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Regulatory Wrap-Up: Health care, swipe fees and scheduling in the spotlight

BY CSA Staff

Wages

Massachusetts: The secretary of state officially certified the minimum wage initiative for the November ballot. The initiative would raise the state minimum wage to $15/hr. by 2022. If needed, activists will have additional time to gather signatures (up to June 19, 2018) should the legislature fail to act on the issue.

Minneapolis, MN: The state chamber of commerce along with other business trade associations pulled out of pending litigation seeking to overturn the city’s minimum wage law. The announcement follows a county judge’s refusal to grant an injunction in the case. Minneapolis-based Graco, Inc. is continuing the case.

Massachusetts: The secretary of state officially certified the proposed paid leave initiative for the November ballot. The proposal would provide a maximum of 16 weeks of paid leave at up to 90% of average weekly wages with a maximum of $1,000/wk. The proposal would also create an employer-financed trust fund to cover the costs of the program.

Scheduling

New York: A hearing was held on the recently released scheduling regulations that are slated to go into effect in the near future. The new rules are applicable to employers as defined under the state’s Miscellaneous Industries and Occupations wage law, which only applies to traditional retailers. Restaurants are covered under a separate statute, the Hospitality Industry wage law. The new “call-in” pay regulations will only impact retailers, while restaurant employers remain subject to the existing state regulations governing “call-in” pay. The 45-day comment period established by the state labor department is scheduled to end Jan. 7.  It is unclear what effect, if any, the senate hearing will have on the pending regulations.

New York City, NY: The city council passed a bill that mandates employers allow workers to take up to two unscheduled leave days per year for a “personal event.” The bill also forbids retaliation and applies potential fines to violators. The bill was transferred to the Mayor’s desk for likely signature.

Swipe Fees

California: A ninth circuit panel found that state law banning merchants from applying a surcharge to credit card purchases violates the free speech rights of the merchants. The ruling validates a 2015 decision by a lower court but limits the ruling to the five plaintiffs in the case. The state attorney general’s office is considering its options following the ruling.

Health Care

Labor Department: In response to an earlier executive order from the president, the labor department released a proposed rule allowing for association health plans (AHPs). The rule allows for AHPs to offer insurance options that do not comply with standards established under the ACA, including pooling insurance plans across state lines. Employers have welcomed the new rule, however, critics warn of potential destabilization effects of the rule on the existing ACA insurance marketplaces.

Taxes

Federal: In late December, the U.S. Government Accountability Office released a report finding that states continue to lose billions of dollars in revenue as a result of their inability to collect sales tax dollars from their residents, via online transactions from retailers with no collection obligation in a given state. The study also noted that many of the legislative solutions empowering states to compel collection beyond their borders could result in significant compliance costs for many small sellers.

Ohio: The American Catalog Mailers Association sued the Ohio Department of Taxation in state court over the state’s new physical nexus sales tax collection law that went into effect Jan. 1. Under the law, internet and catalogue retailers that have no presence in the state, other than “applications downloaded onto the customer’s computer or cell phone,” must still collect the state’s sales taxes. The law applies to sellers with over $500,000 in sales per year into the state.

Trade

KORUS: The Trump Administration and trade representatives from South Korea began discussions on the potential update of the five-year old KORUS free trade agreement. It is likely that many of the more contentious discussions will center on automobile manufacturing. It remains to be seen how much of a priority the administration gives the KORUS discussions and how it will navigate the ongoing dispute with North Korea that is dominating much of the dialogue in the region.

Federal: The Trump Administration has signaled it is likely to take action on various trade-related issues that have been under discussion for several months. Most notable to retailers may be actions taken related to imported steel, solar panels and washing machines. The U.S. International Trade Commission has determined that increased imports of both solar panels and washing machines are “a substantial cause of serious injury to the domestic industry” which now gives the President the legal basis to restrict those imports.

Immigration Florida: A ballot initiative, if approved by the state’s constitution revision commission, would mandate employer participation in the federal E-Verify work authorization program. In the past, the state’s business community has opposed mandatory E-Verify for private employers.

Key Takeaways

• With most state legislatures convening this month, there will be significant legislative reaction to the spate of sexual harassment stories in the news. It’s highly likely that many states will address their laws concerning non-disclosure agreements (NDAs) for discrimination claims. Many feel that these agreements deter victims from coming forward with accusations. Additionally, the new tax law eliminates the deduction of settlement payments if an NDA is involved.  This is another example of how the public discourse can drive political and policy outcomes.

• As the Trump Administration and Congressional Republicans search for their first big agenda item in 2018, hopes by some for entitlement reform appear to be waning. Senate Majority Leader Mitch McConnell has indicated that the Senate will not pursue reforms leaving the 2018 agenda an open question. Operators should still continue to leverage significant opportunities for progress on key issues at the agency and regulatory level.

• With tax reform completed, the administration would prefer to focus on trade issues that align with Trump’s “America First” campaign promises. Continued action on NAFTA, initial discussions on revamping KORUS and potential actions on specific imported products will create an opportunity for Trump to push a platform of aggressive international actions in defense of American interests. Retailers will need to pay close attention, particularly to the discussions and actions related to specific products, as potential tariffs and the inevitable international response to them could cause significant market disruptions.

• The employer community needs to pay close attention to how states, particularly high-income tax states which tend to be blue, react to the new tax bill. Many are discussing tax shifts – moving the tax burden from individual income taxes, a large portion of which are no longer deductible, to payroll or other employer-related taxes that are deductible. The bottom line is that the debate on taxes will continue in some large states very important to operators.

Legislature Status for Week of 1/8/18

• The United States Senate is in session this week
• The United States House is in session this week
• Thirty-four state legislatures are meeting actively this week:o AL, AZ, CA, CO, DE, FL, GA, IA, ID, IN, KS, KY, MA, MD, ME, MI, MO, MS, NC, NE, NH, NJ, NY, OH, OK, PA, RI, SC, SD, TN, VA, VT, WA, WV

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.

 

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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Q&A: Target talks about its just-announced new brand

BY CSA Staff

Target Corp. continues to expand its portfolio of exclusive owned brands.

Hitting Target’s stores and website in early February will be Universal Thread, a women’s lifestyle brand that is grounded in denim and apparel, accessories and shoes. Prices will range from $5 to $39.99. The collection will be available in an unusually wide range of sizes, ranging from 00-26W, making it Target’s most size inclusive brand to date. The new brand comes on the heels of 12 other exclusive brands the retailer announced last year.

Target posted a Q&A with Mark Tritton, its executive VP and chief merchandising officer, about the creation of Universal Thread and the other new brands in the works. Here are excerpts (for the complete Q&A, click here).

Why the focus on denim?
Denim is a part of every woman’s wardrobe, and with fewer options in the marketplace and learnings from the brands we’ve recently launched, we’re excited to bring our guests a lifestyle brand rooted in denim that’s also an amazing everyday value. This brand is all about ideas and outfits, not just items. It includes apparel, footwear and accessories that are sure to become guest favorites.

Finding the perfect jeans can often seem impossible. How does Universal Thread measure up?
In developing this brand, we conducted research with nearly 1,000 women from across the country to better understand their needs when it comes to shopping denim. What we heard from nearly all of them was that they dreaded shopping for new jeans. Whether the rise was too long or the inseam was too short or the pair of jeans they wanted didn’t come in their size — finding the perfect fit for their body type was just too challenging. That’s a problem we wanted to solve. So, our design team rolled up their sleeves and got to work creating a line that caters to all women, with multiple fits, silhouettes, lengths, rises and sizes.

What is something you’ve learned from the new brands that’s had an impact on Universal Thread?
What’s most exciting about this brand is that there’s truly something for everyone. The assortment has fashion and everyday pieces, and is offered in different fits, silhouettes and sizes that guests will come to know and trust.

In terms of learnings, when we introduced A New Day, a portion of the assortment was offered in a full range of sizes. Guests responded really well to that, so we’re offering all apparel within Universal Thread in sizes 00-26W. This is the first time we’ve introduced a brand with such an expansive range, and we’re excited to see the response from our guests.

What can guests expect for the future of owned brands at Target?
Guests can expect to see great ideas brought to life in their home, their wardrobe and more that provide exceptional value and innovative design. We’re improving our existing assortment or bringing newness. We’ve got plenty more amazing brands up our sleeves to make Target the preferred destination for guests again and again.

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This group of consumers prefers brick-and-mortar

BY Gisselle Gaitan

Although there has been an uptick in e-commerce when it comes to pet owners, many prefer to purchase products for their from brick-and-mortar locations like PetSmart and Petco.

That’s according to the latest market research report from Packaged Facts titled, Pet Food in the U.S., 13th Edition. The report takes a look at the comprehensive overview of the market size, projections, cross-market-trends and acquisitions.

About 88% of dog owners and 93% of cat owners admit to purchasing food for their pets from a store within the last 12 months, the report found. The demographic most comfortable with non-traditional purchasing options is millennials. This group was more likely than any other to buy items through a website or app for home delivery or in-store pickup.

Packaged Facts also notes that in 2017, pet retailers strengthened online offerings without ignoring their brick-and-mortar locations. PetSmart added 63 locations in its first three quarters and opened its 1,600th store. Petco operates more than 1,500 stores and Pet Supplies Plus has 400 locations in the nation.

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