Regulatory Wrap-Up
Market Insights

Regulatory Wrap-Up

BY HBSDealer Staff

Wages

Connecticut – The senate passed the house-approved $15/hr minimum wage. The governor is expected to quickly sign it into law. Under the new law, the wage rate will increase to $15/hr by 2023 and will automatically increase based on cost-of-living thereafter. The tipped wage for waiters will remain at $6.38/hr, the wage for bartenders will go to $8.23/hr and a 90-day training wage at 85 percent of the minimum wage will be established for workers that are 16 and 17 years of age.

Florida – In April, attorney John Morgan contributed nearly $500,000 to place a $15/hr minimum wage initiative on the 2020 Florida ballot, bringing his total contribution to the campaign to nearly $1.5 million. He recently funded a successful medical marijuana initiative in the state. Under the proposed minimum wage amendment, the state’s rate would increase to $10/hr on Sept. 30, 2021, escalating $1/yr until it hits $15/hr on Sept. 30, 2026. The state’s current minimum wage is $8.46/hr.

Minnesota – The house advanced legislation that would grant the state revenue department the authority to share tax information with the Federal Reserve Bank of Minneapolis in order to study the impacts of the $15/hr minimum wages in both Minneapolis and St. Paul. There is no companion legislation yet in the senate.

New Hampshire – The senate is considering house-passed legislation to raise the minimum wage to $12/hr by 2022, including a tip credit of 50 percent. Previous senate legislation tied the wage rate to paid sick leave, allowing employers to pay slightly less if they offered sick leave. The house version now under consideration has no such provision. The governor is strongly opposed and has pledged to veto.

Vermont – The house and senate both approved legislation to raise the minimum wage to $15/hr; however, the house version phases in over a longer period of time, 2026 versus 2024. Legislative leaders will need to reconcile the two bills if they hope to advance them to the governor’s desk. When passing out of their respective chambers, both bills failed to earn enough votes to override a gubernatorial veto. The governor has been vocal in his opposition but the extended phase-in of the house bill could be enough for him to eventually sign it into law. With legislative session winding down, a paid leave legislation is in a similar position and part of ongoing negotiations.

Steak ‘n Shake – A federal judge awarded a group of St. Louis-area Steak ‘n Shake managers $7.7 million, doubling the amount a jury had previously awarded the workers. The group of managers alleged that they worked 50-70 hours a week without being paid overtime. The verdict will be appealed by the company.

Paid Leave

Maine – The senate and house officially concurred on bipartisan legislation to mandate 40 hours of paid sick leave for workers in businesses with at least 10 employees. The legislation preempts localities from passing their own ordinances. The bill now advances to the governor’s desk for her expected signature.

Nevada – The senate unanimously approved paid leave legislation mandating businesses with 50 or more employees earn .01923 hours of paid leave for every hour worked – equivalent to five days a year of leave for an employee working 40 hrs/wk. Many business groups testified in favor of this compromised version of the legislation because it exempted small businesses. The Nevada Restaurant Association is “neutral” on the legislation, which now will be considered by the state assembly.

New Hampshire – The legislature continues to iron out details of competing paid leave plans. While different in some aspects, both plans would be funded by a payroll tax. The governor has repeatedly promised to veto any such proposal, equating it to an “income tax.”

Labor Policy

White House – The White House unveiled its immigration proposal this week which was intended to put a marker down on the issue. In short, it outlines a plan to move toward a merit-based immigration system. The proposal immediately faced criticism from both sides of the aisle. Noticeably absent was any mention of E-Verify. At this juncture, it appears unlikely to generate momentum toward bipartisan reform.

U.S. Senate – A bipartisan bill was introduced in the U.S. Senate that would change the definition under the Affordable Care Act of a full-time employee from 30hrs/wk back to 40hrs/wk.

Labor Department – The Labor Department extended the comment period for its proposed joint employer rule to June 25.

NLRB – The National Labor Relations Board (NLRB) General Counsel stated in a memorandum this week that Uber drivers are independent contractors under the National Labor Relations Act, following a similar opinion letter from the Labor Department.

NLRB – The National Labor Relations Board (NLRB) General Counsel is arguing in a pending case before the Board that it should take steps to narrow protected activities under the National Labor Relations Act. If the Board agrees, the decision could have far-reaching impacts for labor organizing efforts.

Alabama – The house passed equal pay legislation intended to combat gender and race discrimination in the workplace. The bill clarifies what factors (seniority, merit, etc.) employers can use to justify paying employees different rates. The legislation now heads to the senate for consideration.

Colorado – The governor signed a bill that would make denial or underpayment of more than $2,000 in wages a felony offense. Paying less than minimum wage will be a misdemeanor under the new law.

Massachusetts – For the third legislative session in a row, the senate has approved a wage theft bill that is languishing in the house. This week a house committee heard the legislation that has earned 114 cosponsors out of the 200 members of the lower chamber. It’s unclear if, or when, the legislation will make it the house floor.

Washington – Following ongoing enforcement actions by the attorney general on this issue, the governor signed into law new legislation that severely limits the use of non-compete clauses. Specifically, a franchisor may no longer restrict a franchisee from hiring an employee of another franchisee. The law goes into effect Jan. 1, 2020.

Data Privacy

California – Legislation that would have allowed private citizens to sue companies over violations of the California Consumer Privacy Act failed to advance in a senate committee. The bill was a priority of the attorney general as well as privacy advocates who view private rights of action as a key component to data privacy enforcement. Its defeat is a huge victory for business groups who opposed the bill.

Miscellaneous

Alabama – Legislation that would radically alter most franchisor/franchisee relationships in Alabama overwhelmingly passed the senate in a roll call vote. It now heads to the house and could potentially be on the governor’s desk by next week. The Alabama Restaurant & Hospitality Alliance has “no position” on the bill.

Key Takeaways

  • The Chinese are likely to respond to the President’s new round of tariffs with additional tariffs on American agricultural products, causing price disruption in the food supply chain. Brands need to stay on top of this situation to be as predictive as possible of food costs for the next few quarters. Additionally, with news coverage intensifying on the situation, brands should be prepared for questions from the media about specifics impacts of the tariffs on its prices, food supply, etc.

 

  • A survey of nearly 800 companies released this week by executive search firm Korn Ferry indicates that 93 percent of American employers have conducted a pay equity analysis of their companies and over three-quarters of them have taken some level of corrective action. In light of the recent EE0-1 directives, if leading restaurant companies have not conducted these analyses, not only will they be outside of the corporate mainstream, they may be in a precarious legal position.

Legislature Status for Week of 5/20/19

  • The United States Senate is in session this week
  • The United States House is in session this week
  • Twenty-four state legislatures are in regular session:
    • AL, AK, AZ, CA, CT, IL, LA, ME, MA, MI, MN, NE, NV, NH, NJ, NY, NC, OH, OK, OR, PA, RI, TX, VT

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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