Regulatory Wrap-Up
Market Insights

Regulatory Wrap-Up

BY HBSDealer Staff

Wages

Connecticut – Ongoing discussions indicate that the legislature is leaning toward increasing the minimum wage to $15/hr over a yet-to-be-determined phase-in period. A similar bill failed last cycle but has a better chance of passage in Jan. when newly-elected members are seated.

Illinois – Governor-elect Pritzker announced his desire to see a minimum wage increase in the first six months of his new term, beginning Jan. 2019. He did not cite specific details but he previously advocated for a $15/hr wage on the campaign trail.

Michigan – The Republican-controlled house followed last week’s senate action and passed new legislation to delay the state’s scheduled minimum wage increase and reestablish the tipped wage. The senate approved the house’s changes, sending the bill to the governor. The final language extends the phase-in period to 2030 for a $12.05/hr minimum wage with no CPI escalator. Furthermore, 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 $4.38/hr under the new language. Should the outgoing governor sign the bill 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 – Assembly Speaker Coughlin introduced a bill in the house that raises the state minimum wage to $15/hr by 2024. The bill establishes a longer phase-in period for small businesses. There are also longer phase-ins for employees under 18 and some seasonal workers. The Senate President announced his support for the bill, however Governor Murphy raised concerns over the length of the phase-in. The house labor committee is set to take up the bill this week.

New York City, NY – New York City is the first jurisdiction in the country to require a minimum pay rate of $17/hr for ridesharing app drivers.

Washington, DC – A judge ruled that the Restaurant Opportunities Center can continue collecting petitions in an effort to reverse the city council’s repeal of Initiative 77. Meanwhile, the court is reviewing a lawsuit over the wording of the petition. Initiative 77 would have eliminated the tip credit and activists hope to place the measure on the ballot again.

Fremont, CA – The city council is considering two separate ordinances that would advance the city’s planned increase of the minimum wage to $15/hr ahead of the scheduled state phase-in.

Paid Leave

Michigan – In addition to scaling back the minimum wage, the legislature also adjusted the paid sick leave requirements it had approved prior to Election Day. The current bill lowers the required number of annual accrued hours that employers must provide from 72 to 36 and it creates an exemption for businesses with fewer than 50 employees. The new bill now moves to the governor’s desk for his expected signature. Advocates for the initiative had already pledged to put the issue back on the 2020 ballot if the law was substantially changed.

New Jersey – The Department of Labor and Workforce Development released regulations for the state’s paid sick leave law that passed earlier this year. While the law went into effect Oct. 29, the comment period for the regulation will remain open until Dec. 14.

San Antonio, TX – Local business groups are calling on the city council to repeal the recently-passed paid sick leave ordinance. The law mirrors an Austin law that was recently overturned in the Third Circuit Court of Appeals. The groups have not stated publicly whether they will pursue similar litigation. The state legislature is likely to take up a preemption law specific to benefits in early 2019.

Scheduling

New York City – Business groups this week filed a lawsuit to strike down New York City’s restrictive scheduling mandate. They argue that the issue is preempted by New York state law, citing existing state-level scheduling requirements.

Philadelphia, PA – The city council passed the “fair workweek” law which mandates employers in the city provide work schedules ten days in advance with a phase-in to fourteen days in 2021. The new law applies to employers with more than thirty locations and 250 employees. It mandates that employers pay “predictability pay” to employees if their shifts change after schedules are posted. The mayor is expected to sign the bill into law.

Wage Theft

New York – The senate held a hearing on wage theft, examining the effectiveness of the Wage Theft Prevention Act and identifying potential areas for improvement. The hearing indicated that the legislature may take up the issue in 2019.

New York – The attorney general has filed a Freedom of Information Act (FOIA) request with the Labor Department in an effort to obtain the list of employers participating in agency’s PAID program. The Labor Department program was designed to assist employers with compliance but the New York Attorney General as well as others have characterized it as an amnesty program and vowed to take action against participating employers that may be out of compliance with state law.

Labor Policy

Papa John’s – A former worker has initiated a class action lawsuit against the pizza chain for suppressing worker’s wages and opportunities through the use of no-poaching agreements in franchise contracts. The litigation comes after the chain announced over the summer they would no longer include no-poaching clauses in their franchise agreements as a result of investigations by the Washington Attorney General.

Washington – The attorney general continues to draw national headlines, forcing companies to end the use of no-poaching agreements countrywide. The latest companies to enter into an agreement with the attorney general are Batteries Plus Bulbs, Comfort Keepers, Edible Arrangements, La Quinta and Merry Maids.

Taxes

Washington D.C.The city council, following the Supreme Court’s landmark South Dakota v. Wayfair ruling, passed their law that will require remote retailers to collect and remit sales taxes beginning Jan. 1. The bill, which is expected to be signed by the mayor, establishes that retailers with an economic threshold in excess of $100,000 in annual sales or 200 transactions into the city must collect and remit the sales tax along with mandating that online marketplace providers collect and remit for all of their third-party sales.

Key Takeaways

  • There is a growing trend toward eliminating cash transactions. Operationally, it may make a lot of sense but the industry needs to think through the political ramifications of going in that direction. For more than a decade, the industry has argued vigorously that because of the high fees and surcharges implemented by the banks and credit card companies, that restaurant and retail operators should be allowed to offer cash discounts to encourage fewer credit transactions. Going to a no-cash system contradicts many of our arguments on this issue and could erode the industry’s political credibility. Additionally, the issue provides a reputational challenge for the industry as we could be framed as being insensitive to disadvantaged or low-income populations, feeding a narrative that our opponents are all too eager to advance.
  • The industry needs to be careful to not become a political pawn in the post-election efforts by Republicans to lessen the impact of their midterm election losses. For instance, while we were a major player in some of the successful efforts related to minimum wage and paid leave in Michigan, we would be wise to distance ourselves from activity that is purely political in nature, such as attempts to strip incoming governors of powers long considered the purview of the executive office.

Legislature Status for Week of 12/10/18

  • 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, NC, NJ & OH

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.

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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