Regulatory Wrap-Up: Minimum wage increase gains ground in New Jersey
New Jersey: Gov. Phil Murphy and Democratic legislative leaders are “not anywhere close” to aligning on the details of a $15 per hour minimum wage bill. Some Democratic leaders favor exemptions; however, Murphy campaigned on a “clean” bill without carve-outs for certain workers. The timing and phasing in of a wage increase are also in question and currently being negotiated. Once Democratic leaders agree on a compromise, expect the bill to move quickly.
Pennsylvania: Gov. Tom Wolf is proposing an update to the state’s overtime salary threshold. The proposal would raise the state’s overtime eligibility threshold above the federal minimum rate ($455 per week, or $23,660 per year) to $610 per week. or $31,720 per year in 2020. The overtime threshold would further increase to $39,832 per year in 2021 and to $47,892 per year by 2022. The proposed regulation would need approval from a five-member board that has a 3-2 Democratic majority. The approval process could take more than a year, meaning that Wolf, who is seeking a second term in November’s election, must get re-elected to ensure the process continues.
Virginia: The slate of proposed minimum wage bills died in a senate committee early in the state’s relatively short legislative session. As a result, the general assembly is not likely to take up the wage issue but is still expected to debate paid leave and other employment issues.
Maryland: Late last Friday, the legislature voted to override the governor’s veto of paid leave legislation that passed both chambers during the 2017 session. The bill is slated to become law 30 days from passage. Business groups are lobbying for an extension of an additional 60 to 90 days to allow for more time to comply. The law requires employers with 15 or more workers to provide five days of paid leave a year and applies to full, part time and seasonal employees. The bill contains no preemption language so localities in the state could still pass more generous proposals which happened in Montgomery County.
Washington: An equal pay bill passed the house. It would mandate that employers pay workers, performing similar tasks relative to difficulty and responsibility, the same amount regardless of gender. Previous iterations have passed the house and died in the senate, but because the upper chamber has now shifted to a Democratic control, the bill has a better chance of final passage.
California: A Los Angeles Superior Court has given class action certification to a lawsuit charging 17 restaurants with price fixing. The restaurants included a healthcare surcharge on customer’s bills. The claim is that the restaurants named in the complaint colluded in establishing the surcharge in violation of state antitrust laws. Surcharges, such as this, have become popular in some areas of the country and a number have faced legal challenges. 539e
Taco Bell: Over five hundred employees of a Michigan-based franchisee are pursuing a class action claim for alleged wage and overtime violations. Workers claim that the franchisee engaged in systematic wage theft by “doctoring” employees’ hours. The case is expected to go to trial in 2019.
McDonald’s: The NLRB is looking to settle a high-profile lawsuit against McDonald’s USA. NLRB General Counsel Peter Robb asked an administrative law judge to pause the case against McDonald’s and various franchisees so they can discuss a “global” settlement of “all pending charges.” Board attorneys under the previous administration said that McDonald’s USA should be on the hook for possible labor violations by franchisee restaurant owners. This case has been closely watched as a potential precedent-setting joint employer case.
U.S. Senate: Following a three-day government shutdown over the weekend, Senate Democrats and Republicans agreed to a continuing resolution to fund the federal government through Feb. 8. The House is expected to follow suit, sending the short-term funding bill to the President’s desk for signature. The major political impasse has centered around immigration — a solution for DACA recipients combined with increased border security funding. Leader McConnell agreed to hold an open vote on DACA and border funding in the near future, in exchange for Democrat votes on the funding bill.
Federal: The House passed the Miscellaneous Tariff Bill, which applies temporary tariff cuts to nearly 1,700 imported goods and could result in the elimination of over $1 billion in import tariffs. The Senate is expected to take up the issue later this year.
NAFTA: The sixth round of talks around the potential revamp of the three-country trade agreement began in Montreal this week. Reports indicate growing animosity between the U.S. and Canada as both countries have moved further apart in negotiations on key aspects of the deal. The pending presidential election in Mexico could further erode talks on the more contentious topics.
- The impasse on DACA, the current government shutdown, and the acknowledgement last week by the White House that a border wall is highly unlikely is going to put more political pressure on the Administration to deliver on their immigration promises. This will make additional high-profile workplace raids even more likely as the President works to placate his pro-enforcement base. This is yet another important reason why employers need to take these raids seriously and prepare accordingly.
- The CEO pay conversation is escalating quickly. Just two weeks into most state legislative sessions, numerous states are proposing laws to address the compensation gap between CEOs and frontline workers. Many are considering a tax, just as the one Portland, OR passed in 2016. Due to the new SEC disclosure rule, initial data from public companies will become available early this year while at the same time, numerous states are revising their tax code in response to federal tax reform. In short, the perfect environment exists for this issue to be embedded in those broader conversations and could go mainstream very quickly.
Legislature Status for Week of 1/22/18
- The United States Senate is in session this week
- The United States House is not in session this week, but will reconvene for shutdown vote
- Thirty-seven state legislatures are meeting actively this week: Alabama, Arkansas, Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Iowa, Idaho, Indiana, Kansas, Kentucky, Massachusetts, Maryland, Maine, Michigan, Missouri, Mississippi, North Carolina, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Virginia, Vermont, Washington, Wisconsin and West Virginia.
Check out our Working Lunch podcast each week that includes further analysis into these legislative issues, policy, politics and much more. You can find Working Lunch on the Nation’s Restaurant News website, or by clicking here, and when you download the podcast and subscribe on iTunes here.
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.
Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Jan. 19, 2018.
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 prices continued to escalate, with 2×4 #2&Btr out of western mills surpassing the previous record high set in November last year. Order files extended out into the weeks of Feb. 5 and 12 also contributed to the more hesitant approach a few traders noted. Railcar availability remained a significant problem as buyers awaited late shipments.
- Sales activity remained strong in the Southern Pine market. Despite another shot of cold temperatures, snow and ice in Southeast, yards continued to report “good sales.” Cold weather forced mills to shut down or operate at a fraction of their capacity, giving no relief to an already tight supply.
- Coastal species producers sold at a strong pace, sending several prices considerably higher. Urgency among buyers to find necessary tallies was met with limited availability at mills. Order files extending into early February often prompted mills to raise prices more aggressively.
- Inland lumber producers reflected the attitude of a colleague, who said, “The beat goes on.” Strong demand, coupled with very tight log supplies, created a market that pushed upward in prices of both Fir-Larch and Hem-Fir.
- Stud pricing remained strong, ranging from firm to up sharply. The largest upward price moves existed in 9’, where the least availability existed. Limited log availability remained a barrier to production.
- Radiata Pine remained solid and stable in price.
- Ponderosa Pine industrials continued to reflect good demand in both 5/4 and 6/4 Shop, especially #3 Shop and P99. In boards, demand continued to push upward on prices, particularly in Ponderosa Pine. California and Inland Selects made strong price moves.
- Any changes in the pace of sales activity in the Western Red Cedar market were minimal. Buyers continued to replenish with mixed loads whenever necessary and purchase some items for later in the first quarter or early second quarter delivery. Some producers focused more of their attention on building inventory for spring sales.
OSB markets gathered more momentum this week, as mill and distribution sources noted good activity in most regions. Buying picked up, order files moved out a week or two, and prices moved up slightly at most mill and delivered levels.
- Cold temperatures, snow and ice wreaked havoc with the Southern Pine plywood market. Producers often shut down mills in the middle of the week while the cold slowed production at those that continued running. Nevertheless, demand remained relatively strong, pushing prices higher.
- The pace of sales in the Western Fir plywood market eased a bit from the prior week, but mill order files continued to move out further into February. Mills exited the market at various intervals, trying to assess their positions and keep order files in check.
- Canadian plywood markets were crackling with excitement after activity picked up and ran hard midweek. Prices and order files lurched ahead, driven by log shortages and transportation issues.
- Some particleboard and MDF producers reported marginally improved sales activity. Others described steady sales and no notable increase in demand. This kept order files at a somewhat comfortable distance for producers and their customers. Prices held.
For more on RISI, click here.
Industry 4.0: It’s happening right now
The Fourth Industrial Revolution. Digital transformation. Connected retail. Industry 4.0. Call it what you will, the current trend for automation and data exchange in retail technology is transforming the front-of-store, customer experience, and back office operations—disrupting how we deliver goods today and transforming the shopping experience of tomorrow.
There’s no doubt that Industry 4.0 is having an impact on the independent retail space. In the future, machine-learning capabilities and connected equipment will enable retailers to further automate back-office operations, allowing employees to up-skill, take on new duties, add greater value, and focus less on repetitive tasks. They can therefore expect to be employed in more interesting and challenging roles in the future, helping their personal development and growth.
Industry 4.0 will involve a significant shift in how people work—specifically their mindsets, habits, and responsibilities. Here are three such attitudes that will need to change in retail as Industry 4.0 alters how we work:
1. ‘That’s not my responsibility, talk to a different department about it’
Industry 4.0 is breaking down the traditional silos that separate the different departments within a retail operation, with business management software playing a crucial role.
Business management software acts as a single-source for business intelligence in the age of Industry 4.0, presenting employees with real-time data when they need it, thus bringing departments closer together. That data might include information about the status of a project, updates on inventory, or analytics about customer trends. For example, with the easily accessible data in their software system, family owned and locally operated, E&H Hardware Group now analyzes pertinent data, benchmarks it to other stores, and compares their planogram currency. With the data available in the system, they’re able to make informed buying decisions and more strategically plan for growth—not only growing sales and margin, but also store count, which helps them keep up with customer demand.
When sales teams, management, and retail staff alike can access real-time information like this, they can optimize conditions on the floor while improving sales and the bottom line. In short, sharing data makes retail more agile, bringing the days of moving in silos to an end.
2. ‘If you want it like that, you’ll have to wait longer’
Industry 4.0 is dawning a new age of personalized retail, combining customized products with the speed and on-time delivery expectations of today’s consumers. As we’ve heard over and over, this is the age of the customer, and customer demands bespoke products, fast.
One of many companies putting this into practice is hardware and home center PaulB Hardware, a 50,000-sq.ft., two-location retailer. PaulB Hardware uses a special-order application to more quickly, easily, and effectively manage the purchasing and distribution process. The retailer completes 7,500 special orders a year and a streamlined ordering process has significantly improved their customer service. The very fact that orders c
an be customized without pulling employees away from other tasks is a testament to the rapid progression of Industry 4.0, and to PaulB Hardware’s successful digital transformation.
Intelligent and integrated software systems play a vital role for retailers that want to put their customers first, delivering real-time details to management about specific customer orders as they progress.
3. ‘A machine can’t do it better than me’
Industry 4.0 requires a cultural change in the way humans work with machines. Not only will retail employees be able to work closer across different departments in an Industry 4.0 world, sharing real-time data and insights to make accurate decisions in the workplace, they will also be able to have some of their tasks automated, allowing them to work on new, less tedious tasks instead or spending more time with customers.
This involves a significant change in the retail environment, and a fresh approach to workplace dynamics. One example of this change is a cloud-based workforce management tool. Accessible by managers and employees alike, gone are the days of Excel file schedules and time-off requests via notes or easily forgotten conversations. Instead, employees can log into a simple software app to access their schedules and request time off—and managers can easily see those requests.
C. A. Lindell & Son, Inc., a 20,000-sq.-ft. hardware store and 60,000 sq.-ft. drive-through lumber warehouse, had upwards of four people involved with scheduling in the past, which included a lot of copying, pasting, and chasing around. Since implementing workforce management software, now only two managers handle the task. For every hour they used to spend on scheduling employees, managers now spend thirty minutes—half the time. The time savings is a notable improvement, allowing more time for customer-focused activities.
Managing the inevitable shift
While the retail technologies associated with Industry 4.0—from the Internet-of-Things to big data analytics and artificial intelligence to 3D printing—are transforming business processes, an often-overlooked challenge is managing the inevitable shift in workplace dynamics, which is crucial to supporting the successful integration of Industry 4.0 technologies.
The three points above are fitting examples of attitudes that need to shift, as retailers break down barriers between departments and staff, embrace change, and work in tandem with software systems. It’s up to employers and their teams alike to change mindsets as they grow their retail businesses in the Industry 4.0 world.
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Bill Wilson brings over 35 years of technology experience to his role as senior vice president of product development at Epicor Software Corporation. Wilson came to Epicor in May 2011 following the merger with Activant Solutions Inc.