Regulatory Wrap-Up: Health care, swipe fees and scheduling
Massachusetts: The secretary of state officially certified the minimum wage initiative for the November ballot. The initiative would raise the state minimum wage to $15/hr. by 2022. If needed, activists will have additional time to gather signatures (up to June 19, 2018) should the legislature fail to act on the issue.
Minneapolis, Minn.: The state chamber of commerce along with other business trade associations pulled out of pending litigation seeking to overturn the city’s minimum wage law. The announcement follows a county judge’s refusal to grant an injunction in the case. Minneapolis-based Graco, Inc. is continuing the case.
Massachusetts: The secretary of state officially certified the proposed paid leave initiative for the November ballot. The proposal would provide a maximum of 16 weeks of paid leave at up to 90% of average weekly wages with a maximum of $1,000/wk. The proposal would also create an employer-financed trust fund to cover the costs of the program.
New York: A hearing was held on the recently released scheduling regulations that are slated to go into effect in the near future. The new rules are applicable to employers as defined under the state’s Miscellaneous Industries and Occupations wage law, which only applies to traditional retailers. Restaurants are covered under a separate statute, the Hospitality Industry wage law. The new “call-in” pay regulations will only impact retailers, while restaurant employers remain subject to the existing state regulations governing “call-in” pay. The 45-day comment period established by the state labor department is scheduled to end Jan. 7. It is unclear what effect, if any, the senate hearing will have on the pending regulations.
New York City: The city council passed a bill that mandates employers allow workers to take up to two unscheduled leave days per year for a “personal event.” The bill also forbids retaliation and applies potential fines to violators. The bill was transferred to the Mayor’s desk for likely signature.
California: A ninth circuit panel found that state law banning merchants from applying a surcharge to credit card purchases violates the free speech rights of the merchants. The ruling validates a 2015 decision by a lower court but limits the ruling to the five plaintiffs in the case. The state attorney general’s office is considering its options following the ruling.
Labor Department: In response to an earlier executive order from the president, the labor department released a proposed rule allowing for association health plans (AHPs). The rule allows for AHPs to offer insurance options that do not comply with standards established under the ACA, including pooling insurance plans across state lines. Employers have welcomed the new rule, however, critics warn of potential destabilization effects of the rule on the existing ACA insurance marketplaces.
Federal: In late December, the U.S. Government Accountability Office released a report finding that states continue to lose billions of dollars in revenue as a result of their inability to collect sales tax dollars from their residents, via online transactions from retailers with no collection obligation in a given state. The study also noted that many of the legislative solutions empowering states to compel collection beyond their borders could result in significant compliance costs for many small sellers.
Ohio: The American Catalog Mailers Association sued the Ohio Department of Taxation in state court over the state’s new physical nexus sales tax collection law that went into effect Jan. 1. Under the law, internet and catalogue retailers that have no presence in the state, other than “applications downloaded onto the customer’s computer or cell phone,” must still collect the state’s sales taxes. The law applies to sellers with over $500,000 in sales per year into the state.
KORUS: The Trump Administration and trade representatives from South Korea began discussions on the potential update of the five-year old KORUS free trade agreement. It is likely that many of the more contentious discussions will center on automobile manufacturing. It remains to be seen how much of a priority the administration gives the KORUS discussions and how it will navigate the ongoing dispute with North Korea that is dominating much of the dialogue in the region.
Federal: The Trump Administration has signaled it is likely to take action on various trade-related issues that have been under discussion for several months. Most notable to retailers may be actions taken related to imported steel, solar panels and washing machines. The U.S. International Trade Commission has determined that increased imports of both solar panels and washing machines are “a substantial cause of serious injury to the domestic industry” which now gives the President the legal basis to restrict those imports.
Immigration Florida: A ballot initiative, if approved by the state’s constitution revision commission, would mandate employer participation in the federal E-Verify work authorization program. In the past, the state’s business community has opposed mandatory E-Verify for private employers.
- With most state legislatures convening this month, there will be significant legislative reaction to the spate of sexual harassment stories in the news. It’s highly likely that many states will address their laws concerning non-disclosure agreements (NDAs) for discrimination claims. Many feel that these agreements deter victims from coming forward with accusations. Additionally, the new tax law eliminates the deduction of settlement payments if an NDA is involved. This is another example of how the public discourse can drive political and policy outcomes.
- As the Trump Administration and Congressional Republicans search for their first big agenda item in 2018, hopes by some for entitlement reform appear to be waning. Senate Majority Leader Mitch McConnell has indicated that the Senate will not pursue reforms leaving the 2018 agenda an open question. Operators should still continue to leverage significant opportunities for progress on key issues at the agency and regulatory level.
- With tax reform completed, the administration would prefer to focus on trade issues that align with Trump’s “America First” campaign promises. Continued action on NAFTA, initial discussions on revamping KORUS and potential actions on specific imported products will create an opportunity for Trump to push a platform of aggressive international actions in defense of American interests. Retailers will need to pay close attention, particularly to the discussions and actions related to specific products, as potential tariffs and the inevitable international response to them could cause significant market disruptions.
- The employer community needs to pay close attention to how states, particularly high-income tax states which tend to be blue, react to the new tax bill. Many are discussing tax shifts – moving the tax burden from individual income taxes, a large portion of which are no longer deductible, to payroll or other employer-related taxes that are deductible. The bottom line is that the debate on taxes will continue in some large states very important to operators.
Legislature Status for Week of 1/8/18
- The United States Senate is in session this week
- The United States House is in session this week
- Thirty-four state legislatures are meeting actively this week: Alabama, Arizona, California, Colorado, Delware, Florida, Georgia, Iowa, Idaho, Indiana, Kansas, Kentucky, Massachusetts, Maryland, Maine, Michigan, Missouri, Mississippi, North Carolina, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Virginia, Vermont, Washington and West Virginia.
The Regulatory Wrap-Up is presented by Align Public Strategies. Click here to learn how Align can provide your brand with the counsel and insight you need to navigate the policy and political issues impacting retail.
New member for NLBMDA’s MSC
The Misura Group is the newest member of the National Lumber and Building Material Dealers Association’s Manufacturers and Services Council (MSC). The council is composed of the leading building material manufacturers and service providers serving the LBM industry.
Misura Group is an executive recruiting firm dedicated to the lumber and building materials industry. Their purpose is to provide professionals with the resources and opportunities they need to achieve their personal and professional goals while maintaining a healthy work-life balance, according to the company.
Working as a consultative partner, Misura Group helps organizations improve profit through the development of talent acquisition and retention strategies. Misura Group delivers an unmatched level of speed, quality, and volume of candidates providing immediate and long-term impact for their clients.
“We are excited to be a part of NLBMDA, in good company with organizations that share our passion for the building materials industry,” said Tony Misura, President of Misura Group. “We look forward to becoming more involved and collaborating with and learning from other members.”
NLBMDA’s MSC members are industry leaders who supply products and services to lumber and building material dealers and regional chains across the nation. The dedicated members of the council share a commitment to promoting and enhancing the success of independent dealers and regional chains.
Masco expands into lighting
Masco Corporation said it has signed a definitive agreement to acquire The L.D. Kichler Co. (Kichler Lighting), a developer of decorative residential and light commercial lighting products, ceiling fans and LED lighting systems across the consumer and pro distribution channels.
Based in Cleveland, Kichler Lighting had revenues of approximately $450 million in 2017 and employs approximately 700 people worldwide.
The cash transaction is expected to close in the first quarter of 2018. Masco said that it intends to report the financial results of Kichler Lighting in its Decorative Architectural Products segment. Additional terms of the deal were not disclosed.
“We are excited about the prospects of expanding Masco’s reach into the fragmented $6 billion U.S. residential lighting industry,” Masco’s president and CEO Keith Allman said. “Kichler Lighting is a strong strategic fit with our focus on building products where brand, innovation and strength of distribution provide a competitive advantage.”
“Kichler’s products share many of the same customers as numerous other Masco brands and will complement our current product offering while strengthening our relationships with these customers,” Allman added.
Additionally, Masco announced that it acquired Mercury Plastics Inc. (Mercury) in the fourth quarter of 2017. Mercury is a plastics processor and manufacturer of water handling systems for appliance and faucet applications, as well as other highly engineered plumbing products, tubing, and assemblies.
Based in Middlefield, Ohio, Mercury had revenues of approximately $45 million in 2017 and employs approximately 300 people. Masco intends to report the financial results of Mercury in its Plumbing Products segment. Terms of the deal were not disclosed by Masco.
“We believe that, because of our rigorous acquisition process and patience, these acquisitions will be accretive to our earnings in 2018 and will demonstrate Masco’s ability to deliver on our strategic initiatives to create significant shareholder value,” Allman said.
Based in Livonia, Mich., Masco produces and distributes home improvement and building products. The company’s brands include Behr paint, Delta and Hansgrohe bath fixtures, KraftMaid and Merillat cabinets, Milgard windows and doors, and Hot Springs spas.