Regulatory Wrap-Up: Health care returns to the conversation

Wages

Bernalillo County, N.M.: The county council voted to increase the minimum wage to $8.85/hr to keep pace with inflation. The increase only applies to unincorporated areas of the county.

Montgomery County, Md.: The County Council Health and Human Services Committee voted 2-1 to accept County Executive Ike Leggett’s proposed changes to the $15/hr minimum wage proposal. The revised provisions extend the timeline for compliance for large business to 2022 and for small businesses to 2024 and the bill now defines small businesses as those with up to 50 employees. Some members of the Council expressed opposition to the delay and vowed to find the votes to change the timeline back to the 2020 and 2022 deadlines in previous versions.

South Bend, Ind: The common council introduced a bill, previously negotiated with the mayor’s office, that sets a minimum wage for businesses receiving property tax breaks to locate in the city. The ordinance mandates that employers who receive those tax breaks are subject to a minimum wage of $10.10/hr as opposed to the statewide rate $7.25/hr. An annual increase of 2% would also apply. The council is set to vote on the bill Oct. 23.

Wage Theft

California: A proposed class action lawsuit was filed in federal court against a group of restaurants, arguing they were involved in a price-fixing conspiracy. Allegations center on a 2014 announcement that the restaurants jointly agreed to eliminate tipping and increase prices by 20% in the pursuit of increased profits. The Bay Area restaurants named in the lawsuit have received considerable notoriety for their no-tipping practices.

Menards: The home improvement chain faces multiple lawsuits in differing jurisdictions alleging that the company violated wage laws by not paying employees for breaks and training sessions among other violations. The company is asking the courts to hold the lawsuit until the U.S. Supreme Court rules on a separate, pending case determining the legality of employer/employee arbitration agreements.

Paid Leave

California: Governor Brown signed a parental leave bill into law that would guarantee job security for employees who take time off to care for a new child. The bill applies to companies that employ between 20 and 49 workers, granting them 12 weeks of unpaid leave for the birth or adoption of a child. It also contains a mediation program before workers could sue employers for violations.

Austin, Texas: The city council unanimously passed a nonbinding resolution that directs the council to explore a potential citywide paid sick leave law. Stakeholders will debate the issue until a Feb. 2018 hearing when the council is expected to take up legislation.

Pay Equity

California: Governor Brown signed into law a bill that prohibits employers from asking applicants about their salary history and also requires employers to provide, upon request, a pay scale related to specific positions. The state is the fourth to pass similar legislation, joining Massachusetts, Oregon and Delaware.

Michigan: The senate passed a bill 27-9 that preempts localities from enacting laws which prohibit employers from requesting a prospective employee’s pay history during the hiring process.

California: A “wage shaming” bill, that would mandate companies with more than 500 employees to submit employee wage data broken down by gender every two years, awaits action by the governor. The data would be available to the public through a state database presenting potential employee and public relations challenges. The governor has until Oct. 15 to sign or veto the legislation and his intentions are unclear at this writing.

Taxes

Michigan: By a 31-5 vote, the Michigan Senate passed a bill preempting localities from enacting new taxes on food and drinks. The bill now heads back to the house where final passage is likely.

Soda Taxes

Cook County, Ill.: The county commission voted 15-2 to repeal the controversial countywide soda tax. The tax will officially end on Dec. 1 and will leave an expected $200 million hole in the county’s annual budget.

Health Care

ACA: President Trump signed an executive order that allows for insurance options to be offered that do not comply with standards established under the ACA. Included in these options are association health plans offered by groups of small employers and greater use of short term coverage. Following the signing of the executive order, the administration announced plans to suspend the federal subsidies paid to insurance companies participating in ACA exchanges designed to keep premiums lower. These two actions combined will dismantle key aspects of the current healthcare market.

Trade

NAFTA: During the fourth round of discussions over the renegotiation of the three-country trade deal, the U.S. came forward with several of their most controversial demands which many experts say could threaten the continuation of the agreement. In line with President Trump’s “America First” strategy, the U.S. proposed several potentially toxic demands around automobile sourcing, government procurement, and the inclusion of a sunset clause. Business groups such as the U.S. Chamber of Commerce, have signaled their opposition to the approach, fearing the death of the 20-year old trade agreement as a result.

Key Takeaways

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  The California “wage shaming” bill is specifically designed to create reputational problems for employers and companies will struggle to justify any employee wage gaps based on gender. If the Governor signs the bill into law, expect many Golden State employers to face intense criticism of their pay and promotion practices. Other jurisdictions may entertain adopting similar measures.


• 
  The executive order signed by the president yesterday may ultimately be more style than substance. In reality, it only asks a few agencies to take a harder look at their options with regard to changes to the ACA. The important thing that happened this week is the announcement by the Administration to suspend the subsidies the government pays to insurance companies to keep premiums manageable. Absent a true legislative fix, these administrative actions will upend much of the ACA insurance exchanges and significantly disrupt the market. Operators should expect significant reactions within the insurance market that may affect the cost of private plans they offer.


• 
  The progressive agenda has had a bad last few weeks. In three reliably left-of-center cities, various parts of the agenda received significant pushback. Albuquerque voters defeated a paid leave measure, Cook County repealed their soda tax, and Washington, DC is revisiting their landmark family leave law. Social idealism and economic reality are increasingly colliding in traditional blue cities and the progressive agenda is taking the brunt of the damage. Now is a good time for operators to underscore their narratives regarding job creation, workforce development and upward mobility.

Legislature Status for Week of 10/16/17

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  The United States Senate is in session this week.


• 
  The United States House is out of session this week.


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  The following state legislatures are in session year round: Illinois, Massachusetts, New Jersey, New York, Ohio, Pennsylvania and Wisconsin.


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  The following additional states are currently in session: Michigan, North Carolina and Rhode Island.


• 
  Oklahoma is in a special session convened on Sept. 25

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