (TCJA)–the biggest change to tax law and policy in recent decades–lowered the corporate tax rate to 21% when it went into effect over six years ago. However, many key provisions in the TCJA are set to expire at the end of 2025 if Congress doesn’t act, including:

Impact on Employee-Related Deductions: 

• Reduction in employee federal income tax deductions
• Addition of the child tax credit

Critical Business Impacts: 

• New deduction for qualified business income of pass-through entities
• Limits on the deduction for meals and entertainment expenses
• New limits on deduction for business interest expenses
• Changes to rules for life-kind exchanges
• Payments made in sexual harassment or sexual abuse cases
• Changes to deductions for local lobbying expenses
• Excess Business Loss
• Net Operating Loss

SALT Deduction changes

The State and Local Tax (SALT) deduction, previously capped at $10,000 annually (or $5,000 for married filing separately) may see the restoration of unlimited deductions. Note: this change affects individual taxpayers rather than providing employer cost savings.

“Made in America” Tax Implications

A proposed 15% tax rate for American-made products, coupled with tariffs on imported goods, could increase production costs.

• Companies manufacturing domestically may benefit from reduced rates
• Businesses importing products should prepare for potential increased costs due to tariffs
• Higher production costs may affect pricing strategies

Employee Tax Exemptions

The proposed legislation includes tax exemptions on tips and overtime earnings, meaning employees will no longer pay federal income tax on these types of compensation. For example, if an employee works 40 hours at regular pay plus 10 hours of overtime, they will not pay federal income tax on those overtime hours. Similarly, service workers who receive tips will keep this income tax-free. While these changes directly benefit employees through increased take-home pay, employers’ involvement is primarily administrative – the main requirement will be updating payroll and timekeeping systems to process these new tax exemptions properly.

Lowering the Corporate Tax Rate

The new administration has indicated there may be an even further reduction to the 21% rate established by TCJA. This would provide substantial tax relief to businesses across many sectors, including physical security, commercial cleaning and pest control.

Qualified Business Income Deduction

TCJA introduced a significant benefit for small to mid-sized businesses through the Qualified Business Income (QBI) deduction. This provision allows owners of pass-through entities–including sole proprietorships, partnerships, and S corporations–to deduct up to 20% of their qualified business income. This deduction may be of particular value for owner-operated businesses.

Tariffs Proposals

Proposed tariff increases may significantly affect operational costs in our industries.

• 10% to 20% on general imports
• 25% on products from nations identified as contributing to illegal immigration
• 60% on products from foreign rebel nations
• 100% to 200% on certain foreign automobiles

These tariffs will directly impact companies’ operational costs through increased prices on essential non-labor supplies and equipment, such as uniforms, equipment and maintenance supplies.

Capital Gains Tax and Business Expansion

Administration changes have also proposed reducing capital gains taxes, which would benefit business owners looking to sell or transfer their businesses. This could encourage mergers and acquisitions, especially for service-oriented industries such as security and landscaping. Reducing capital gains taxes would allow business owners to retain more of the proceeds from sales or investments, potentially driving expansion and reinvestment in the business. There is also the potential for immediate deductions on certain capital investments, rather than depreciating them over time, which may encourage businesses to expand and modernize.

Tax Incentives for Sustainable Practices

The new administration has historically favored tax incentives for domestic production and energy-efficient technology. This could extend to industries like landscaping, pest control and commercial cleaning, where businesses that adopt green technologies or eco-friendly practices could benefit from tax credits or incentives. These might include discounts for purchasing electric lawn equipment or energy-efficient pest control solutions.

Repatriation Tax Benefits

A key proposal of the new administration is the repatriation tax policy, which offers reduced tax rates to U.S. companies that bring their foreign earnings back to America. By offering a lower tax rate on these returned funds, the administration aims to encourage companies to reinvest their foreign earnings in the U.S. economy rather than keeping them in foreign accounts.

Impact of Policy Proposals: An Industry-Specific Analysis

1. Commercial Cleaning Industry

• Tax credits: Potential investment tax credits for purchasing energy-efficient or sustainable cleaning technologies might help commercial cleaning companies offset the cost of green upgrades.
• Labor market: Building service contractors in the commercial cleaning industry often rely on a workforce that includes immigrant employees. Changes to immigration laws could limit access to this talent pool, which may lead to labor shortages in lower-wage positions.
• Wages: Wage inflation may still occur due to a growing labor market and higher demand for services, which may result in cleaning companies needing to adjust pricing strategies to mitigate labor cost increases.
• Regulatory changes:  While federal regulations may decrease, state-level regulations will increase. This means security companies working in multiple states need to track different requirements in each state they operate in, leveraging software tools where needed to ensure compliance.
• Supply chain: Proposed tariffs on foreign imports could lead to increased costs for uniforms, supplies and equipment.

2. Physical Security Industry

• Tax credits: Job creation incentives, such as tax credits for hiring, could encourage security companies to expand their workforce, especially for seasonal needs or when scaling operations for larger contracts. This is particularly important during periods of heightened security needs, such as holidays, major events or during peak business seasons.
• Labor market: A significant immigration policy shift under the new administration’s platform could impact the availability of workers for physical security services, which often rely on both skilled and entry-level labor. Changes in immigration law that limit the number of work visas for foreign-born workers may reduce the talent pool.
• Wages: The security industry, which relies on a stable and skilled workforce, could see wage inflation and higher demand for labor under proposed policies aimed at economic growth. As a result, security firms might need to adjust their pricing strategies to maintain profit margins.
• Regulatory changes: While federal regulations may decrease, state-level regulations will increase. This means security companies working in multiple states need to track different requirements in each state they operate in, leveraging software tools where needed to ensure compliance.
• Supply chain: While the primary focus for human guarding is labor, many security companies still require essential equipment that may be imported. Proposed tariffs on foreign imports—especially from China—could lead to increased costs for such materials. Security companies that rely on imported products could see their operational costs rise, potentially affecting profit margins and pricing strategies.

3. Pest Control, Lawn Care and Landscaping Industries

• Tax credits: Investment tax credits for sustainable or energy-efficient equipment could support these industries in adopting more eco-friendly practices while reducing operational costs.
• Labor market: Immigration changes could further strain the already limited workforce in pest control and landscaping, particularly in seasonal and lower-wage positions. As many of these industries employ immigrant labor a reduction in available workers could lead to higher wages and increased recruitment efforts.
• Regulatory changes: While federal regulations may decrease, state-level regulations will increase. This means security companies working in multiple states need to track different requirements in each state they operate in, leveraging software tools where needed to ensure compliance.
• Supply chain: For landscaping and pest control businesses that rely on imported materials (e.g., landscaping equipment or pest control chemicals), the proposed tariffs could increase costs. For example, pesticide products or machinery sourced from overseas might face higher costs due to tariff proposals on imports, particularly from China.

Business Planning and Strategic Adjustments Under New Policy Platform

As we look ahead, businesses in service sectors like commercial cleaning, physical security, pest control, lawn care and landscaping must prepare for the potential changes under new policy platforms.

While tax cuts, deregulation and incentives for domestic investment present opportunities for growth and operational efficiency, proposals may also present challenges. By proactively navigating these shifts, businesses can position themselves to capitalize on the economic growth and rising demand expected in the coming years.

This article is for informational purposes only and presents a high-level overview. Legislation is constantly changing, so no action should be taken based on this article without legal counsel.