Regulatory Wrap-Up
Market Insights

Regulatory Wrap-Up

BY HBSDealer Staff

Wages 

Federal – The U.S. House approved legislation to increase the federal minimum wage to $15/hr by 2025. It would eliminate the tip credit and includes an automatic cost-of-living increase after 2025. Even though this outcome has been anticipated since the midterm elections, it is a significant milestone in the years-long Fight for $15 movement. The bill has almost no chance for passage in the U.S. Senate and Majority Leader McConnell has publicly stated he will not bring the bill up for a vote.

Connecticut – The general assembly is expected to reconvene to override a gubernatorial veto of a restaurant industry priority. The legislation, which was approved with little opposition, brought the state’s rules related to the so-called 80/20 tipping rule into alignment with the new federal standard.

Michigan – The state supreme court heard arguments last week as to whether or not the watered-down minimum wage and paid leave mandates will stand. At issue, two union-backed ballot initiatives were likely to qualify for the fall ballot. The legislature took action to adopt both initiatives to avoid them reaching the ballot. And in the process, it significantly amended both initiatives to make them more business-friendly.

Paid Leave

Pennsylvania – After years of working its way through the legal process, the state supreme court found that a Pittsburgh paid leave mandate, originally passed in 2015, was constitutional, overruling lower courts’ decisions on the matter. It is unclear at this time when the new effective date will be established.

Texas – New paid leave mandates are set to go into effect Aug. 1 in San Antonio and Dallas. A similar law passed in Austin has been delayed in the courts and has yet to go into effect. Businesses in San Antonio announced that they will sue to halt the rule there and a judge will hear their arguments this week.

Scheduling

Chicago, IL – The proposed scheduling ordinance is slated for consideration this week. As currently written, the vast majority of restaurants in the city have been exempted, leaving mostly larger multi-unit national chains subject to the ordinance. The Chicago Tribune published an editorial this week opposing the ordinance.

Labor Policy

EEOC – The Equal Employment Opportunity Commission (EEOC) began collecting EEO-1 pay data from an estimated 60,000 employers last week. The data is broken down by race, ethnicity and gender and covers years 2017 and 2018. Businesses must submit data by Sept. 30.

Labor Department – Following Secretary Acosta’s resignation, Patrick Pizzella became the acting secretary. President Trump announced that he will nominate Eugene Scalia, son of late Justice Antonin Scalia, to be the next Labor Secretary.

Minnesota – The governor signed one of the most sweeping wage theft laws in the country. The legislation earned bipartisan support and criminalizes wage theft among other provisions.

New Jersey – The governor released a report on employee misclassification in the state. This follows a promise “to intensify efforts to curtail the widespread and illegal practice of misclassifying workers as independent contractors instead of employees.” The report recommends a number of action items to ramp up enforcement.

St. Paul, MN – City council members introduced legislation this week that would create a new bureaucratic division to more vigorously enforce the city’s new minimum wage and leave laws. This is part of a growing trend of cities with employment-related mandates. One concern is that once established, the jurisdiction of these boards can be expanded to adjudicate other labor issues.

Labor Activism

Little Big Burger – Union organizers are crying foul over the recent termination of employees that supported unionization. The accusations come as workers are voting by mail on whether or not to officially form the Little Big Burger Union. Results are scheduled to be certified this week.

McDonald’s – Last week Democratic presidential candidates Julian Castro and Kirsten Gillibrand participated in a Fight for $15 protest at an Iowa McDonald’s location. They join a long list of presidential candidates that have joined picket lines over the past few months.

Packaging

California – The governor recently signed a law making it easier for restaurants to allow reusable takeout cups and containers brought in by guests, part of an ongoing effort to reduce dependence on single-use plastics. As part of the law, restaurants must isolate the consumer-owned container from the serving surface or sanitize the surface after each filling. Restaurants must also have a written policy for prevention of cross-contamination available for inspectors.

Taxes

OhioThe governor signed into law a requirement that online marketplace providers collect sales taxes on sales made by third-party vendors on their site. The bill was part of the state budget process.

Key Takeaways

  • House passage of legislation to raise the federal minimum wage is more than symbolic. While it is clear at this time that similar legislation will not pass the U.S. Senate and the federal wage law is most likely to remain unchanged, passage in the house represents a high water mark for the Fight for $15 movement and the broader labor community. This will add momentum to both their activism and their push for union representation for entry-level industries. Additionally, from a political aspect, this achieves the goal of squarely putting the Democratic party and its slate of presidential contenders on the side of $15/hr and marking a clear line of distinction with Republicans who almost universally oppose the measure. While that was already the de facto situation, Democratic leaders have now achieved the broad contrast with Republicans on this issue that they wanted all along.

 

  • The independent contractor issue in New Jersey deserves attention. The governor’s task force report cited David Weil’s arguments – a critic of the franchise business model and Obama Administration Labor Department official – in the first three sentences of the report. New Jersey’s efforts parallel conversations in California and fit into a much larger debate that captures all business-to-business relationships, including the franchise business model.

Legislature Status for Week of 7/22/19

  • The United States Senate is in session this week
  • The United States House is in session this week
  • Five state legislatures are in regular session:
    • CT, KY, MA, MI, NC

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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