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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Quikrete Industry Dashboard

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The latest tally of major industry metrics shows favorable conditions on the consumer watch, despite downward trending graphs of starts, single-family starts and existing home sales. The roundup of hardware and building supply stocks tracked by HBSDealer shows TSCO well ahead of the field on a monthly and yearly basis.

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Regulatory Wrap-Up
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Regulatory Wrap-Up

BY HBSDealer Staff

Wages

Federal – As Democrats continue to press for minimum wage increases on the campaign trail, Larry Kudlow, Director of the National Economic Council, reiterated the administration’s position against any increase to the federal minimum wage.

New Jersey – Several legislators introduced a bill in the general assembly to raise the state’s minimum wage to $15/hr by 2023 with no exemptions. Other legislation has been introduced that would eliminate the state’s tip credit. Negotiations continue between the administration and legislative leadership. The governor prefers no exemptions and the senate president has discussed the need for specific provisions regarding farm workers and youth.

Miami Beach, FL – The state attorney general, along with several business groups, filed briefs with the state supreme court arguing that a lower court ruling should be upheld. The ruling in question found that Miami Beach’s 2016 ordinance raising the minimum wage above the state minimum violates state law. The court has yet to schedule oral arguments in the case.

Washington, DC – Supporters of Initiative 77 announced their intent to hold a referendum in response to the city council’s decision to repeal the measure. The voter-approved initiative would have eliminated the city’s tipped wage but the city council chose to repeal it. If successful, the backer’s referendum would place the issue on a future ballot for a second vote. Supporters must collect 25,000 valid signatures before the mandatory 30-day congressional review period concludes. That time frame could be several months as the review period is thirty Congressional calendar days and Congress is in recess until after midterm elections.

Paid Leave

Ford – The automaker expanded its paid leave policy for salaried employees. The company is now offering up to eight weeks of paid leave for the birth or adoption of a child with an additional 16 weeks of paid disability for birth mothers.

Scheduling

Philadelphia, PA – A city council committee passed the proposed fair workweek scheduling bill with a 6-2 vote. The language was amended from a 14-day period to 10 days for advanced notice of schedule changes. Employers will be subject to penalty pay for any changes within that 10-day window. The full council is expected to vote on the bill Nov. 29 and additional amendments could be considered.

Wage Theft

Chicago, IL – The city council unanimously approved legislation creating a local Office of Labor Standards. The new agency will be tasked with enforcing the city’s labor laws including wage and paid leave violations.

Labor Policy

NLRB – The National Labor Relations Board extended the public comment period for the proposed joint employer rulemaking for an additional 30 days to Dec. 13.

Google – On Nov. 1., Google employees from around the world participated in an organized walkout in objection to the company’s handling of several recent high-profile sexual harassment cases. The organizers released a list of demands and intend to organize more walkouts if management does not respond in a meaningful way, addressing what they view as issues related to the company’s culture.

McDonald’s – The company announced a new benefit for their workers. The campaign, “Where You Want To Be,” connects interested employees with mentors that have expertise in varying fields of work. The company announced that the new benefit is an extension of existing career and education-related benefits, including tuition assistance and reimbursement.

Taxes

San Francisco, CA – The city’s most vocal members of the business community (largely tech leaders) are publicly split on a ballot initiative that would tax large businesses to raise revenue for homeless services. The Mayor also opposes the tax, citing the impact it could have on job growth in the area. The measure resembles a Seattle “head tax” designed to address homelessness (dubbed the Amazon tax). It drew national attention before the city quickly scuttled it under pressure from the united business community. Voters will have the final say on Election Day and other jurisdictions are likely to take cues from the outcome.

Key Takeaways

  • With Election Day closing in, the president returned the media’s focus to a comfortable subject for him – the immigration issue. Last week he announced that he intends to challenge birthright citizenship through executive action and send troops to the U.S./Mexico border. Those announcements dominated cable news television coverage and political conversation for days, demonstrating that he will continue to use his bully pulpit to touch back to the immigration issue to fire up his base. Employers need to be cognizant of this dynamic because they may find themselves demonized as part of this conversation in the future.
  • The walkout by Google workers last week further demonstrates the increasing power of employee activism and brands, regardless of the industry, are realizing that employees are a volatile political constituency, much like their consumers and elected representatives. Google has been forced to take significant action as a result of pressure from their workers, not public opinion or political leaders. All employers need to understand this emerging dynamic.
  • Early voting numbers indicate this could be the highest turnout midterm election in decades. Historically, that has been good news for Democrats but many pundits are tempering their prognostications this cycle. There is however little doubt that Democrats will make gains at the federal and state level because Republicans, particularly at the state level, are at a “high water mark.” Expect Democrats to make significant gains in a number of states – including states with large restaurant footprints – shifting the political dynamics.

Legislature Status for Week of 11/5/18

  • The United States Senate is on recess this week
  • The United States House is on recess this week
  • Three state legislatures are meeting actively this week:
    • MA, MI, & NJ

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 Aligncan provide your brand with the counsel and insight you need to navigate the policy and political issues impacting retail.

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