Regulatory Wrap-Up
Market Insights

Regulatory Wrap-Up

BY HBSDealer Staff

Wages

Federal – With the newly-elected U.S. Congress set to take office in January, a House committee plans to hold a hearing entitled, “Mandating a $15 Minimum Wage: Consequences for Workers and Small Businesses.” The committee is currently controlled by Republicans and the Democrats who are set to take over in 2019 have stated they will hold hearings and advance a $15/hr minimum wage mandate early in the next Congress.

Michigan – The Republican-controlled senate passed new legislation to delay the state’s scheduled minimum wage increase and reestablish the tipped wage. The bill extends the phase-in period to 2030, increasing at a rate of 23 cents annually until it hits $12. The phase-in could be stretched out even later if the unemployment rate is 8.5 percent or higher. The tipped wage would be capped at $4.00/hr under the new language. The new bill now moves to the house for consideration where it is likely to pass. Should that happen prior to the newly-elected Democratic governor taking office, advocates for the increase may initiate litigation or could refile the issue for the 2020 ballot.

New Jersey In an opinion piece, Assembly Speaker Coughlin announced that a bill to raise the state’s minimum wage to $15/hr will be introduced in the coming weeks. Legislative leaders and the governor have called for the legislature to advance an increase but negotiations around the tip credit and other issues have hampered movement to date.

Wilmette Village, IL – The suburban Chicago village board reversed their decision to opt out of Cook County’s $13/hr minimum wage ordinance. A nonbinding resolution appeared on the Nov. ballot and passed by wide margins, indicating public support for the increase. Several other local jurisdictions in Cook County could follow suit. The state is also likely to pick up the issue in 2019.

Paid Leave

Kansas The outgoing Republican governor signed an executive order providing paid parental leave to all government employees under the authority of the executive office. The move comes as a Democratic governor-elect is set to take over in 2019 and could serve to enable a broader conversation on paid leave mandates for private employers.

Michigan – The Republican-controlled senate passed new legislation that adjusts the paid sick leave provisions passed prior to Election Day. It lowers the required number of annual accrued hours that employers must provide from 72 to 36 and creates an exemption for businesses with fewer than 50 employees. The new bill now moves to the house for consideration. Advocates for the initiative have already pledged to put the issue back on the 2020 ballot if the law is substantially changed.

Washington – The state paid family leave law goes into effect Jan. 1, 2019. Companies must participate in the state-run program or create their own program, provided it meets certain criterion.

Albany County, NY – The county legislature postponed action on the much-debated paid sick leave ordinance until 2019.

Wilmette Village, IL – The suburban Chicago village board reversed their decision to opt out of Cook County’s paid sick leave ordinance. A nonbinding resolution appeared on the Nov. ballot and passed by wide margins, indicating public support for the proposal. Several other local jurisdictions in Cook County could follow suit. The state is also likely to pick up the issue in 2019.

Rick Santorum – Former U.S. Senator, presidential contender and current conservative political pundit, Rick Santorum, authored an opinion editorial calling on Republicans to work with Democrats to establish a national paid leave program for working families.

Scheduling

Boston, MA – The city council heard testimony from business groups and some advocates regarding the proposed “fair workweek” legislation that would apply to city contractors. However, the language defines city contractors broadly and much of it mirrors other laws passed in localities across the country.

Philadelphia, PA – The city council continued debate on the proposed “fair workweek” legislation and made some amendments to the language. It remains to be seen whether there is enough support on the council to pass the bill on to the mayor. The council’s next meeting is scheduled for Dec. 6.

H&M – The fashion retailer announced an update to their benefits package for part-time workers to include paid leave and a guaranteed minimum number of hours per week.

Labor Policy

California – A business group has initiated a legal challenge over the state’s decade-old Private Attorney General Act (PAGA) which allows individuals to bring suit against employers for labor code violations.

Taxes

U.S. House U.S. House Republicans introduced a tax package that addresses some technical changes to the Tax Cuts and Jobs Act that passed earlier this year. Most notable for many operators is correction of the drafting error related to the Qualified Improvement Property (QIP) provision. While the package may see some action in the House, it is unlikely to move in its entirety in the Senate prior to adjournment for the year.

Trade

China – President Trump announced a tentative truce with China in the ongoing trade war between the two countries. The two leaders met during the G20 in Argentina and reached an agreement that lacks specific details beyond the United States not implementing the scheduled increase of tariffs on $200 billion worth of Chinese goods. The tariffs on those goods will remain at 10 percent and in return China has agreed to increase imports from the United States. The agreement reportedly is set to expire on March 1, 2019 and discussions between the two countries will continue during that time.

NAFTA – The Presidents from Canada, Mexico and the United States signed off on the renegotiated North American Free Trade Agreement late last week while all three leaders were attending the G20 summit. The proposal still needs approval by the U.S. Congress (as well as the legislatures in Mexico and Canada) and also faces considerable opposition from some in Canada’s agricultural community. The continued imposition of aluminum and steel tariffs by the United States on both trading partners also hangs over the ongoing discussions.

Key Takeaways

  • Washington state’s new paid leave program, effective Jan. 1, is significant and should be watched closely. The program is an important test of paid leave as a government-sponsored program or “insurance” fund. The monies – paid in part by employers and deducted from employees’ paychecks – are deposited into the state fund to be distributed to employees when they become eligible. If the mechanics of the program work, expect other states to adopt the model. And, perhaps more importantly, a functional program lays the groundwork for a future portable benefits program. 
  • The scheduling issue continues to heat up. What was largely a west coast issue has now migrated east, first to New York City and now to more blue-collar cities like Boston and Philadelphia. Concurrently, major retail brands are deploying technology solutions that undermine many of the industry’s political arguments and at the same time, there is continued disagreement within the industry on what is an acceptable compromise – especially between large companies and independents. With more cities – and states – tackling this in 2019, the industry needs to aggressively work toward palatable solutions.

Podcast

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.

Legislature Status for Week of 12/3/18

  • The United States Senate is in session this week
  • The United States House is in session this week
  • Five state legislatures are meeting actively this week:
    • MA, MI, NJ, OH & UT

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.

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