Regulatory Wrap-Up: Minimum wage and paid-leave ballot initiatives popping up



Massachusetts: SEIU-backed Raise Up Massachusetts has begun its long-promised effort to put a wage increase and paid leave proposal on the Nov. 2018 ballot following inaction during the 2017 legislative session. If passed, the rate would increase $1/yr to $15/hr by 2022 with future increases tied to an annual cost of living adjustment. The coalition must collect 64,750 signatures for the initiative by early Dec. 2017 and an additional 10,000 by June 2018. The attorney general’s office still has to approve the ballot language and the legislature could still take action in early 2018 on minimum wage, which could circumvent the ballot initiative process.

Michigan: The Restaurant Opportunities Center-backed Michigan One Fair Wage Committee filed a 2018 ballot initiative to increase the minimum wage to $12/hr by 2022 and also incrementally increase the minimum wage for tipped workers until they reach the full minimum wage by 2024. Pending approval by the Board of State Canvassers, the group will begin collecting signatures.

Cook County, IL: Municipalities continue opting out electing of the county-wide wage increase and paid leave laws that passed in Oct. 2016. To date, 107 (roughly 80%) of the 132 localities within the county have decided not to implement the ordinances.

Kansas City, MO: An initiative seeking to raise the city’s minimum wage to $15/hr by 2022 will appear on the Aug. 8 ballot. Should the measure pass, it will be in direct conflict with a state law barring municipalities from raising wages above the state’s $7.70/hr minimum. The city has not yet announced if it would challenge the state’s preemption law in court.

Montgomery County, MD: Following Councilmember Elrich’s introduction of another legislative effort to raise the minimum wage to $15/hr, a study commissioned by the county was released. It details the economic impacts of the proposed increase and found that the county would lose 47,000 jobs by 2022. County Executive Leggett commissioned the study when he vetoed a similar measure earlier this year. The council will hold a hearing Sept. 19 to review the findings.

Paid Leave

Massachusetts: As stated above, SEIU-backed Raise Up Massachusetts has begun its long-promised effort to put a wage increase and paid leave proposal on the Nov. 2018 ballot following inaction during the 2017 legislative session. The paid leave proposal would mandate 16 weeks of paid leave to care for a new child or ill family member and also includes up to 26 weeks for personal illness or injury. The leave program would be funded by employer contributions and businesses could require employees to pay up to half of the total cost of the program. The benefit would be capped at $1,000/wk. The coalition must collect 64,750 signatures for the initiative by early Dec. 2017 and an additional 10,000 by June 2018. The attorney general’s office still has to approve the ballot language and the legislature could still take action in early 2018 on the issue which could circumvent the ballot initiative process.

Michigan: The Michigan Time for Care coalition filed a 2018 ballot initiative that would mandate employers with more than 10 workers to provide one hour of paid leave for every 30 hours worked with a maximum of 72 hours of leave per year. Pending approval by the Board of State Canvassers, the organization will begin collecting signatures.

Albuquerque, NM: A state circuit judge ordered the removal of a paid leave ballot initiative that was supported by the business community from the Oct. 3 ballot. Supporters of the original paid leave initiative argued successfully that the competing language would confuse voters. The case is expected to be reviewed by higher courts prior to a final decision on what appears on the ballot.

Wage Theft

U.S. Congress: House and Senate Democratic leaders introduced the Wage Theft Prevention and Wage Recovery Act. The bill would create a $2,000 penalty for violations and a $10,000 for each subsequent violation. Penalties currently are capped at $1,100 per violation. The legislation will not pass in the Republican-controlled Congress but its introduction demonstrates growing momentum for the issue.

St. Petersburg, FL: The city council recently amended its wage theft ordinance which contains two new employer mandates. At the point of hire, an employer must provide written notice to the employee regarding rate of pay, overtime rate and other employee rights under the ordinance. Any changes during the employee’s tenure must also be delivered in writing and records must be kept for three years. Employers must also post a notice that summarizes those rights under the ordinance. Employers who violate this new poster requirement may be fined up to $500 per violation.

Pay Equity

Maine: The legislature failed to override the Governor’s veto of legislation that included provisions preventing employers from requesting salary history information during their hiring process.

New Jersey: Governor Christie vetoed legislation that would have prevented employers from requesting salary history from potential employees.

San Francisco, CA: Mayor Lee signed the Parity in Pay Ordinance into law following passage by the city council earlier this year. The law aims to close the wage gap between women and men, and applies to both private employers and city agencies. Effective July 1, 2018, employers are prohibited from asking job applicants about their salary history or from considering past salaries in determining what salary to offer and whether to hire the applicant.


MTC: The Multistate Tax Commission (MTC) announced a special voluntary disclosure program for online sellers, who could have sales tax collection liabilities as a result of storing inventory in fulfillment centers across the country. Participating retailers that sell into states joining the program would be forgiven for any historical sales tax compliance liability but would be required to collect taxes on future sales. The states that have agreed to participate in the program so far are: Alabama, Arkansas, Colorado, Connecticut, Kansas, Kentucky, Louisiana, Nebraska, New Jersey, Oklahoma, Texas, Utah and Vermont. The program will run from Aug. 17 through Oct. 17.

South Dakota: The state Supreme Court announced it will hear oral arguments Aug. 29 in South Dakota v. Wayfair Inc., one of two lawsuits challenging the state law that mandates sales tax collection from merchants with over $100,000 in sales (or 200 transactions) per year into the state. The first-in-the-nation law was signed by Gov. Dennis Daugaard (R) in March 2016 and went into effect on May 1, 2016. Should the Court find for the plaintiffs, the case may be reviewed by the U.S. Supreme Court during the 2018 session.

Rhode Island: Legislative leaders finally agreed to a state budget that was signed into law by the governor. The package included negotiated language establishing a physical nexus for sales tax collection purposes for out-of-state retailers. Previous iterations called for reporting requirements similar to Colorado’s 2010 law. The final language establishes physical presence for collection purposes as the usage of “in-state software” on the devices of “in-state consumers.”

Sugar Tax

Cook County, IL: Following the local judge’s dismissal of the lawsuit opposing implementation of the soda tax, the tax went into effect on Aug. 2. Merchants must begin collecting the penny-per-ounce tax on sugary drinks.

Labor Policy

Seattle, WA: A federal judge dismissed a lawsuit brought by the Chamber of Commerce seeking to block the landmark Seattle law which allows Uber and Lyft drivers to unionize. The law remains on hold as a similar case brought by individual drivers makes its way through the legal system.

NLRB: The full U.S. Senate confirmed Marvin Kaplan to one of the two open board seats at the National Labor Relations Board, bringing the organization one step closer to a Republican majority.

EEOC: President Trump nominated Daniel Gade to the last vacant slot on the Equal Employment Opportunity Commission. The President has also nominated Janet Dhillon as EEOC Chair and should both be confirmed, there will be a Republican majority on the EEOC.

Product Safety

CPSC: President Trump nominated Ann Marie Buerkle to be the next Commissioner of the Consumer Products Safety Commission. Buerkle has been serving as acting director of the organization for the last six months and is a former member of Congress from New York.


U.S. Senate: Senators Tom Cotton (R-AR) and David Purdue (R-GA) introduced a modified immigration reform bill that focuses on a merit-based system. The Reforming American Immigration for Strong Employment (RAISE) Act would cut the annual number of green cards granted for legal residence in half and would emphasize job skills over family ties for applicants. The White House has indicated strong support for the bill.


NAFTA: Countries participating in potential NAFTA renegotiations announced a second meeting in Mexico City in early Sept., following one already scheduled in Washington, DC in mid-Aug.

Steel: President Trump announced the delay of a decision that would potentially restrict imports of foreign steel as a matter of national security. Several of the president’s advisors have highlighted the risks of starting a trade war with China over the steel issue. The president also announced the delay of another issue that would impact the U.S.-China relationship; a potential investigation into the violation of U.S. intellectual property rights and forced technology transfer.


FedEx: The company announced this week that it would not charge extra delivery fees to most homes during the peak holiday season, countering rival UPS’s plans to add a surcharge to deliveries. The two carriers, collectively transport a significant percentage of consumer goods from various ecommerce platforms.

Key Takeaways

• The South Dakota economic nexus law is in direct contradiction with standing Supreme Court precedent regarding how retailers without a physical presence in a state trigger a sales tax collection obligation. Should the state’s Supreme Court rule in favor of the online retailers, the case could go to the U.S. Supreme Court as early as next year and has the potential to overturn the physical presence standard that has been in place for decades.

• 2018 minimum wage and paid leave ballot initiatives are beginning to pop up around the country. Leading up to the 2016 elections, the SEIU announced it would put measures on the ballot in every state that allowed it (over half); however, the SEIU fell far short of that goal, running initiatives in only a handful of states. At this juncture, there is no reason to suspect there will be a wave of initiatives in 2018. Hopefully that’s the case because these measures almost always pass and entry-level employers are portrayed negatively throughout the process.

• The immigration reform bill that was introduced this week nearly mirrors the message of union leaders in years past. They argue that immigrants are competing against Americans for jobs and driving down wages in the process. In this conversation, entry-level employers (“job magnets”) are at the center of the problem. Not only are the policy outcomes potentially bad for employers, but this conversation also has negative reputation implications.

Legislature Status for Week of 8/7/17

• The United States Senate is in recess until September 5, 2017

• The United States House of Representatives is in recess until September 5, 2017

• Ten state legislatures are currently in regular session

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

• One state legislature is in special session

o TX


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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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Fast-growing discount grocer expands analytics capabilities

BY Marianne Wilson

Aldi has extended its partnership with Nielsen to gain more shopper and advertising effectiveness insight.

Nielsen and Aldi announced an expanded multi-year relationship for integrated analytics data around shopper panel, custom retail analytics and advertising effectiveness. Under the agreement, Nielsen will be Aldi's preferred data and analytics provider, covering the chains' nearly 1,700 stores in 35 states across the U.S.

Nielsen will provide Aldi with a combination of analytics, including consumer-sourced panel data, custom retail analytics and advertising effectiveness. Nielsen’s combined consumer panel and advertising effectiveness analytics, the only integrated data set of this capacity available to the industry, brings forth a deeper view of shopper panel data and the role that advertising plays within it, a critical strategy in navigating today’s evolving grocery retail landscape.

“We are continually creating a better grocery store for our customers,” said Scott Patton, VP of corporate buying at Aldi. “We selected Nielsen for its differentiation of consumer and retail data in the marketplace, so we can continue to focus on doing what we do best – save people money on their grocery bills.”

Aldi operates almost 1,700 U.S. stores in 35 states. The company has said it plans to have 2,500 locations in the United States within the next five years.


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The Future of Bricks-and-Mortar in a Turbulent Retail Environment

Retail has reached a tipping point. Omnichannel shopping is no longer the “new thing” — it is THE THING. Demographics and technology have permanently altered consumer behavior, and retailers have felt the impact in an unprecedented manner.

In today’s environment, proactive management of the store portfolio is not an option—companies must actively pursue a forward-looking, dynamic, and data-centric approach to design the optimal store portfolio to ensure ongoing viability.

New Retail Reality

So far in 2017, RadioShack, Gander Mountain, Wet Seal, Hhgregg, MC Sports, Gymboree, Payless ShoeSource, and others have filed for bankruptcy, and more big names are expected to join. This does not necessarily mean the death of retail. Dig beneath the numbers, and a different narrative emerges.

Through the first five months of 2017, U.S. retail sales actually increased 4.0% over 20161. Consumer confidence remains high, and unemployment is at 4.4%2. Today’s shopper, while still on the lookout for value, has not gone into hibernation. Consumers are still shopping — they just do it in different ways.

While online shopping is trending upward — and certainly some retail segments, such as apparel and consumer electronics, feel the impact more than others — online sales still do not represent a majority of retail spending overall. The demand and need for physical stores still exists, and their role in an omnichannel world is critical.

Retailers must evolve and utilize current technology to become more efficient, particularly with regard to physical stores. Consumer demographics and preferences have evolved, forcing retail companies to face critical issues:

1. Sharp declines in physical store sales and customer traffic, with widening gaps between bricks-and-mortar and e-commerce sales and financial performance;

2. Lack of visibility into store-level performance, channel performance, sub-market demographics, efficacy of show-room designs, and the competitive impact of store locations;

3. An increased dependency on brick-and-mortar stores to support e-commerce customers, creating challenges balancing labor and inventory;

4. Minimal, ad hoc, or no process in place to review the portfolio and identify bottom and top performers to develop tailored strategies for each location; and

5. Lack of resources and expertise to operationalize strategic action plans.

Retailers recognize the importance of balancing bricks-and-mortar and e-commerce, but many have missed the mark in analyzing and implementing this balance, resulting in an unprecedented number of store closures and bankruptcies. Across all segments of retail, companies are dealing with issues that must be addressed before options run out and the only path left is reorganization.

Store Portfolio Optimization

Store portfolio optimization is a data-driven, analytical process that examines the current store portfolio of a company, then develops and implements a plan to optimize store performance. Proactive, predictive store portfolio planning allows companies to deal with the impacts of a rapidly changing retail environment, putting them ahead of competitors.

To get there, retailers must (1) understand the complex dynamics of their current store portfolio, (2) develop a detailed plan to achieve the optimal structure, and (3) implement a plan to optimize the portfolio.

The concept is simple, but retailers may find it difficult to decipher their own data. Also, the approach many companies take when optimizing their store base is too simplistic. They use an outdated model based on traditional retail in a new retail environment. In addition, many are slow to review their store portfolios, taking a reactive — not proactive — stance, thus limiting strategic options and resulting in inefficient use of capital.

An aggressive, analytical approach to store portfolio management drives value creation by using the right analytics, ongoing monitoring, and decisive action to keep stores competitive and profitable. This “dynamic approach” spurs action that leads to improved performance by enabling management teams to effectively manage exits, reframe store maintenance decisions, and anticipate investments in new stores.

The best-performing companies take advantage of a multitude of data inputs to understand the interconnected drivers of their success. Advanced analysis helps retailers unlock insights into their business in ways not possible only a few years ago. In today’s business environment, a rigorous, fact-based approach is required to manage all aspects of the enterprise. The time to make changes is now, before the “new retail train” leaves laggards.

The Call to Action for Retailers

In an article published late last year, we noted:

Retail survival demands creativity in tackling a shifting consumer mindset, advancing technologies, and competitive pressures that place new demands that did not exist 10 to 15 years ago… retail executives must show a willingness to do the ‘dirty work.’ They must engage in a process of continuous renewal that allows companies to restructure and revitalize — before it becomes a necessity3.

A large part of the creativity and “dirty work” involves strategic work on the store portfolio — an effort that demands investment in resources and time. Commitment to this effort can pay dividends by (1) providing critical information to decision makers, (2) improving brand and customer alignment, and (3) driving stronger bottom-line financial performance.

Investors, boards, and C-level executives need to examine their store portfolios with a new approach. Making decisions using outdated four-wall analysis is not enough. Unless retailers engage in the process of continuous self-renewal in store operations, marketing, supply chain, information technology, and other key drivers of retail success, they may find themselves added to the list of casualties.

The future of bricks-and-mortar stores is not as dire as many would have you believe. Retail is experiencing drastic change, certainly, but companies can (and must) adapt to the new paradigm. A proactive approach is needed. Store portfolio optimization is available for companies that want to analyze their business and ensure future viability.

1. US Census Bureau retail sales (excludes motor vehicles/parts, gasoline, food & dining).

2. US Bureau of Labor Statistics.

3. Bob Duffy, Keith Jelinek, and Steve Coulombe, “Retail Survival Requires Ongoing Restructuring, Revitalization,” Journal of Corporate Renewal (November/ December 2016).

Keith Jelinek is managing director of Berkley Research Group; Adam Malpocher and David Owens are directors of Berkeley Research Group, a leading global strategic advisory and expert consulting firm that provides independent advice, data analytics, authoritative studies, expert testimony, investigations, and regulatory and dispute consulting.


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