Regulatory Wrap-Up: Weekly recap of retail-related judicial and legislative developments

8/13/2018
Wages

California - A federal judge certified a class action lawsuit that alleges the retailer H&M didn’t pay workers for time spent in security checks after clocking out. The certification follows the recent state Supreme Court ruling that Starbucks Corp. must pay workers for off-the-clock work at closing.

New York City, NY - The city council voted to impose a cap on new ride-sharing licenses for one year and to establish the nation's first minimum pay rate for app-based drivers. The legislation directs the Taxi and Limousine Commission to “establish a method for determining the minimum payment that must be made to a driver.” The mayor is expected to sign the legislation into law.

Sunnyvale, CA - Some city council members have indicated their support for freezing the scheduled increases in the city’s minimum wage ordinance to bring them in line with the current timetable for statewide increases. The city’s minimum wage ordinance passed in 2015 and increases the rate to $15/hr by 2019, ahead of the statewide schedule of 2022. The city council will meet on Sept. 11 to consider the issue.

Paid Leave

Dallas, TX - The Working Texans for Paid Sick Leave coalition is lobbying the city council to place a paid leave proposal on the Nov. ballot because their signature gathering effort fell short. It remains unclear how many members of the city council favor putting the measure on the ballot.

San Antonio, TX - The city council held a public hearing this week on a proposed ballot initiative to institute a citywide paid leave program. The council is considering enacting an ordinance to replace the proposed initiative and may vote on the issue later this month.

Labor Policy

Federal - The Justice Department announced a formalized partnership with the Labor Department to “expand collaborations” to discourage employers from hiring temporary visa workers over “qualified U.S. workers.”

Federal - Immigration and Customs Enforcement (ICE) conducted several raids of businesses in Nebraska and Minnesota for employing and mistreating illegal immigrants. The operation raided over a dozen businesses and indicted seventeen business owners and managers for fraud, money laundering and other crimes.

Missouri - Voters repealed an existing right to work law by a 2-1 margin. The law was passed during the 2017 session and allowed workers to opt out of union dues payments. Missouri allows residents to call for a ballot measure on new legislation by collecting signatures from at least 5 percent of voters (over 100,000) from six of the state’s eight congressional districts.

Study - A study from the conservative American Action Forum finds that growth in the hotel industry slowed following in the National Labor Relations Board’s 2015 joint employer decision. The decision classified some businesses as jointly liable for the labor practices of franchisees and contractors. Specifically the study found that the annual franchise employment rate fell by 1.4% and growth in total wage earnings declined by 3.9%. The researchers acknowledge that data from one year (2016) may not be conclusive enough to determine a long term trend.

Taxes

Arkansas - The Little Rock city council passed a resolution that requests the governor convene a special session to consider legislation to capture sales taxes from out-of-state sellers in the wake of the recent Supreme Court decision in South Dakota v. Wayfair. The governor’s office indicated there were no plans to convene a special session and action will likely wait until early 2019.

California - The governor’s office released draft legislation that would force out-of-state retailers with sales over $500,000/yr to collect and remit the state’s sales tax. The bill also mandates that marketplace providers collect and remit sales taxes on third-party sales made through their platform. The legislature may consider the bill when they return to session from an August recess.

Michigan - The Department of the Treasury released an administrative bulletin establishing certain thresholds for out-of-state sellers to begin collecting and remitting the state’s sales tax. The department indicated that sellers with over $100,000 or over 200 transactions per year must begin collecting on Sept. 30, 2018.

Washington - The Department of Revenue released a notice establishing a threshold of $100,000 or 200 transactions for out-of-state sellers who must begin collecting the state’s sales taxes on Oct. 1, 2019.

San Francisco, CA - A measure has been approved for the Nov. ballot that would leverage a 0.5 percent gross receipts tax on companies that make more than $50 million in revenue annually. The revenue is designated for housing and homeless services, similar to the “head tax” that Seattle considered and ultimately rejected earlier this year. The city’s Office of Economic Workforce Development released a report noting that passage of the new tax could negatively and disproportionately impact employees in mid-level jobs such as retail, grocery and restaurants as many of those industries could potentially cut jobs as a result.

Trade

China - The Trump Administration announced 25 percent tariffs on an additional $16 billion worth of products imported from China. The new round will go into effect on Aug. 23 and when combined with the $34 billion already in effect as of July 6, the total amount of products subject to new tariffs amounts to $50 billion.

Data Privacy

California - A coalition of various business interests submitted a 20-page letter detailing technical corrections to the landmark data privacy law that was signed in late June and goes into effect Jan. 2020. The precedent-setting law allows consumers to learn what personal information about them is held by businesses and to opt out of the sale of that information. The legislature is expected to take up a technical corrections bill in the fall.

Key Takeaways

  • This week, the Chicago Tribune published an editorial strongly criticizing the scheduling proposal currently under consideration by the city council. The rebuke was comprehensive enough that it should be incorporated into all industry messaging on this issue going forward. Essentially, it called into question the fallacy of trying to legislate predictability in an increasingly unpredictable world. If leveraged properly, it could be an important inflection point in the ongoing dialogue over predictive scheduling.

  • The H&M case in California is significant because the wage and hour practices of another major brand (last week it was Starbucks Corp.) are being called into question and leveraged to create new law in that space. Companies have to take into consideration the aggressive approach California is taking with regard to wage and hour compliance and their willingness to creatively redefine “unpaid” wages.

  • New York City’s new rules around ridesharing are precedent-setting and while the action does not have a direct effect on traditional entry-level employers, the growing delivery sector could easily come into play. Other policies the city has considered, from banning electric bikes to potentially prohibiting deliveries during rush hour, are all responses to the growing congestion and transportation issues in dense urban centers.  Companies need to pay attention as other major urban centers may follow suit.


Legislature Status for Week of 8/13/18

  • The United States Senate is in session this week

  • The United States House is in recess this week

  • Three state legislatures are meeting actively this week:

    • CA, MA & MI




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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