Regulatory Wrap-Up: State and national policy
Wages
California: A state overtime pay bill that matches the salary threshold of the Obama administration’s overtime regulation at $47,476 passed the Assembly and now heads to the Senate. The federal regulation is currently on hold due to a court injunction and Labor Secretary Acosta is expected to rescind the rule. New York recently instituted an overtime rate at a similar level.
Illinois: In order to prevent a gubernatorial veto, supporters in the legislature have placed a parliamentary hold on the $15/hr minimum wage bill that passed the legislature by a slim partisan margin. Since a veto override is unlikely, legislators hope to negotiate with Governor Rauner who has indicated support for a lower increase but voiced opposition to a $15/hr wage.
Massachusetts: Labor interests continue to ramp up pressure on lawmakers to act on three priority issues: a $15/hr wage rate, paid family leave and a “millionaires tax.” They have stated their intent to place all three issues on the ballot in 2018 if the legislature fails to act. The paid leave proposals under debate differ widely, offering anywhere from 12 to 26 weeks of leave. Some versions of the legislation establish a trust funded by both employers and employees to compensate workers for partial wages during leave periods.
Rhode Island: The House passed a bill to increase the state minimum wage to $10.50/hr by January 2019, up from the current $9.60/hr. The bill now goes to the Senate. If passed, the governor will likely support it.
Paid Leave
IvankaLeave: Trump advisor and daughter, Ivanka Trump, met with key congressional members last week to discuss proposals on paid and family leave. Some Republican senators have embraced the idea of paid family leave, voicing support for a proposal to give tax credits to companies that offer at least two weeks of paid leave.
New Jersey: The Assembly passed a bill to expand paid family leave from six to 12 weeks and it now moves to the Senate. The program is funded by employee payroll contributions. Should the bill move through the Senate, the governor is likely to veto the expansion.
Scheduling
Federal Scheduling Bill: Rep. Rosa DeLauro (D-CT) and Sen. Elizabeth Warren (D-MA) announced their reintroduction of legislation that would require employers to provide workers' schedules two weeks in advance. The bill would impose a financial penalty for last-minute changes. This or any other federal scheduling bill is unlikely to move forward.
Oregon: The Senate passed a compromise scheduling bill last week with bipartisan support. The legislation is a result of intense negotiations over the past year. The bill now moves to the House for consideration. The Senate version would take effect July 2018 and applies to retail, hospitality and food service employers that are part of a “chain” and employ at least 500 employees worldwide. Primary components of the legislation include: seven days advanced notice for the first three years and 14 days beginning by 2020 with one hour of penalty pay for changes; a rest period of at least 10 hours between employee shifts; employers may use a “voluntary standby list” to address unanticipated customer needs or unexpected employee absences without penalty pay; and a permanent, statewide preemption of all local government scheduling mandates. The law will be enforced by the state labor department with a narrow private right of action for retaliation.
San Francisco: Labor advocates recently published a report that highlights the challenges with enforcing the city's first-in-the-nation scheduling law. The report calls out the lack of awareness among employees of the law's provisions as the most glaring shortcoming. Operators should anticipate increased awareness of the law's mandate provisions, particularly around penalty pay and fines for non-compliance.
Labor Policy
NLRB Nomination: President Trump officially nominated Marvin Kaplan for a seat on the National Labor Relations Board. Kaplan is currently counsel at the independent Occupational Safety and Health Review Commission. If he earns Senate confirmation, Kaplan would be the second Republican on the five- member panel. The current chairman is also a Republican and there is an open fifth seat that is expected to be filled shortly by the administration.
Activism
La Raza: The National Council of La Raza, the country's largest Hispanic advocacy group, announced their public support for a $12 minimum wage by 2020, paid family leave and federal protections against wage theft.
Food Sovereignty
Maine: Governor Paul LePage signed the Act to Recognize Local Control Regarding Food Systems, legitimizing the authority of towns and communities to enact ordinances regulating local food distribution free from state regulatory control. The first-of-its-kind law will allow for the sale of raw and prepared foods independent of any licensing or governmental oversight.
Health Care
U.S. Senate: Senate Republican leadership introduced the Better Care Reconciliation Act of 2017 which is their version of a bill designed to repeal and replace portions of Obamacare, and a response to the House’s American Health Care Act of 2017 which passed in early May. The Senate bill would maintain current Medicaid funding levels until 2020 then begin to phase down for three years. The bill zeroes out the employer and individual mandate tax penalties, and retains the House’s new employer reporting system. The bill does not address the 30-hour work week nor the IRS reporting requirements. Despite President Trump’s statement of support, at least five conservative Senators have said they cannot support the bill in its current form.
Immigration
DHS: The Department of Homeland Security announced it would make more visas available for seasonal workers. By law, the number of H-2B visas is capped at 66,000, which was exhausted in March. The visas, which are for temporary nonagricultural jobs, are used in tourism and other industries.
Taxes
Maine: The legislature overrode the governor’s veto of an economic nexus bill. It requires out-of-state sellers to collect sales taxes from in-state purchasers if the seller has more than $100,000 in annual revenue or more than 200 discrete sales into the state. This legislation is modeled after South Dakota’s landmark legislation from 2016, working its way through the courts to determine its constitutionality.
Minnesota: At the close of session, the governor signed into law legislation expanding the sales tax nexus rules to require collection of the tax if an out-of-state retailer utilizes an in-state marketplace provider or affiliate. The language was part of a larger package that made several changes to the state tax code.
North Carolina: A bill that requires out-of-state sellers to collect sales tax from in-state purchasers if the seller has more than $100,000 in annual revenue or more than 200 discrete sales into the state passed the Senate and heads to the House. There is limited time left in the session so chances for final passage and enactment are uncertain.
Oregon: The governor, house speaker and senate president jointly announced the end of negotiations to create a gross receipts tax this legislative session, following a failed 2016 ballot initiative.
Data Privacy
New Jersey: A bill restricting the collection and use of personal information by retail establishments passed both chambers. Specifically, the legislation allows for the scanning of a driver's license for certain purposes, but restricts the information that can be stored, the manner in which it is stored and prohibits the resale of the data. Since the bill was negotiated with business stakeholder input, the governor is likely to support it.
Transportation & Logistics
LA/LB Ports: The ports of Long Beach and Los Angeles announced they will release the draft Clean Air Action Plan (CAAP) 2017 Update July 19 with final approval slated for November. This will be the second update to the landmark 2006 CAAP, intended to reduce pollution from the ships, trucks, trains, cargo-handling equipment and harbor craft that operate in and around the ports.
Trucker Protests: Short-haul truck drivers, warehouse workers and local Teamsters initiated a strike at the LA/LB ports last week to protest several logistics companies featured in a recent USA Today article, alleging employee abuses. The strike also follows the mayors from Los Angeles and Long Beach calling for a zero-emissions goal for the sister ports. The strikers claim that emissions reduction policies result in abusive driver employment schemes relying on contract work or leased equipment. The port authority announced they do not expect work at the ports to be impeded by the strike.
Energy
North Carolina: Compromise legislation establishing competitive bids for utility-scale solar projects passed the House. The bill heads to the Senate and, if passed, would restart the Duke Energy Green Source Rider program, which will earmark 600 megawatts of renewable energy as well as allow retailers to lease solar rooftop panels that allow for up to one megawatt of usage.
Key Takeaways
The Oregon scheduling bill voted out by the Senate is expected to become law. While employers likely prefer to have no scheduling mandate at all, this version may represent the best achievable outcome in a jurisdiction like Oregon. Immediately this legislation will become the “50 yard line” of the issue, and other jurisdictions looking for a middle ground approach may adopt the Oregon model. Recognizing this fact, companies should look for ways to internally adopt the Oregon approach as it may become the standard.
California is considering whether to follow New York’s path to raise the overtime salary threshold to match the federal rule enacted by the Obama Administration. As the Trump Administration and Republicans in Congress strike down or reverse federal policies, expect states to react with their own mandates on issues ranging from climate change to healthcare.
The results of the special congressional election in Georgia will have a significant impact on the mood in Congress as tough issues like healthcare and tax reform are addressed. While many Republicans will feel emboldened, their pollsters may privately worry that they lost 10 percentage points in only seven months since last November’s contest in a solidly Republican district. Coupled with significant upticks in Democratic performance in special elections in Montana and Kansas as well as the Virginia primaries, some Republicans in moderate states and districts may be reluctant to embrace pieces of the Republican healthcare plans.
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