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

BY CSA Staff

Wages

New Jersey – Several local mayors and other policymakers, citing the recent entry-level pay raise announcement from Amazon, are calling on the state to move ahead with plans to raise the minimum wage to $15/hr.

Washington – The state labor department released a draft rule this week that if finalized, amends the rules relating to overtime pay for workers in the state. The proposal calls for increasing the salary threshold to as much as $75,000/yr and is open for public comment until Oct. 26.

Anaheim, CA – This week Disneyland Resort announced that it is canceling its Anaheim luxury hotel, blaming the city’s unstable business environment. Months ago, local hotel unions threatened to place a $15/hr measure on the ballot targeting the hotel (limited to tax subsidy recipients) in an effort to gain concessions from the theme park. When Disneyland held firm, the union advanced the measure to the ballot. In response, the theme park announced it would not accept city subsidies but a debate continued over the applicability of the requirement.

Jackson, MS – The Magnolia Mothers Trust, a local non-profit group, will administer a guaranteed income program (often referred to as a universal basic income) on a trial basis for a limited number of low-income families in the city. Funding for the program comes from private donors as well as the Economic Security Project and will provide $1,000/mo for a year with no strings attached. The program will begin in December and will target low-income African-American mothers in the community. A lottery will determine participants. The Magnolia Mothers Trust will study qualitative data such as spending patterns and increased community engagement.

St Paul, MN – The city council released an initial draft of a $15/hr minimum wage ordinance they plan to consider before the year’s end. The proposal would mandate increases for large businesses with 100 workers or more to begin gradually increasing wages in 2020 arriving at $15/hr by 2023. Smaller businesses would have six years and “micro-businesses” with five or fewer workers would have ten years to comply. The current draft does not allow an exemption for tipped workers but does contain a 90-day exemption for both youth (14-17 year olds) and training programs. Franchises with ten or more locations nationwide are considered large businesses under the proposed law.

Amazon – The company faced backlash from many of its long-term employees after the recent elevation of its hourly starting wage rate to $15/hr. One of the chief concerns was that they would receive less total compensation when accounting for a subsequent reduction of benefits and stock options. Amazon responded by raising the wage rate and instituting a cash bonus schedule for long-term employees as they reach certain milestones.

Scheduling

Washington – A house committee heard testimony regarding a potential statewide restrictive scheduling mandate that may be considered during the next legislative session. Seattle is one of a few localities across the country with a scheduling mandate already in place.

Philadelphia, PA – The city council will hold a hearing on Oct. 30 to review the restrictive scheduling legislation.  The bill is expected to be amended to address some of the business community concerns prior to a vote, but the details of such amendments have not been released.

Labor Policy

U.S. Supreme Court – This week the U.S. Chamber of Commerce urged the U.S. Supreme Court to take up a California school district’s challenge to a ruling that found that employers violate federal equal pay law when they factor workers’ prior pay into salary offers. The case could undermine salary history bans which have been enacted by many states over the past few years.

New York – The Cuomo Administration released finalized guidance materials describing employer obligations under the state’s new sexual harassment policies. Businesses in the state must adopt written sexual harassment prevention policies within a year and implement mandatory anti-harassment training.

Starbucks – The coffee retailer announced an expanded benefit plan for employees that subsidizes child care services. The company will subsidize up to ten days a year of child care and care for elderly family members in instances where an employee’s plan for such care has fallen through. The backup care plan is offered through a partnership with Care.com, a provider of a wide range of care and in-home services.

Activism

Purple Pig – Ten protesters affiliated with various workers rights organizations entered the Purple Pig restaurant in Chicago and disrupted business operations. The protesters were calling on the restaurant’s management team to better enforce their sexual harassment policies after an alleged incident.Taxes

New Jersey – The governor signed legislation mandating out-of-state sellers with at least 200 transactions or $100,000 worth of sales into the state per year register with the state and begin collecting sales taxes. The language also includes a mandate that online marketplace providers collect and remit on behalf of third-party sellers using their platform. The signing follows the governor’s conditional veto of similar legislation which was attached to the state budget earlier this year.

West Virginia – The state tax department announced that out-of-state sellers with at least 200 transactions or $100,000 worth of sales into the state per year must register with the state and begin collecting taxes by Jan. 1, 2019. The governor had previously stated he wanted to see the legislature act on the issue and not pursue additional collection authority through regulation. The state could still look to address the collection responsibilities of online marketplaces during the next legislative session.

Washington D.C. – The city council held a public hearing to review legislation expanding the city’s authority over sales tax collection from out-of-state sellers. The bill mirrors other state activity on the issue and establishes a threshold of $100,000 worth of sales or 200 transactions per year. Companies with sales above the threshold must register with the city and begin collection.

Privacy

California – A group of Walmart customers has initiated a class action lawsuit in state court alleging that the retailer illegally shared their personal information with Facebook.

Menu Labeling

California – The judge who earlier this year determined that coffee sellers must display cancer warnings under the state’s Proposition 65 law, rejected separate bids by Dunkin’ and Starbucks to dismiss a pending case regarding civil penalties against the companies. The companies, along with other coffee merchants, have pointed to an ongoing rulemaking process in the state to exempt coffee from Proposition 65 labeling requirements as well as a recent FDA endorsement of that state rulemaking effort.

Key Takeaways

  • The announcement by Starbucks this week related to the subsidization of child care as an additional benefit for workers is significant. Not only are they now even more competitive in the contest to attract and retain the best workers, they have successfully pulled together a comprehensive benefit package that essentially creates a “cocoon of support” around their employees. From healthcare, paid leave, stock options, tuition support and now child care support, the company has essentially created an infrastructure of support around their employees that will set them apart. It sets a new bar in the benefits conversation.
  • Reports this week indicate that the business community may not be as united on the overtime rule this go-around. Many companies, including Walmart and White Castle, increased their base wages for some managers in anticipation of the Obama-era overtime rule going into effect. After the rule was enjoined, they never reverted back. These companies are going to be less likely to oppose a steep increase and expect proponents to cite these case studies as evidence that claims of diminished opportunities are overblown.

Legislature Status for Week of 10/15/18

  • The United States Senate is on recess this week
  • The United States House is on recess this week
  • Five state legislatures are meeting actively this week:
    • MA, MI, NC, NJ & PA

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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