Regulatory Wrap-Up

3/13/2019
Wages

Federal – The Labor Department officially released its new proposed overtime rule which would increase the salary threshold for overtime eligibility to $35,308/yr with no automatic future adjustments. The current threshold is $23,660/yr following a failed Obama-era effort to raise it to $47,476/yr.

Federal – The House Committee on Education and Labor advanced a bill that would establish a federal minimum wage of $15/hr. The bill now goes to the house floor.

Arkansas – A bill to roll back the 2018 voter-approved minimum wage increase had stalled but was amended to establish a lower wage for youth workers, felons and people with disabilities. It remains unclear if there’s an appetite among legislative leadership to further consider the legislation.

Maryland – Multiple minimum wage bills continue to make their way through the legislative process. A senate committee advanced a bill that would require business with at least 15 employees to pay $11/hr with incremental increases to $15/hr by 2025. Smaller businesses would have a more gradual phase-in period. A different bill that passed the house last week establishes a $15/hr minimum by 2025 regardless of the size of a business and preserves the tip credit. The committee-passed bill now moves to the full senate but would need to be reconciled with the house version in order to reach the governor’s desk.

Missouri – Democratic senators successfully held off an effort by some Republicans to move legislation to water down a voter-passed initiative to raise the state’s minimum wage to $12/hr by 2023.

New Hampshire – A senate committee heard testimony in support of a bill to increase the state’s minimum wage to $12/hr by 2022. The state’s current minimum wage matches the federal level of $7.25/hr.

New Mexico – A senate committee advanced a bill to increase the minimum wage to $11/hr by 2022, ultimately increasing the server wage to $3.00/hr. The bill now moves to the senate floor and, if successful, would have to be reconciled with the house version before moving to the governor’s desk.

Oklahoma – As expected, the Republican-controlled senate killed several legislative attempts to increase the state’s minimum wage level.

Minneapolis, MN – A Minnesota state appeals court upheld the legality of a Minneapolis ordinance that raises the minimum wage to $15/hr, saying that the state’s wage law doesn’t block the city’s right to set its own salary floor.

Target – The national retail chain announced it was raising the entry-level wage for employees to $15/hr nationwide by 2020.

Wage Theft

PAID Program – After criticizing the Labor Department’s Payroll Audit Independent Determination (PAID Program) for some time, the New York Attorney General took official action suing the Trump Administration for access to records related to the program. She and other state attorneys general view the compliance-focused federal self-reporting program as a “non-enforcement initiative” that gives amnesty to violators. She stated that she will take state-level enforcement actions against program participants.

Paid Leave

Colorado – Democrats introduced legislation to mandate 12 weeks of paid leave to care for a newborn, receive treatment for a major illness, leave a relationship marred by domestic abuse or help a family member who is sick or dying. Similar to the unemployment insurance program, the state would administer the program and employees and employers would contribute equally toward it. All full – and part-time workers and businesses of any size would have to participate.

New Hampshire – The house labor committee advanced a senate-approved bill mandating 12 weeks of paid leave for employees for the birth, adoption or fostering of a child. The provisions also allow for the care of certain relatives with serious illness and would be funded by a 0.5 percent tax on employee wages. If it passes the full house, the governor has indicated he will veto it.

Oregon – A hearing will be held March 27 on a bill mandating 12 weeks of paid leave per year for the birth of a child or the caring of a family member suffering from a serious health condition. The bill would have employers and employees split the cost 50-50 to pay for the program, with employee contributions maxed out at 0.5 percent of their wages.

Texas – A senate committee advanced a bill that would preempt localities from passing their own paid leave mandates as well as nullify existing ones. The bill is in response to cities like Austin and San Antonio that passed their own measures last year.

Scheduling

New York – The state labor department announced that it will abandon the “fair workweek” regulations it has been workshopping over the past two years. The regulations were expected to require employers to post schedules with 14-day advanced notice and require penalty pay if changes were made within that period. Although the regulations have been abandoned, a legislative path still remains as Democrats now control both chambers of the state legislature and the governor’s office, which was not the case for the last two years.

Labor Policy

EEOC – A defunct Obama-era Equal Employment Opportunity Commission (EEOC) requirement that employers provide detailed pay data broken down by gender, race and ethnicity was revived this week by the courts. Under that requirement, companies with more than 100 employees must report detailed demographic data corresponding with “pay bans” on the annual EEO-1 Form. The additional disclosures were intended to bring transparency to compensation and in doing so, advance pay equity. The Trump Administration attempted to freeze the rule that would require companies to report by May 31 of this year. Many expect the administration to challenge this recent court ruling reinstating the rule.

Rhode Island – In advance of International Women’s Day, lawmakers announced a Women’s Economic Justice Platform. The platform is essentially a bundle of bills whose centerpiece is a pay equity bill modeled off of the Massachusetts law. It would expand the requirements under the law for equal pay for “comparable work” (versus equal work), make it easier to bring lawsuits against employers and ban salary history questions among other provisions.

Taxes

Nebraska – The legislature passed a bill establishing that marketplace providers must collect sales taxes on sales made by third-party vendors on their site. The bill also includes language to mandate out-of-state sellers with more than $100,000 in sales or over 200 transactions per year must collect and remit the state’s sales tax on sales to in-state customers.

New Jersey – In his budget proposal, Governor Murphy signaled his intention to extend the current marginal tax rate for incomes above $5 million to all income in excess of $1 million which would generate an estimated $447 million. He has also given his support to a proposed fee of $150 per employee for employers that have 50 or more employees receiving state Medicaid benefits, potentially generating an estimated $30 million.

Washington – A bill clarifying that out-of-state sellers with more than $100,000 in sales into the state must collect the sales tax passed both chambers and is headed to the governor for an expected signature. The state already has a law on the books mandating that marketplace providers collect and remit sales taxes for third-party sales on their websites.

Key Takeaways

  • Regardless of whether or not the EEO-1 requirement stands (there’s a good chance that it won’t), pay equity is an issue that isn’t going away. And, while the EEO-1 form is a fatally- flawed approach to address the issue, the next Democratic administration is likely to pick it right back up in some form. At the state level, expect activist West Coast and Northeastern states to explore similar approaches in the coming years. This is an issue with which we’re going to have to wrestle in some form or another. That’s why a number of notable consumer-facing brands have voluntarily performed internal audits and taken corrective action over the past year. Brands need to be preparing accordingly.

  • A growing number of localities – most notably Philadelphia – are passing regulations prohibiting businesses from going “cashless”. Embedded in this debate are issues of income inequality and race and brands that are considering going in this direction need to fully understand the public ramifications of doing so.  


Legislature Status for Week of 3/11/19

  • The United States Senate is in session this week

  • The United States House is in session  this week

  • Forty-six state legislatures are in regular session:

    • AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK,OR, PA, RI, SC, SD, TN, TX, UT, VT, WA, WV




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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