Regulatory Wrap-Up
Market Insights

Regulatory Wrap-Up

BY HBSDealer Staff

Wages

Colorado – The governor signed legislation that eliminates the state preemption on local minimum wage laws. Due to an industry-backed amendment, localities must honor the existing state tip credit of $3.02/hr. Additionally, any local increase in excess of the state wage would be delayed until 2021.

Connecticut – The governor signed legislation to raise the state minimum wage to $15/hr. 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 servers will remain at $6.38/hr, the wage for bartenders will go to $8.23/hr and a 90-day training wage at 85% of the minimum wage will be established for workers that are 16 and 17 years of age.

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 the house and now moves to the senate. The governor continues to be supportive of an increase.

New Hampshire – The senate voted to delay action on legislation to raise the minimum wage until next year. While a bill is still alive in the house, it appears the issue is dead for the year.

Vermont – The senate adjourned for the year before taking action on legislation to raise the minimum wage to $15/hr. Both the house and the senate had legislation and appeared to be nearing a compromise when the senate decided to defer the issue to next year.

Chicago, IL – The mayor has announced her intention to raise the minimum wage in the city to $15/hr by 2021, four years ahead of the statewide mandate to $15/hr by 2025.

Paid Leave

California  – The assembly overwhelmingly approved legislation to expand the state’s existing paid leave program. If enacted, workers would receive 100% of their full wages, up from the current 60-70%. Workers will continue to be eligible for six weeks of leave for the birth or adoption of a child.

Maine – The governor signed a law mandating companies with 10 or more employees offer one hour of earned paid time off for every 40 hours worked. Workers can earn up to 40 hours and use the leave at their discretion. The law also preempts municipalities from enacting their own mandates above the state rate.

Nevada – The assembly passed senate-approved legislation that mandates companies with 50 or more employees provide up to 40 hours of paid leave annually to be used for the employees own illness or to care for a family member. The bill now goes to the governor for his expected signature.

Vermont – The senate adjourned for the year before taking action on legislation to enact a robust paid family law that would have provided up to 24 weeks of paid leave for a newborn. As with minimum wage, action will be deferred to 2020.

JP Morgan – In a case with potential ramifications for all employers, the company reached a settlement in a class action case brought by a male employee arguing that a father can serve as primary caregiver and thus access a more generous company paid leave benefit. Because of the nature of the settlement, it could portend both an increase in these types of suits as well as more aggressive actions by the Equal Employment Opportunity Commission.

Healthcare

New York – A hearing was held on proposed legislation to create a single-payer health care program for the state. Similar legislation has languished for decades but with stronger Democratic majorities in both chambers, proponents are aggressively pursuing passage. The bill has no specific funding plan at this point and additional hearings are likely in the coming months.

Labor Policy

Immigration – Further evidence of an employer-focused immigration crackdown emerged this week. Ken Cuccinelli, an immigration hawk and the controversial former Virginia Attorney General, was named U.S. Citizenship and Immigration Services (USCIS) Director. It’s unclear if he’ll ultimately be confirmed by the U.S. Senate but regardless he’ll serve as Acting Director. And, all Trump golf courses have now enrolled in the federal voluntary E-Verify Program.

Joint Employer – In an opening of another front in the war on corporate brands who franchise, Sen. Catherine Cortez-Castro has questioned the Small Business Administration’s practice of guaranteeing loans tied to “franchises with a history of complaints about unfair and deceptive practices,” including Subway, as well as questioning what methods the agency had at its disposal in handling loan failures.

Joint Employer – Browning-Ferris is arguing that NLRB Member William Emanuel should be permitted to participate in a joint employer case on remand from the D.C. Circuit Court. The company is arguing that there is no direct conflict of interest. At issue, Emanuel’s former law firm represented Browning-Ferris.

Equal Pay – The Alabama House voted 99-0 to send equal pay legislation to the governor’s desk. If the governor signs the bill, Mississippi will be the only state in the country without an equal pay law.

Labor Department – The White House, frustrated by the slow pace of “deregulation,” is reportedly taking a more active role in oversight of the agency.

California – The assembly approved legislation that would enshrine the controversial Dynamex decision into law, potentially redefining a large segment of independent contractors as employees. The franchise community has also expressed concern over the potential impact to its business model.

Packaging

Maryland – The state became the second in the nation (Maine being the first) to enact a law banning polystyrene foam cups and containers. The legislation was passed earlier in the session and became law this week without the governor’s signature. The ban will go into effect July 1, 2020.

Taxes

Arizona – Legislation expanding sales tax collection obligations to online sellers passed both chambers and advanced to the governor’s desk for consideration. The bill establishes a minimum economic threshold of $100,000 in annual sales for all sellers and mandates that online marketplace providers collect sales taxes on sales made by third-party vendors on their site.

Kansas – Legislation forcing online marketplace providers to collect sales taxes on sales made by third-party vendors on their site was vetoed by the governor and an override effort was unsuccessful. The language was part of a larger tax package that Republican legislators and the Democratic governor continually failed to successfully negotiate.

Louisiana – Legislation expanding sales tax collection obligations to online sellers passed the house and now advances to the senate for consideration. The bill establishes a minimum economic threshold of $100,000 in annual sales for all sellers and mandates that online marketplace providers collect sales taxes on sales made by third-party vendors on their site.

Maryland – Legislation expanding sales tax collection obligations to online sellers was enacted without the governor’s signature. The law establishes a minimum economic threshold of $100,000 in annual sales for all sellers and mandates that online marketplace providers collect sales taxes on sales made by third-party vendors on their site.

TexasLegislation expanding sales tax collection obligations to online sellers was signed into law by the governor. The law mandates that online marketplace providers collect sales taxes on sales made by third-party vendors on their site.

Key Takeaways

  • The industry needs to take careful note of the latest effort by Rep. Alexandria Ocasio-Cortez to bring awareness to the minimum wage issue. On the evening of Friday, May 31, the congresswoman returned to her previous restaurant roots as a “celebrity bartender” at a restaurant in her New York City district to show solidarity with restaurant and service industry workers. The event was sponsored by longtime industry detractor, the Restaurant Opportunities Center (ROC). An alliance between ROC’s founder, Saru Jayaraman, and Ocasio-Cortez could give a significant boost to ROC’s effort to demonize the industry and use it as a political football in the labor community’s agenda. Brands need to play close attention to this budding partnership.

 

  • The appointment of former Virginia Attorney General Ken Cuccinelli as the head of U.S. Citizenship and Immigration Services is notable and potentially alarming for employers. Cuccinelli has a track record of policy positions and statements considered far outside the mainstream and he has been fond of roiling the status quo. In his new position, he will be head hunting for high-profile immigration stings and will target industries that have immigrants in their workforce, i.e. restaurants. Brands need to watch his activities closely.

Legislature Status for Week of 6/3/19

  • The United States Senate is in session this week
  • The United States House is in session this week
  • Nineteen state legislatures are in regular session:
    • AK, CA, CT, DE, LA, ME, MA, MI, NV, NH, NJ, NY, NC, OH, OR, PA, RI, VT, 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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