Regulatory Wrap-Up
Market Insights

Regulatory Wrap-Up

BY HBSDealer Staff

Wages

Federal – As Democrats prepare to takeover the U.S. House, Representative Bobby Scott (D-VA,) who is expected to lead the Education and the Workforce Committee, announced that raising the federal minimum wage to $15/hr will be the committee’s top priority.

Arkansas – Voters approved a statewide minimum wage increase to $11/hr by Jan. 2021. Under the new law the minimum wage will increase from the current $8.50/hr to $9.25/hr in Jan. 2019 and the final increase to $11/hr two years later. Voters overwhelmingly supported the increase by more than a 2-to-1 margin.

Missouri – Voters approved a statewide minimum wage increase to $12/hr by 2023. The new law requires the minimum wage to increase from the current $7.85/hr to $8.60/hr in Jan. 2019 followed by annual increases to $10.30/hr in 2021, $11.15/hr in 2022 and $12.00/hr in 2023. The minimum wage would increase or decrease thereafter dependent on changes in the Consumer Price Index (CPI). Voters overwhelmingly supported the increase with over 62% in support.

Flagstaff, AZ – Local voters rejected a business-backed ballot initiative that would have brought the city’s scheduled minimum wage increases in line with the state requirement. As a result of the measure failing, the city’s minimum wage will continue to increase to $15.50/hr by 2022.

St. Paul, MN – The city council held another hearing on the proposed ordinance to increase the minimum wage to $15/hr with various phase-ins dependent on the size of the business. The tip credit issue continued to be a central theme during testimony and the local beverage association has indicated there may be enough support on the council to include some language addressing the issue. The specifics of the language regarding tipping are unclear at this point as is the level of support on the council. The council is expected to advance a bill to the Mayor’s desk before the end of the year.

Paid Leave

Michigan – Supporters of the state’s paid leave law, which was removed from the ballot due to legislative action on the issue earlier this year, are renewing their calls for the legislature to make no changes to the existing law during the post-election lame duck session. Although the legislature will remain in Republican control in 2019, the election of a Democratic governor likely prevents the law from being adjusted in the next legislative cycle.

Labor Policy

Labor Department – The U.S. Department of Labor rescinded its prior guidance that made the tip credit unavailable to tipped employees who spend more than 20% of their time performing allegedly non-tip generating duties. The so-called “80/20” rule has been the subject of litigation for years, including a recent suit brought by the National Restaurant Association.NLRB – Instead of rewriting the so-called “ambush election” rule all at once, the NLRB will release a series of proposed rules starting in the next few months to revise specific aspects of the union election process.

Google – The tech company announced that it would ban mandatory arbitration of employee sexual harassment claims. The announcement follows thousands of Google employees walking off their jobs at locations around the world in objection to the policy.

Hotel Industry – The UNITE Here labor union criticized the hotel industry’s “5-Star Promise” program to fight sexual harassment in the hotel and lodging industry. In August, the American Hotel and Lodging Association along with top brands announced the formation of the program to increase worker safety across the country. The union critique notes the non-mandatory nature of the program.

Health Care

Labor Department – The U.S. Chamber of Commerce and the Society for Human Resource Management (SHRM) announced their support for the DOL’s effort to fight a lawsuit challenging the agency’s association health plan rule.

Taxes

Multistate Tax Commission – The MTC, an intergovernmental state tax agency, released a set of guidelines and definitions that will serve as models for state laws classifying online marketplace facilitators. Multiple states are expected to enact legislation that extends the state’s sales tax collection authority to online marketplaces. The multistate action comes in the wake of the South Dakota v. Wayfair Supreme Court decision that enhanced states’ ability to collect sales taxes from its residents when they shop online.

Jersey City, NJ – The city council held the first public hearing for a proposed 1 percent payroll tax for employees who don’t live in the city to fund education programs and schools in the city. City residents would be exempt. The council voted to proceed and may hold a final vote as early as Nov. 20.

Washington D.C. – The city council continues to advance legislation that would mandate online retailers with no physical presence in the city begin collecting and remitting sales taxes on sales made to District residents beginning Jan. 1, 2019.

Key Takeaways

  • With seven new Democratic governors, seven new state chambers under Democratic control and four new Democratic attorneys general, the state playing field looks very different than it did a week ago. In states like Colorado, Illinois, Maine, New Mexico and Nevada, where Democrats now control all levers of state government, we can expect significant legislation on wages, leave and benefits. Additionally, now having a majority of state attorneys general, look for some Democratic AGs, particularly those in Minnesota, New York, Illinois, Michigan and Washington to aggressively engage corporate brands over wage and hour enforcement, sexual harassment policies and a host of other issues.
  • In Congress, we can expect the further formalization of partisan gridlock. Democrats are expected to pursue investigations over the President’s taxes, Russia, the firing of James Comey/Jeff Sessions and numerous other issues. While progress on policies important to employers may be stymied, brands need to take advantage of opportunities to make progress at the regulatory level, especially at the Department of Labor.
  • Democratic control of the House will bring a very bright light and loud microphone to the priorities of the labor community – namely a $15 minimum wage, national paid leave and gender equity. These policies will receive a level of national attention not seen for a very long time. Of all the labor issues, paid family leave may end up garnering the most federal attention since several Republican proposals have recently emerged for the first time. Numerous corporate brands are likely to be highlighted in that process and probably not in a favorable light.

Legislature Status for Week of 11/12/18

  • The United States Senate is in session this week
  • The United States House is in session this week
  • Four state legislatures are meeting actively this week:
    • GA, MA, PA, & OH

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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