CSA Regulatory Wrap-Up

Regulatory Watch: Insider’s guide to retail-related legislative developments – April 2

BY CSA Staff


Louisiana: Legislation to raise the minimum wage from the federally mandated $7.25/hr to $8.50/hr over two years died in the senate.

Maine: Legislation to scale back the scheduled increases in the voter-approved minimum wage law did not pass its first vote in the house. It will still be considered in the senate and could be amended to attract more votes. The proposal would reduce the 2018 wage from $10/hr to $9.50/hr and allow for increases to $11/hr by 2021 instead of the previously approved $12/hr. It would also eliminate the automatic cost-of-living increase and establish a training wage.

Redwood City, CA: The city council increased the minimum wage for all businesses in the city, outpacing the statewide phase-in schedule. The ordinance sets the wage at $13.50/hr for 2019, rising to $15/hr by 2020 with incremental cost-of-living increases thereafter. The state law phases in a $15/hr. wage by 2023.

Minneapolis, MN: University of Minnesota researchers have received a $3.5 million National Institutes of Health (NIH) grant to evaluate the impact that the Minneapolis $15/hr minimum wage ordinance could have on obesity rates for minimum wage employees. The study will compare the health of Minneapolis employees to minimum wage employees in Raleigh, North Carolina over five years. The cities are considered demographically similar. North Carolina law prohibits cities from raising the minimum wage above $7.25 whereas the Minneapolis minimum wage will incrementally rise in to $15/hr during the timeframe of the study.

Paid Leave

Hawaii: Two paid leave bills continue to make their way through the legislative process. One senate-passed bill requires the state labor department to establish a paid leave program for all workers by 2023. That bill has passed its second committee in the house. The other house-passed bill made it through its first committee in the senate and requires employers with fewer than 50 workers to provide paid sick leave. The bill exempts companies that offer leave policies at or above the proposed mandate. April 5 is the deadline for bills to be agreed to in their original chamber and be put to conference to iron out differences or fail for the session.

Maryland: Senate-passed legislation that would establish an income tax credit of up to $1,000 per employee for businesses with fewer than 25 employees was heard in its first house committee this week. The legislation is intended to provide relief for small businesses coping with the newly-enacted paid leave law.

New Jersey: The senate companion to the house-approved paid leave bill passed its first senate committee vote. The language mirrors what was agreed to by the business community because it contains several important components; It preempts local leave ordinances, allows for blackout dates as set by employers, has an exemption for seasonal workers, reduces the maximum hours of leave from 72 to 40 hours and contains a 180-day implementation delay once the bill is signed into law.


Gap, Inc. Study: A new pro-labor study by the Center for Worklife at the University of California in cooperation with Gap, Inc. was recently released. The study investigated the scheduling practices of 28 Gap stores in the Chicago and San Francisco area and applied specific controls to a subset of those stores. For example, some store managers were given greater flexibility in allotted weekly hours and employees were allowed to swap shifts directly without management approval. The findings conclude that while the average associate did not see their hours increase, part time workers did see an increase in their hours. The productivity in the control stores showed a measurable increase as well as a 7% average increase in sales over the course of the study. In general, last minute shift changes were found to be more the result of corporate decision-making rather than consumer demand.

Equal Pay

New Jersey: The legislature passed one of the strongest equal pay laws in the country which could become a model for other states. The bill expands the current standard of “equal pay for equal work” to equal pay for “substantially similar” work.

Labor Policy

Labor Department: The department announced that the new Payroll Audit Independent Determination (PAID) program would begin April 3. The compliance-focused amnesty program allows employers to self-report wage violations to avoid penalties as a result of legal proceedings.

Hawaii: A senate committee deferred legislation that would have required franchisees to disclose that they are not participating in advertised promotions of the franchisor.

Michigan: The governor signed into law a bill that prevents localities from regulating an employer’s ability to question potential hires or employees about salary history.

Burgerville: The radical union Industrial Workers of the World (IWW), otherwise known as the Wobblies, has been organizing Burgerville workers for years. The union reportedly has an organizing presence in six of the chain’s 42 locations. This week it demanded union recognition at a Portland location, threatening to file an election petition with the NLRB which would officially trigger the election process. The Wobblies came close to organizing some Minneapolis-area Jimmy John’s locations in 2010 and have come as close as any union to conducting successful campaigns in the QSR sector.

McDonald’s: McDonald’s is expanding its three-year-old education benefits program, tripling the amount of money some workers can get each year to help pay for college or trade school tuition.


Alabama: Legislation requiring online marketplaces to facilitate the collection of sales taxes for third party sellers passed both the house and the senate and moves to the governor for signature.

Connecticut: California-based online retailer Newegg, has agreed to collect state sales tax at point of sale effective July 1. The company, in compliance with a recently passed state law, originally chose to merely inform its customers of their tax obligation rather than collect and remit the tax on their behalf. Responding to consumer unrest over their uncollected tax obligations, the company has elected to instead collect and remit the state’s sales taxes.

Georgia: An economic nexus bill passed both the senate and the house and heads to the governor’s desk for signature. The bill would require remote sellers with annual retail sales exceeding $250,000 into the state, or at least 200 in-state transactions, to either collect and remit sales tax or report the tax information to the state.

Data Privacy

Alabama: A bill requiring companies to notify customers of data breaches within 45 days was signed into law by the governor. The bill includes language establishing “reasonably determined harm” as the requirement for notification and does not require notification if the data in question was truncated or otherwise encrypted. Once signed, the law would make Alabama the 50th state to pass a data breach law.

Arizona: A bill expanding the existing law governing data breaches passed both the house and the senate and now heads to the governor for his expected signature. The bill, which is supported by the attorney general, strengthens notification requirements and expands the definition of personal information to include fingerprints, electronic signatures and email addresses. The bill was amended to ensure that a breach must still result in “substantial economic loss” to trigger notification requirements.

Under Armour: The apparel company announced that its MyFitnessPal nutrition application was breached and approximately 150 million consumers were affected. The breach reportedly did not affect payment information but did likely include criminal access to usernames, email addresses and account passwords.

Hudson’s Bay: The parent company of Saks Fifth Avenue and Lord & Taylor stores announced a security breach affecting credit and debit card payment information for up to 5 million consumers.

Product Labeling

California: A Los Angeles County Superior Court Judge determined that companies who sell coffee in the state must label the product with cancer warning labels under the state’s controversial Proposition 65 law. Coffee makers and distributors are likely to appeal the far-ranging decision, delaying any final legal outcome.

Key Takeaways

• The Center for Worklife’s “Stable Scheduling Study” is one of the first studies conducted in cooperation with an actual business, in this case Gap, Inc. It will surely be featured in ongoing policy discussions in localities such as Philadelphia, Chicago and Los Angeles. It also reinforces the labor community’s position on the issue – that “stable schedules” lead to increased sales and productivity and are good for business. It’s important to note that the study was conducted under controlled (artificial) conditions and the applicability of the study may be limited. However, that fact will likely will be lost in the political conversation.

• The announcement of an NIH-funded minimum wage/obesity study that will compare employees in Minnesota and North Carolina represents a significant milestone. If the study establishes causality between low minimum wage rates and an uptick in obesity rates (which leads to a host of chronic diseases), it would open up a new line of attack in the ongoing national conversation around restaurant and retail business models – one that is validated by a respected arm of the federal government. Connecting the minimum wage rate directly to public health outcomes would put brands in a difficult position with elected officials, policymakers, opinion leaders and their employees.

Legislature Status for Week of 4/2/18
• The United States Senate is in recess this week
• The United States House is in recess this week
• Twenty state legislatures are meeting actively this week:


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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