Regulatory Wrap-Up
Market Insights

Regulatory Wrap-Up

Weekly recap of retail-related regulations and legislation.

BY HBSDealer Staff

Wages

Nevada – Legislation to increase the minimum wage to $12/hr (or $11.00/hr if an employer offers health insurance) by 2024 passed out of an assembly committee. The governor continues to be supportive of an increase.

New Hampshire – The senate is considering house-passed legislation to raise the minimum wage to $12/hr by 2022. If the senate were to ultimately pass the bill, it is highly likely the governor will veto it.

Vermont – House and senate leadership appear to have broken a stalemate and struck a deal on the issues of minimum wage and paid leave. Under the compromise, the house would approve a $12.25/hr minimum wage. The senate would approve a paid leave bill that includes voluntary personal injury insurance. It’s still possible that governor will veto both bills, even though they’ve been scaled back. And, it’s unlikely that either bill will have enough support in both chambers for an override vote.

Emeryville, CA – Citing the impact on restaurants and other small businesses, the city council has voted to “pause” further increases in the minimum wage. The local minimum wage was scheduled to increase to $16.30/hr effective July 1.

Sonoma, CA – Unlike Emeryville, the Sonoma city council voted to accelerate their already pending minimum wage increase to $13.50/hr for large businesses and $12.50/hr for small businesses on Jan. 1 of 2020 with incremental increases eventually bumping the Sonoma wage to $17/hr and $16/hr, respectively by Jan. 1 of 2023.

Paid Leave

Connecticut – The senate passed legislation to allow for up to twelve weeks of paid leave. The governor, although a staunch supporter of paid leave, has threatened to veto the bill because he is opposed to the bureaucratic framework for administering the plan. Only two weeks remain in the legislative session to reach a compromise.

Maine – Legislation that would mandate 40 hours of paid sick leave for workers in businesses with at least 10 employees and also preempting localities from passing their own ordinances is still on the governor’s desk but expected to be signed soon.

Nevada – A house committee heard but took no action on senate-approved legislation that would mandate businesses with 50 or more employees provide employees .01923 hours of paid leave for every hour worked – equivalent to five days a year of leave for an employee working 40 hrs/wk. The Nevada Restaurant Association is “neutral” on the legislation, which now will be considered by the state assembly.

Texas – A preemption bill that would prevent localities from enacting paid leave mandates appears dead for the year. The bill would have inadvertently voided existing, local LGBT workplace protections approved by some communities. Exempting those protections split supporters of the preemption bill into two feuding camps, killing the bill. Currently, courts have ruled that local paid leave mandates are unlawful; however, the state supreme court is likely to make the final determination on whether or not those mandates will go into effect.

Vermont – As noted above, house and senate leadership appear to have broken a stalemate and struck a deal on the issues of minimum wage and paid leave. Under the compromise, the house would approve a $12.25/hr minimum wage. The senate would approve a paid leave bill that includes voluntary personal injury insurance. It’s still possible that governor will veto both bills, even though they’ve been scaled back. And, it’s unlikely that either bill will have enough support in both chambers for an override vote.

New York City, NY – A New York City Council committee next week will hear a bill that would require companies with five or more employees to grant up to 80 hours a year of paid vacation or personal time. The bill appears to have broad support.

Sweetgreen – The restaurant chain is now offering employees five months of paid parental leave. The benefit extends to “mothers, fathers, adoptive parents, foster parents and others with new additions to their families.”

Labor Policy

NLRB – The National Labor Relations Board (NLRB) unveiled its spring 2019 regulatory agenda. Of particular note, the NLRB will issue by September a proposed rule to establish standards for union access to an employer’s private property. The rule could dramatically impact union organizing and picketing activities.

Overtime – Attorneys general in 15 states are considering challenging the Trump Administration’s recently-proposed overtime rule and have urged the Labor Department to pull back the current proposal and instead fight to save the Obama-era overtime regulation. A court battle could stall the administration’s plan to have the rule in place before the end of President Trump’s first term in office.

Equal Pay – Presidential hopeful Senator Kamala Harris released “the most aggressive equal pay proposal in history” this week. The sweeping plan would fine corporations that don’t address their pay disparities and put the revenues toward funding universal paid family and medical leave.

No-Poach – Despite a Justice Department statement defending no-poach agreements in employment contracts, Jimmy John’s LLC and two of its franchisees must still defend against an antitrust class action lawsuit related to the no-poach clause included in the chain’s employment agreements.

Alabama

Colorado – The governor signed into law a far-reaching equal pay measure. The new law allows employees who believe they are being paid less due to their gender to file a lawsuit within two years. Employers found liable must pay the amount the employee would have made the previous three years if there had not been discrimination.

Connecticut – A sexual harassment bill passed the senate and now heads to the house for consideration. Among other provisions, it would require all workplaces with three or more employees to provide sexual harassment instruction to every worker. Currently, employers with 50 or more workers must provide this training to workers in supervisory roles.

McDonald’s – The SEIU’s Fight for $15 campaign earned headlines this week by attacking McDonald’s USA in advance of its shareholder meeting. The union, for the third time, filed a number of sexual harassment complaints. The twenty-five complaints were filed with the EEOC and argue that the franchisor and various franchisees are jointly liable. The union also opened a new front in its corporate campaign by filing a collection of OSHA claims related to workplace violence. At least four presidential candidates participated in SEIU actions and protests in advance of the meeting.

Key Takeaways

  • As predicted, Democratic presidential candidates brought their road shows to the doorsteps of leading brands to protest industry business models. This week, numerous Democratic hopefuls joined Fight for $15 protesters outside the McDonald’s shareholders meeting in an effort to curry favor with the labor community. Brands would be wise to view this as an industry issue and not a “McDonald’s issue” and prepare accordingly.

 

  • Brands need to pay close attention to the “no-match” issue currently playing out with the Social Security Administration. As the Trump Administration gears up its 2020 reelection effort, immigration enforcement – much of it focused on employers – will be a centerpiece of his campaign. Brands need to quickly assess their exposure and their remediation strategies to stay out of the fray.

 

  • Brands should watch the Massachusetts U.S. Senate Democratic primary. Incumbent U.S. Senator Ed Markey (a stalwart champion of the labor community) is facing a challenge from the left in labor attorney Shannon Liss-Riordan. Many corporate general counsels are likely to recognize her name from lawsuits that have landed on their desks. If she were to win, it would be another sign of a shifting Democratic base and she would quickly become one of the fiercest critics of entry- level employers in U.S. Senate.

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.

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