Regulatory Wrap-Up
Market Insights

Regulatory Wrap-Up

BY HBSDealer Staff

Wages

Arizona – A house-approved bill that would establish a training wage for full-time students has stalled in the senate. It would create a subminimum wage of $7.25/hr for employees under 22 that work 20 hours per week or less. The legislation is intended to soften the voter-passed initiative to raise the minimum wage to $12/hr by 2020.

Maine – Hearings continued on numerous proposals to slow down the implementation timeframe – or outright reduce the minimum wage rate – approved by the voters in 2016. No votes were taken and the outlook for any of the proposals remains unclear.

Maryland – The senate passed a $15/hr minimum wage bill with a veto-proof majority. The bill will need to be reconciled with the house-passed version. If the legislature moves quickly to reconcile the bills and advance final legislation to the governor’s desk at least six days prior to adjournment then the governor must sign or veto the bill after which an override veto can occur. If the legislature presents the bill to the governor after session adjourns (April 8) and then he vetoes it, the legislature could not vote to override until the legislature reconvenes (typically, next legislative session which would delay enactment of the law until next year).

New Hampshire – Both chambers passed different bills to raise the state’s minimum wage from $7.25/hr to $12/hr. The senate bill raises the rate to $10/hr in 2020 and to $12/hr by 2022 and allows businesses that offer at least 10 paid sick days per year to pay only $11/hr. The house bill has a different phase-in schedule ($9.50 in 2020, $10.75 in 2021 and $12 in 2022) and exempts employees under 17 years of age, defaulting to the lower federal rate. The two bills would need to be reconciled to advance to the governor’s desk. The governor has registered his opposition to a $15/hr level in the past and may still veto this legislation.

North Dakota – The legislature passed a bill that preempts localities from raising minimum wage levels above the state established wage. The governor will likely sign the bill into law.

Philadelphia, PA – A referendum that calls upon the state legislature to raise the minimum wage to $15/hr, or allow the city to increase its own wage, will be on the city ballot in May. Even if passed, it is merely a “sense of the city” resolution and is non-binding.

Paid Leave

Colorado – The parental leave bill that had been working its way through the legislature stalled in a senate committee. It was tabled for later consideration after a long public hearing which resulted in a majority of lawmakers expressing significant concerns. The program, as currently proposed, would be funded by a payroll deduction of .64% split between the employer and employee.

Connecticut – The governor announced this week that he expects the legislature to pass parental leave legislation this session. The paid leave program under consideration would be funded by a half-percent payroll tax and reimburse employees up to $1,000 a week for 12 weeks after the birth of a child or the medical care of a family member.

New Hampshire – The house passed the senate-approved parental leave proposal. It mandates 12 weeks of paid leave for employees for the birth, adoption or fostering of a child. The provisions also allow for the care of certain relatives with serious illness and would be funded by a 0.5 percent tax on employee wages. The governor has indicated he will veto it.

Texas – The paid leave preemption bill cleared its final committee stop and is headed to the senate floor for a final vote. It is expected to be approved by the legislature and signed into law and would nullify previously-passed local ordinances in Austin and San Antonio.

Labor Policy

EEOC – The Equal Employment Opportunity Commission (EEOC) announced that it will not collect 2018 pay data broken down by race, ethnicity, and gender for the EEO-1 filing period that began Monday. Earlier this month, the rule requiring the agency to collect pay data was reinstated by the courts and this week, a judge ordered the agency to notify employers when the data will be collected, giving the EEOC a deadline of April 3.

EEOC – Numerous employer associations including the National Retail Federation and the International Franchise Association participated in a roundtable at the EEOC seeking workable solutions to sexual harassment in the workplace.

Alabama – An onerous franchise relationship bill was introduced. This bill is very similar to the legislation the past few years in Florida and is being sponsored by an influential legislator.

Burgerville – International Workers of the World (IWW) have filed two new election petitions with the NLRB. The union successfully organized three locations of Burgerville within the past year.

Little Big Burger – Union organizing efforts have spread from Burgerville to another flagship Portland-area QSR, Little Big Burger. Workers have demanded union recognition, threatening to file an election petition with the NLRB if the brand doesn’t recognize the union.

Taxes

NebraskaThe governor signed into law a bill establishing that marketplace providers must collect sales taxes on sales made by third-party vendors on their site. The law also mandates out-of-state sellers with more than $100,000 in sales or over 200 transactions per year must collect and remit the state’s sales tax on sales to in-state customers.

North DakotaThe full legislature passed the bill establishing that marketplace providers must collect sales taxes on sales made by third-party vendors on their site. The bill also includes language that mandates out-of-state sellers with more than $100,000 in sales or over 200 transactions per year must collect and remit the state’s sales tax on sales to in-state customers. The bill advances to the governor for his expected signature.

Miscellaneous

New Jersey – The governor signed a bill making New Jersey the second state to mandate that most restaurants and stores accept cash at their physical locations.

Sustainability – Four major food suppliers are calling on Congress to strongly address climate change. Mars, Danone, Unilever and Nestle are part of the Sustainable Food Policy Alliance and their actions could put public pressure on other parts of the restaurant supply chain.

Key Takeaways

  • Companies need to pay attention to the increasing union activity in the Northwest, specifically in and around the Portland area. While local and more organic than a traditional SEIU-led effort, the Fight for 15 campaign over the past decade has laid the groundwork for these smaller independent organizing efforts to pop up, particularly in major metros where activist groups are continually organizing on these issues. Brands need to understand how quietly these informal, smaller efforts take hold and how quickly they can get underway.

 

  • Shake Shack’s announcement that they are experimenting in certain markets with a four-day work week in an attempt to attract and retain managers is noteworthy. While other companies have experimented with this, including some in the hospitality sector, Shake Shack is the first notable national brand to test it in a meaningful way. If they discover success and roll it out to other markets, it could over time alter the labor market.

Legislature Status for Week of 3/25/19

  • The United States Senate is in session this week
  • The United States House is in session this week
  • Forty-one state legislatures are in regular session:
    • AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, ME, MD, MA, MN, MS, MO, MT, NE, NV, NH, NJ, NY, NC, ND, OK, OR, PA, RI, SC, SD, TN, TX, VT, WA, WV

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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