News

Regulatory Wrap-Up: A $15/hour wage increase approved for 2018 ballot in Massachusetts

BY CSA STAFF

Wages

Massachusetts: A joint committee held a hearing on a bill that would increase the minimum wage by $1/hr. each year until it reaches $15/hr. in 2021. The bill would also phase out the tip credit over an eight year period. The legislature may feel more pressure to act now that a $15/hr. wage increase has been approved for the 2018 ballot.

St. Paul, MN: Local advocates are seeking to follow Minneapolis and are ramping up efforts in support of a local $15/hr. minimum wage proposal. The bill has yet to come before the seven member city council. Unlike their close neighbor Minneapolis, St. Paul officials have yet to voice public support for a wage increase.


Paid Leave

Rhode Island: A paid leave bill passed both the house and senate. It mandates that companies with more than 18 employees provide three days of sick leave starting next year, four days in 2019 and five days from 2020 onward. One hour of paid leave is accrued for every 35 hours worked under the new requirement. The governor is likely to sign the bill into law.

Minneapolis, MN: The Minnesota Court of Appeals upheld the lower court’s ruling in favor of the city’s paid sick leave mandate. The business coalition in an effort to overturn the city law will seek an appeal to the state supreme court. Other cities, such as Duluth that are considering similar ordinances, are watching the proceedings closely.


Wage Theft

TGI Friday’s: TGI Friday’s settled a wage theft class action lawsuit for $19 million this week. The settlement, which covers 28,000 restaurant workers, is a record amount for resolution of a wage theft lawsuit in the restaurant industry.


Pay Equity

California: 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 passed the legislature and awaits the governor’s signature.


Labor Policy

CEO Pay: Recent reports indicate that senior officials within the Securities and Exchange Commission (SEC) confirmed that the SEC CEO pay ratio rule will not be rescinded and that publicly traded companies should plan to comply with the existing rule. These reports conflict with comments earlier this year from the SEC Chairman who expressed opposition to the rule. The rule, passed in 2015 with an effective date of Jan. 2018, requires public companies to compare the compensation of their chief executive officer to the median compensation of their other employees.

E-Verify: A federal proposal to mandate that employers use the E-Verify system to confirm the legal status of new employees was introduced this week. In the past several years business groups, such as the U.S. Chamber of Commerce who once opposed the federal mandate, now support a law that would preempt the various iterations of state E-Verify laws and provide a safe harbor provision for employers. Despite that support, it is unclear if the measure will attract enough votes to become law.

EEOC: A U.S. Senate committee held a hearing on two of President Trump’s nominees for the Equal Employment Opportunity Commission, the agency that enforces workplace discrimination laws. Former corporate general counsel, Janet Dhillon has been nominated to chair the committee and Iraqi war veteran Lt. Col Daniel Gade has been nominated for one of the open commission seats.

Wisconsin: The state appeals court agreed with a federal appeals court decision which upheld the state’s right-to-work law.

West Virginia: The state supreme court overturned a lower court’s injunction of the state's 2016 right-to-work law. In addition to other issues, the higher court cited the delay in a final decision from the lower court judge. Opponents vowed to continue the case and exhaust all legal options to overturn the law.

Washington D.C.: As the city council reconvenes after their summer break, Chair Phil Mendelson, who sets the council’s agenda, proposed a moratorium on “bills that would negatively affect businesses” through the end of 2018. In recent years the city passed a $15/hr. minimum wage, a paid sick leave requirement, a parental leave law and has considered a scheduling mandate modeled after San Francisco’s law.


NLRB

NLRB: President Trump announced the nomination of management-side attorney Peter Robb to serve as the next general counsel for the National Labor Relations Board. The NLRB General Counsel determines which cases come before the board for a vote. Meanwhile, the senate is expected to vote next week to confirm Bill Emanuel who President Trump nominated for the fifth open seat on the board. Once Emmanuel is confirmed, as expected, Republicans will enjoy a 3-2 majority vote on the board for the first time in a decade. It is expected that several labor-friendly decisions such as joint employer liability and micro union organization will be rolled back.


Health Care

U.S. Senate: Several Republican senators have reinvigorated an effort to repeal the Affordable Care Act. The proposal, authored by Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA), seeks to replace much of Obamacare with block grants for states. Further details remain undisclosed and a cost analysis has yet to be released. A Sept. 30 deadline for the U.S. Senate to pass a repeal with a simple majority vote is increasing the pressure for action; however, Senator John McCain (R-AZ) announced his opposition to the bill late last week, joining a number of other Republicans and dealing a blow to the legislation that requires 51 votes in the Senate to pass. Leader McConnell announced they would vote on the bill this week, but if Republicans lack a majority, they are not likely to take it up.


Trade

NAFTA: The Trump administration officially notified Congress of potential changes to NAFTA proposals. This procedural step starts a 180-day clock. After that period, the President can sign a new agreement, but it will still require final, Congressional approval. The notice comes as the three country talks continue in Canada this week for the third of seven expected rounds of negotiations. Reports indicate that little progress has been made on any of the controversial issues and the US is expected to insert a 5-year sunset proposal which could further complicate the negotiations.

KORUS: South Korea and the United States agreed to hold a second round of talks over the bilateral free trade agreement known as KORUS.


Immigration

California: Legislation establishing California as a sanctuary state passed both chambers and is awaiting signature by the Governor. Among other provisions, the law limits communication between state and local law enforcement and federal officials regarding the immigration status of undocumented residents. It would also prevent law enforcement from questioning and holding people on immigration violations. While the direct impact on restaurant and retail operators is minimal, the political stance of the 8th largest economy in the world, which is in direct contrast to the federal government, is notable.

California: A bill that prevents companies from allowing federal immigration agents on private property without a judicial warrant reached the governor’s desk. It would also require employers to notify workers of ICE enforcement activity within 72 hours of receiving notice of the inspection.


Soda Taxes

San Francisco, CA: A first-of-its-kind labeling mandate was blocked by the 9th Circuit Federal Appeals Court this week. It required soda advertisers to devote 20% of their display ads to include a warning that states this drink “contributes to obesity, diabetes and tooth decay.” The court found that the city could not compel advertisers to convey warnings on their products unless they were “clearly factual” as is the case with tobacco product’s linkage to cancer.

St. Helens, OR: City staff has proposed a 1 to 2 cent per ounce excise tax on sugar-sweetened beverages, like soda, as a revenue-generating idea. The local chamber for the Portland suburb has come out against the proposed excise tax.

Multnomah County, OR: Advocates are beginning to collect signatures to put a soda tax on the May 2018 ballot. The soda tax initiative seeks to add a 1.5 cents per ounce, or about 18 cents to the cost of a 12 ounce can of soda, energy drink or sweet tea. Canvassers are seeking 18,000 signatures from residents in the county, which includes the city of Portland in order to place the tax on the ballot.


Privacy

California: The Broadband Privacy Act that was pending in the state legislature failed to move forward before the close of session last week. The bill would have forced internet service providers to obtain permission from users prior to the collection of personal information. The bill is dead for this year but could resurface in 2018. Supporters are also working to place the California Consumer Privacy Act of 2018 on the ballot. The initiative would allow a customer to request what personal information a business has collected, how the business is using the information and direct businesses to not use that information.

Key Takeaways

TGI Friday’s record-setting $19 million dollar wage theft settlement puts the restaurant industry, and to some extent the larger entry level employment community, squarely in the crosshairs of regulators, attorneys general and the plaintiffs’ bar. Expect copycat class action lawsuits to emerge, targeting other companies. Activist regulators and attorneys general will also be encouraged to target brands in an effort to garner headlines.

The Washington D.C. Council Chairman’s announcement of a moratorium on employment and workplace policies indicates the local dialogue has shifted from a political conversation to an economic one, which is an important development. Even in one of the more progressive city councils in the country, policymakers understand that the combined impact of steep increases in multiple mandates – paid sick leave, parental leave, minimum wage – in a short time period may be too much for local businesses to bear. For employers in activist jurisdictions, this should illuminate a path forward.

Legislature Status for Week of 9/18/17

The United States Senate is in session this week

The United States House is in session this week

Ten state legislatures are currently in annual session

o IL, MA, MI, NJ, NC, NY, OH, PA, RI, WI

Podcast

We've recently launched a podcast that focuses on politics and policy for the restaurant industry. You can listen to the "Working Lunch" podcast by clicking here or subscribe on iTunes here.


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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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DESIGN/CONSTRUCTION

Williams Sonoma to open specialty concept in New York

BY Marianne Wilson

Williams Sonoma is expanding its new dedicated home furnishings store format.

The retailer will open its second standalone Williams Sonoma Home location on Sept. 28, in the Chelsea neighborhood of New York City. The 5,300-sq.-ft. store will feature a full suite of home furnishings and décor offerings targeted for city living. It also will feature the retailer's complimentary Design Crew interior design services experts, who specialize in helping shoppers find the right products and services for a variety of needs at home, across all eight Williams-Sonoma brands.

Launched in 2004. Williams Sonoma Home has been marketed primarily through its online channel and a monthly direct mail catalog. But within the past 18 months, more than 40 existing Williams Sonoma stores have added the Home assortment. In April, the first Williams Sonoma Home standalone store opened, in Calabasas, California.

The New York City Home store will feature the most extensive assortment of rugs, draperies and lighting out of the entire fleet of stores, the retailer said. It will also include furniture pieces ideal for high-end small space living, such as smaller scale furniture and a sleeper sofa. It will located next to the Williams Sonoma Kitchen store.

“We’ve had our kitchen store in Chelsea for years and when the opportunity arose to have the two concepts side-by-side, we couldn’t pass it up," said Janet Hayes, president of Williams Sonoma and Williams Sonoma Home. "Now customers can shop for every room in their home, right in one place.”

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ECOMMERCE

The busiest online shopping day in history will be…

BY Marianne Wilson

Black Friday is still No. 1 when it comes to setting sales records.

Black Friday, which falls on Nov. 24 this year, will be the busiest digital shopping day in U.S. history, exceeding Cyber Monday (Nov. 27) for the second year in a row, according to a report by Salesforce.

Mobile traffic to retail sites will grow to 60% of total across the globe this shopping season (compared to 34% for desktop and 5% for tablets). Orders placed on phones will approach 40% on big shopping days such as Black Friday, according to Salesforce's 2017 Holiday Season Predictions report.

Consumers will only have 50% of their holiday shopping completed by Sunday, Dec. 3 and 80% completed by Friday, Dec. 15. Cyber Week (Thanksgiving to Cyber Monday) will see both the deepest discounts (average of 28% off list price) and highest rate of free shipping (86% of all orders will have it). Beyond Cyber Week, Monday, Dec. 11 will have the deepest discounts and highest availability of free shipping.

In other insights from the Salesforce report:

o The most popular online shopping time for website visits and orders is from 8 p.m. to 10 p.m.

o Seven to 10% of all iPhone orders will go through Apple Pay.

o The most used channels for research before buying online include website (74%), email (43 %), social media (38%) and a retailer's mobile apps (36%).

o Voice-enabled digital assistants such as Amazon Alexa, Apple Siri and Google Assistant will be used by 40% of Millennials (ages 18-36) to research merchandise before buying online.

o Fifty-eight percent of consumers think that store associates need the ability to look up product details on-demand on a mobile device in order to help deliver an excellent customer experience.

o Over a third of Millennials (35%) say the ability to search merchandise in a physical store or online catalog using an image and receiving product recommendations based on the attributes of that image would be appealing.

o Millennials are also 2.5 times more likely (28% vs. 11%) than Baby Boomers (ages 53-71) to say personalized digital offers from retailers based on their purchasing history would appeal to them.

o Despite a desire for more personalized experiences, 63% of consumers feel like retailers don't truly know who they are.

o In addition, 61% believe that in order to help deliver an excellent customer experience, store associates need visibility into all available inventory at other stores or warehouses if an item is out of stock.

"Just like watching television, holiday shopping has moved from an appointment based activity to an on-demand activity," said Rob Garf, VP industry insights, Salesforce Commerce Cloud. "Salesforce expects to see continued growth not only in mobile orders and website visits, but also in newer technologies such as mobile payments and artificial intelligence. It's not too late for retailers to make adjustments today in order to meet consumer expectations and better compete this holiday season."

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