Regulatory Wrap-Up: Immigration raids, paid leave and wages
Massachusetts: Ahead of the deadline for the first round of signatures, Raise Up Massachusetts announced that they have secured the required number to place an initiative on the 2018 ballot. The initiative would raise the state minimum wage to $15 per hour by 2022. The signatures must now be validated by state election officials. Activists will have additional time to gather signatures (should they need it) by June 19, 2018, if the legislature fails to act on the issue.
Missouri: According to recent filings, advocates pushing for a $12 per hour minimum wage increase on the 2018 ballot have received more than $500,000 in funding from unions and other labor-backed groups. The proponents have until May to turn in enough signatures (a relatively low threshold) to qualify for the November ballot.
New Jersey: At Governor-elect Murphy’s first press conference with legislative leaders, he stated that a $15 per hour statewide minimum wage will be one of his first priorities when he is sworn in on Jan. 16.
Vermont: Anticipating the recommendation of a special legislative committee to increase the state’s minimum wage to $15 per hour, the Senate President Pro Tem stated that the increase is one of his top priorities for the 2018 legislative session. The committee plan calls for an increase to $15 per hour but does not specify the length of time over which the increase would phase in.
Maryland: Gov. Hogan announced plans to introduce a compromise paid leave bill in the 2018 session. The governor vetoed a bill earlier this year that may have enough support in the Democrat-controlled legislature for a veto override. The governor’s proposal seeks to allow smaller businesses a longer implementation timeline and includes state preemption. The proposal was met with opposition from Democratic leadership in both chambers.
Massachusetts: Ahead of the deadline for the first round of signatures, Raise Up Massachusetts announced that they have secured the required number to place a paid family leave initiative on the ballot in addition to a $15 per hour minimum wage mandate. The signatures must now be validated by state election officials. The proposal seeks to provide a maximum of 16 weeks of paid leave at up to 90% of average weekly wages with a maximum of $1,000 per week. It would also create a trust fund into which employers would pay 0.63% of each employee’s annual wages. Activists will have additional time to gather signatures (should they need it) by June 19, 2018, if the legislature fails to act on the issue.
New Hampshire: With bipartisan support, a bill to establish a paid leave program financed by a 0.5% payroll tax on employees recently passed out of a house committee and will move to the floor for consideration next session. It would provide up to twelve weeks of paid leave, parental or sick time per year at 60% of the employee’s current salary.
San Diego: Several local restaurants are being sued for adding surcharges to customers’ bills to offset added costs associated with the recent escalation in the city’s minimum wage. The pending lawsuits allege deceptive advertising, claiming customers were not made aware of the surcharge until after the meal.
Santa Monica, CA: The city attorney’s office announced its first successful prosecution of a business owner for failing to pay the city’s minimum wage and retaliating against an employee for asserting her wage rights. The retail shop owner must pay employee back wages, fines and complete community service hours.
New York: New statewide regulations were officially published Nov. 22 and are subject to a 45-day comment period before taking effect. 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.
Los Angeles: An opinion piece in the Los Angeles Times suggests that L.A. city or county government may take up restrictive scheduling in the near future. There have been rumors over the past year of potential legislative activity in L.A., following the path of San Francisco and Seattle. Similar legislation at the state level has failed to move, which may add additional motivation for local policymakers to take action.
New York City: The city’s “fair workweek” laws went into effect Nov. 26. The city ordinances mandate that fast food employers provide 14 days advance notice of work schedules, offer new hours to existing employees prior to bringing on new workers, allow employees voluntary paycheck deductions to non-profits of their choice and prevent employers from scheduling employees for multiple shifts with less than 11 hours between shifts. The city law also calls for specific record keeping requirements for retailers as well as fast food employers.
Multnomah County, Ore.: Advocates announced that they have collected enough signatures to place a 1.5 cent per ounce tax on sugary drinks on the May 2018 ballot, but they made the strategic decision to wait for the November 2018 ballot, determining they have a better chance at passage with higher turnout in Portland and other areas of the county in November.
U.S. Senate: The U.S. Senate’s tax reform legislation passed 51-49, as a result of last minute negotiations with key Republican Senators. The language that passed the Senate differs from what previously passed the U.S. House. The most likely path forward is that the bill will go to a conference committee and be voted on again in both chambers before it is advanced to the president’s desk.
NLRB: Management-side attorney John Ring is going through a final White House background check to fill an upcoming Republican vacancy on the National Labor Relations Board. Ring would fill the seat of Phil Miscimarra, whose term expires Dec. 16.
OSHA: For the second time, the Occupational Safety and Health Administration extended the deadline for employers to file illness and injury reports. Originally the deadline was July 1 and was extended to Dec. 1. The new deadline is Dec. 15.
Missouri: The secretary of state certified that the right to work law passed earlier this year will be placed on the 2018 ballot for voter approval. Missouri allows residents to call for a ballot measure on new legislation by collecting signatures from at least 5% of voters (over 100,000) from six of the state’s eight congressional districts.
New York City: The National Restaurant Association’s legal center initiated a lawsuit seeking to block a component of the city’s ordinances dealing with restaurant scheduling and payroll policies. Specifically, the group is seeking to bar the law that allows for voluntary employee paycheck deductions to nonprofits of their choice. The ordinance, supported by labor leaders, was intended to provide a funding mechanism for local labor organizations.
CEO Pay Survey: A survey released by Korn Ferry highlights the concern that many entry-level employers have with the upcoming mandated disclosures of CEO pay compared to median worker pay. The reporting, due for the first time by publicly traded companies in their 2018 earnings reports, could show ratios up to 1,100% when comparing the chief executive against the median compensation level of all other employees. This level of disparity will certainly gain national attention and cause reputational issue for many brands and industries.
U.S. Senate: The tax reform bill that passed the U.S. Senate contains a repeal of the individual mandate which is a central piece of the ACA. President Trump has said he would support two separate proposals intended to stabilize insurance markets in exchange for support of the tax reform bill. One proposal would fund ACA insurer payments, and another would fund states’ reinsurance programs for high-cost patients. Some centrist Republicans believe both provisions would help stabilize the insurance markets following the repeal of the mandate; however, some conservatives have raised concerns regarding the costs, putting the deal in jeopardy. As the bill is likely headed to a House/Senate conference committee, it’s unclear how this issue will be addressed in the final legislation.
ITC: The U.S. International Trade Commission officially recommended that the U.S. impose tariffs on large residential washer imports. The administration is expected to issue a final ruling early next year. While the proposed tariff would affect only those foreign manufacturers in countries without U.S. trade agreements, South Korean manufacturers such as LG and Samsung would be impacted given their sourcing practices. The proposed tariff could impact ongoing discussions over the KORUS trade agreement between the United States and South Korea.
ICE: According to a U.S. Immigration and Customs Enforcement internal memo, the agency is planning a major worksite enforcement operation at an unnamed national food service chain. The intent of the operation is to identify criminal activity and enforce immigration and wage laws where applicable.
- As we’ve witnessed under previous administrations, ICE raids are likely to draw national headlines. Recent reports indicating that raids will occur in the coming weeks at food service chains should be a cause for concern for retailers. Some operators may find their supply chains under scrutiny in addition to their workplaces. Given the President’s tough talk on immigration, many expect this round of raids while be much more highly publicized compared to previous actions.
- The conversation around paid leave benefits continues to evolve. A recent New York Times article highlights the growing prioritization, by millennials in particular, of expanded leave policies in determining where they live and work. Recent studies have found that millennials now feel policies such as paternity leave should be part of normal leave packages from employers, moving the goalposts in the employee marketplace yet again.
Legislature Status for Week of 12/4/17
- The United States Senate is in session this week
- The United States House is in session this week
- The following state legislatures are in session year round: Illinois, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and Wisconsin.
- Massachusetts, Michigan, New Jersey, Ohio and Pennsylvania are all meeting actively this week.
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Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Dec. 1, 2017.
Western: regional species perimeter foundation
Southern: regional species slab construction
Crow's Market Recap: A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.
SPF pricing weakened further as deeper discounts appeared. Mills took a more aggressive stance in many instances while others, those with extended order files for narrow-width items, stuck doggedly to those elevated quotes. Mills frequently reported selling well below a week’s production.
- Much of the strength in the Southern Pine market centered on narrow widths while wides struggled to find any upward momentum. Interest in narrow widths among buyers remained solid as some substitution of Southern Pine for SPF continued to take place. Several producers reported a more restrained sales pace, particularly toward the end of the week.
- Urgency to buy or sell Coastal species was constrained. Buyers sensed some access to lower prices in dry items. Most green Doug Fir prices tended to hold at last week’s reported levels, with the exception of higher 2×12 pricing.
- Despite good demand for Inland products, producers reported a general slippage in most prices being achieved. Fir-Larch was less vulnerable than Hem-Fir, but both species reflected attempts by secondaries to ease the market off a bit in order to gain a chance to buy.
- Traders agreed that stud prices were “all over the place,” signaling weakness across much of the market. Most prices were flat to down, with a few exceptions. A few SPF producers tried to sell volumes of 2×4 8-foot and 9-foot carloads at steep discounts.
- Current markets for industrial lumber and finished mouldings were quite different in tone and pace, and Ponderosa Pine was reported to be tight, especially in 5/4 Shop. The situation in Ponderosa Pine boards, in general, showed tight supplies and “lots of demand,” according to one source.
- In the Western Red Cedar market, takeaways from yards continued, albeit at a more modest pace than earlier in the fall, and buyers continued to look for a mix of items to fill in inventories. Mills reported carrying less inventory this time of the year than in other years.
OSB was a mixed bag this week. Markets weakened in some regions, while they stabilized in others. Patterns were the same, as buyers cautiously purchased only what they needed. More people came to the table this week, infusing optimism into the overall mood.
- Southern Pine plywood activity picked up in the middle of the week, spurred by buyers looking to fill immediate needs with prompt shipping volumes. Overall, however, the pace remained restrained, leaving rated sheathing available for shipment in the week of Dec. 4.
- Sales activity improved in the Western Fir plywood market, but reactions to the increased pace were restrained. After waiting while prices dipped over the past several weeks, more buyers stepped in to replenish conservatively. Double digit CDX discounts early faded away as the week progressed, but pricing ended moderately lower.
- The Canadian plywood market firmed this week as mills pushed out order files and buying picked up. Pricing was unchanged.
- Some producers of particleboard and MDF noted a moderate increase in sales after a sluggish holiday week. Buyers reported readily obtainable particleboard and MDF supplies for December shipment. Yards managed inventories carefully prior to year-end.
For more on RISI, click here.
Rust-Oleum adds to portfolio
Eldora, Iowa-based Whink Products, known for its rust-stain-removal business, was acquired by Rust-Oleum, a division of Medina, Ohio-based RPM.
Whink, which calls itself “America’s Household Problem Solvers,” makes a variety of specialty cleaners and is the market share leader in the rust-stain removal segment, according to the release announcing the acquisition. Whink’s annual sales are about $6 million.
“In addition to providing us with the leading brand in the rust stain removal segment, Whink will also accelerate our expansion into other indoor cleaning solutions, adding a breadth of offerings to our rapidly growing Krud Kutter program,” stated Frank C. Sullivan, RPM chairman and CEO. “We welcome the Whink team to the RPM family of entrepreneurial specialty chemical companies.”
Whink’s list of offerings also includes carpet and laundry stain removers,. cooktop cleaners, drain and septic system treatments and wood cleaners.