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

BY HBSDealer Staff

Wages

Arkansas – The secretary of state’s office approved language for the Nov. ballot that would increase the state’s minimum wage to $11/hr by 2021.

Michigan – A decision is likely today on whether the proposed Michigan minimum wage initiative will proceed to the Nov. ballot. Depending on the outcome of the decision by the three-judge panel currently deciding the issue, an appeal by the business community could be forthcoming.

Paid Leave

Austin, TX – A state appeals court blocked enforcement of the city’s paid sick leave law that was set to go into effect on Oct. 1. The legal challenge to the city’s law will continue to move through the courts. Until the court rules on the matter or lifts the injunction, businesses will not have to comply.

San Antonio, TX – The city council passed a paid sick leave ordinance by a 9-2 vote. The council exercised its option to pass a law instead of allowing the issue to move to the ballot in Nov. The new law, modeled off an ordinance in Austin, requires that employers with more than 15 workers provide eight days of paid sick time per year. The law goes into effect in Jan., but compliance does not start until Aug. 2019. By that time the state may have already enacted a preemption on localities enacting paid leave laws.

Pay Equity

California – A senate-passed bill that would require employers with more than 100 workers in the state to submit employee pay data along with race, ethnicity and gender specifications to the state on an annual basis, failed to pass the house appropriations committee by an Aug. 16 deadline.

Wage Theft

Minnesota – A McDonald’s franchisee has agreed to pay over $20,000 in back wages as a result of non-compliance with Minnesota’s new minimum wage law. In addition to the payments, the restaurant’s employees will participate in a training with the city’s civil rights staff.

Labor Policy

NLRB – SEIU activists along with U.S. Senator Elizabeth Warren are calling on two Republican members of National Labor Relations Board (John Ring and William Emanuel) to recuse themselves from considering a pending settlement in the closely-followed McDonald’s joint employer case. They allege that Ring and Emanuel’s previous work at law firms that represented companies targeted by Fight for $15 constitutes a conflict of interest.

Massachusetts – The governor signed into law new rules governing non-compete agreements. The new law limits non-compete agreements to one year in duration and requires employers to pay the employee half of their salary during the timeframe covered.

New Jersey – The governor issued an executive order to create a task force to investigate the potential misclassifications of workers by employers. The task force will examine current agency enforcement, initiate a review of existing law and make recommendations to the governor on future actions. The renewed focus will likely increase current employer audits from the state labor department examining employee tax forms and independent contractor agreements.

Mobile, AL – Workers at a Mobile, AL Coca-Cola distribution company have been on strike since Aug. 9. The core issues are a proposed significant reduction in starting pay and an effort to ask employees to contribute more to their healthcare costs.

Transportation

FederalLanguage preempting states’ meal and rest break laws for truckers is included in the pending Federal Aviation Administration authorization bill before the senate. Similar language passed the house earlier this year and if enacted, it would standardize rules across the country.

Taxes

South Carolina – The Department of Revenue released draft advisory opinions establishing certain thresholds for out-of-state sellers to begin collecting and remitting the state’s sales tax. The draft indicates that sellers with over $250,000 in sales per year must begin collecting on Oct. 1, 2018.  The advisory opinion also states that online marketplace providers with sales over the same amount must collect sales taxes on all third-party sales on their platform. The drafts are open for public comment until Aug. 27.

Soda Taxes

California – Following the surprise passage earlier this year of a law banning localities from enacting taxes on groceries including sugary beverages, labor interests had been pushing legislation that would require warning labels to be placed on sodas. The bill failed to pass the senate appropriations committee by an Aug. 16 deadline.

Boulder, CO – The city council voted to include a referendum on the Nov. ballot that will determine what the city will do with excess revenue collected from the $0.02/oz tax on sugar-sweetened beverages that was approved in 2016. Colorado law requires voters to approve whether the city keeps the additional money or returns it to the voters. The city estimated it would collect $3.8 million/yr from consumers but ultimately realized $5.2 million in revenue.

Menu Labeling

California – The Office of Environmental Health Hazard Assessment held a public hearing on a proposed rule to exempt coffee from state labeling requirements. Earlier this year, a Los Angeles judge determined that because coffee contains chemicals linked to cancer, coffee sellers should be required to adhere to the state law and post signage alerting consumers of the linkage. The rule would eliminate that burden.

Key Takeaways

  • With Democratic prospects in the fall looking much more promising the last few weeks, Republican members of Congress may increase the pressure on their leadership to allow some type of compromise immigration legislation to be voted upon. Companies may have an opportunity to re-engage their political allies into this conversation.
  • The nomination of Keith Ellison as the Democratic nominee for attorney general in Minnesota is important. As a member of Congress, Ellison has been an outspoken advocate for the labor community and although he ultimately lost, he was labor’s preferred candidate to head the Democratic National Committee. There is not much that a single member of the minority party can do in Congress to pursue their agenda. However, as an attorney general with significant subpoena power, he can make life very difficult for a lot of companies – especially entry-level employers. If elected, he would fill the current void of activist attorneys general once filled by Eliot Spitzer (NY), Kamala Harris (CA) and Eric Schneiderman (NY). Companies need to pay close attention to this race.

Legislature Status for Week of 8/20/18

  • 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 & 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 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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