Market Insights

Eye on Retail: Retail Legislative And Regulatory Outlook for 2020

BY Joe Kefauver

For better or worse, most of the legislative and regulatory issues important to the retail community will be addressed (or not) through the lens of the 2020 presidential election cycle. Whether it’s trade, immigration or data privacy, the issues will, unfortunately, be merely a vehicle to play to various voter constituencies, with employers and retailers likely near the bottom of that priority list.

As far as legislative outcomes, 2020 will likely look eerily similar to 2019 with slightly more polarization. A divided Congress, much more focused on either impeaching or protecting an embattled president heading into reelection will likely produce few if any substantive policy outcomes. But the state level, and increasingly the local level, may be where the real action is for employers.

Here are some of the key issues to pay attention to in 2020:

Data Privacy: 2020 will likely see little federal action on data privacy. Essentially, House Speaker Nancy Pelosi is not going allow passage of any legislation that preempts California or any other state with data privacy laws on the books and the Republicans won’t support any bill that doesn’t have preemption.

As businesses adjust their models to comply with California and increasingly other states, the urgency of a federal solution will diminish. At the state level, look for employers to escalate a burgeoning skirmish between those that want to collect data to sell and those that collect it for targeted consumer offerings.

Trade: It remains unclear if and how the ongoing trade war with China will get resolved. Because at its heart, the trade war is much more of a political exercise than an economic one, the definition of what is a “win” and a “loss” is very malleable. The president’s insistence on fighting simultaneous trade wars on multiple fronts with multiple countries has left China less alienated than normal and thus more empowered. By next summer, expect the president to cut some sort of a “deal”, declare a big victory and celebrate with his supporters. At that point, retail operators can hopefully remove some of the uncertainty surrounding their supply chains going forward.

Paid Leave: At the state level, and increasingly in Congress, the issue of paid leave is quickly becoming “resolved” – i.e. both parties overwhelmingly believe in some level of paid leave benefit. The issue is now more of a “how and how much?” question. There is still a strong disparity in how both parties address the issue, but we are largely past the point of “should we?”

In fact most employers, in an effort to attract and retain the workers they need in an era of such low unemployment, have rolled out paid leave policies in excess of what most legislators are discussing. Save for California and a few other blue states, the marketplace is driving the issue faster than politicians.

While there will be some additional bill introductions in Congress, and a few of them even bi-partisan, nothing palatable to Democrats in the House would ever pass the Senate and vice-versa. The action will be at the state and local level as more jurisdictions pass laws and those with existing laws will work to make those even more generous.

Minimum Wage: As predicted, the Democratic House passed a national $15 per hour wage bill and also as predicted, that legislation has been dead on arrival in the Senate. While many in the business community may be of a mind to compromise for a lower wage level coupled with possible concessions on joint employer, tips or other labor issues, any movement in Congress either this year or next seems highly unlikely.

But at the state level look for continued pushes in blue states with new majorities, especially in the West and Northeast. Additionally, 2020 brings opportunity for state ballot initiatives to increase the minimum wage which almost always pass. Florida is at the top of the list of states with a $15 per hour wage on the 2020 ballot.

Overtime: Now that the labor department has settled on a new federal overtime standard, it is likely that many states will address the issue and set their own standards in excess of the federal threshold. Look for activity in Michigan, Pennsylvania, Maine, Massachusetts and other heavily Democratic states.

Restrictive Scheduling: No federal action is likely in 2020, but look for states and localities to continue pursuing restrictive scheduling legislation across the country. Pay particularly close attention to New Jersey, Illinois and Washington. Many of these bills call for two to three weeks advance posting of schedules, penalty pay when an employer changes a schedule, restrictions on hours between shifts and some call for the offering of additional hours to existing workers before additional workers can be hired.

Joe Kefauver is managing partner of Align Public Strategies, a full-service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making.

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