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Regulatory Wrap-up: Insider’s guide to retail-related legislative developments – April 16

BY CSA Staff

Wages

Maryland: Legislation to raise the state’s minimum wage to $15/hr failed to pass prior to the session adjournment. Similar legislation will likely be revisited next legislative session.

Massachusetts: Governor Baker registered his preference for the legislature to address both the minimum wage increase and the establishment of a paid leave program as opposed to leaving the issue to the ballot. The legislature could choose to approve a more moderate minimum wage increase and paid leave requirement; however, since both issues are already certified for the ballot, advocates would have to agree to support legislation in order for the ballot initiative to be avoided, which remains unlikely at this stage.

New Jersey: The legislature has not yet passed the minimum wage increase bill that has long been expected since Governor Murphy’s recent election. The legislature has passed several pieces of labor-related legislation but the wage bill is still under negotiation and will not have an opportunity to advance until June at the earliest.

Rhode Island: A house committee recommended that legislation to increase the minimum wage to $15/hr by 2022 be held for further study, slowing down and potentially stalling the bill.

St Paul, MN: Mayor Carter told members of the Midway Chamber of Commerce that he fully expects the city to approve a $15/hr minimum wage by the end of the year. Debate continues on issues such as the size of businesses that would be impacted, inclusion of a training wage or the length of the phase-in period. At the event, the mayor also registered his opposition to incorporating a tipped wage into the expected law (Minnesota is one of seven states with no tip credit).

Washington D.C.: In an interview with Politico, the Restaurant Workers of America, a group of servers and bartenders, stated their opposition to the June 19 ballot measure that would gradually eliminate the city’s minimum hourly wage for tipped workers. The organization’s leadership also expressed concerns over language in the recently-passed funding bill that repealed the Obama-era rule banning tip pools. The group has been effective in some states in advancing the argument that the elimination of tipped wages actually decreases the take home pay of servers.

Paid Leave

Hawaii: Two bills that establish paid leave, one mandating that certain businesses offer leave and another that would set up a state-run program by 2023 have stalled. It remains to be seen whether or not the issues will be ironed out before the legislature adjourns.

Maryland: The legislature approved an income tax credit of up to $500 per qualified employee for businesses with fewer than fifteen employees that offer paid leave. The legislation is intended to soften the impact of the paid leave law on small businesses and is expected to be signed by the governor.

New Jersey: The senate approved paid leave legislation, sending the bill to the governor’s desk for his expected approval. The business community was successful in securing a number of important provisions, including a preemption on local leave ordinances, blackout dates as set by employers, an exemption for seasonal workers and a reduction in the maximum hours of leave (72 to 40 hours). The new law will go into effect 180 days following the governor’s approval.

Wage Theft

Labor Department: The Wage and Hour Division released a field assistance bulletin clarifying the agency’s authority to enforce new tip credit rules as included in the recent government funding law. The bulletin confirms that businesses who pay the federal minimum wage of $7.25/hr may allow employees to participate in tip pools. The bulletin also confirms that the agency will enforce provisions that prevent employers from keeping any portion of the pooled tips.

Labor Department: The Labor Department released additional details of its new nationwide pilot program, the Payroll Audit Independent Determination (PAID) program, which is intended to facilitate resolution of potential overtime and minimum wage violations. The agency’s new web portal addresses many of the initial questions related to the program. Meanwhile, a coalition of state attorneys general sent a letter to Labor Secretary Acosta stating that the federal program would not exempt employers from state laws and they intend to prosecute any violators.

Equal Pay

Federal Court: The 9th Circuit Court of Appeals reversed a lower court decision and found that prior salary alone, or in combination with other factors, does not justify a wage differential between employees of different genders. The 9th Circuit has jurisdiction over Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.

Scheduling

Illinois: A house committee held a hearing on the proposed “Fair Scheduling Act.”  The bill would require employers to post schedules 72 hours in advance and would mandate premium pay when shifts are adjusted within that window. One of the more concerning aspects of the bill is the allowance for private right of actions as an enforcement mechanism. The bill also contains no preemption of local mandates. It is unclear at this stage whether or not the bill has the support to pass both chambers. The governor would likely oppose it, setting up a potential veto override.

Labor Policy

NLRB : This week the U.S. Senate confirmed John Ring to fill the NLRB’s only remaining vacancy, restoring the five-member Board to full strength. Reports also indicate that Ring will chair the Board. With a Republican majority in place, many expect the Board to continue overturning Obama-era precedents and pursue a pro-employer agenda on the rulemaking front.

Data Privacy

Arizona: A bill expanding the existing law governing data breaches was signed into law by the governor. 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.

Taxes

Hawaii: A bill that would subject retailers with more than $100,000 in annual sales to sales tax collection requirements failed to reach agreement on amendments from the senate and appears dead for the session.

Kentucky: Language that expands the definition of a retailer in the state for sales tax collection purposes was included in a larger tax package. The legislature overrode a Gubernatorial veto of the tax package and the language will now be enacted into law. The bill resembles a requirement first passed by New York in 2009 and applies to sellers who generate more than $10,000 in sales into the state through an “affiliated” Kentucky-based agent.

Oklahoma: Legislation was signed into law by the governor that expands sales tax collection responsibilities for out-of-state sellers. They must either collect sales taxes or disclose to the state’s tax commission the name and dollar amount of items sold to a state resident. The law is modeled after a Colorado law that was ruled constitutional by the 10th Circuit Court.

Transportation

California: Senator Ricardo Lada, who represents the Port of Long Beach, introduced a bill that would hold retailers accountable for contracting with short haul trucking companies that have a history of wage theft and other labor violations. Specifically, the bill would empower the state’s Division of Labor Standards Enforcement to identify and list trucking companies with judgements against them for a wide variety of labor violations. Any entity that contracts with a listed trucking company would be “jointly and severally liable” with the trucking company for any future unpaid wages found due to drivers or fines due as civil penalties to the state.

Immigration

Tennessee: Immigration and Customs Enforcement (ICE) agents detained 97 individuals in what is being reported as one of the largest employer immigration raids in a decade. The individuals were employed at a meatpacking plant in rural Grainger County.

Key Takeaways

• As reported this week by CNN, Alabama’s “Jim Crow economy” is back in the news with the city arguing this week in federal court that the state violated the 14th amendment and the Voting Rights Act when it preempted Birmingham’s local minimum wage increase. The lawsuit argues that “racial animus” was at the center of state lawmakers’ intent. Advocates are intentionally merging the issues of racial and economic justice and are quick to point out that only white state lawmakers voted in favor of preempting a majority African-American city council. Brands with operations in Alabama need to be cognizant of and sensitive to this quickly escalating conversation and its racial overtones – especially if the “Jim Crow Economy” narrative escalates nationally.

• This week, eleven Attorneys General weighed in against the Labor Department’s new wage theft compliance (PAID) program. The further politicization of the voluntary program may make it even less attractive for employers to participate. While the AGs were careful to encourage voluntary participation, they reiterated that under this federal program, participants would not be shielded from applicable state level laws and subsequent enforcement actions. Additionally, brands may want to consider the possibility that public participation in the program could potentially make them a target for these same AGs.

• The ICE raids this week should alert operators and brands that workplace raids and other high-profile events will continue to play a large part in the Administration’s approach to immigration enforcement. ICE has been very straightforward that they will continue to leverage raids against notable companies and brands to maximize the political value of the operations.

Legislature Status for Week of 4/16/18
• The United States Senate is in session this week
• The United States House is in session this week
• Twenty-six state legislatures are meeting actively this week:
o AK, AZ, CA, CO, CT, DE, HI, IA, IL, LA, MA, MI, ME, MN, MO, NE, NH, NJ, NY, OH, OK, PA, SC, TN, VT, WI

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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No more wedding parties at Banana Republic

BY Marianne Wilson

Gap Inc. is throwing in the towel when it comes to bridal wear.

Gap’s Weddington Way brand, which operates an e-commerce site and in-store shops at Banana Republic, said the shops will close down within the next few months. In a note on its website, the brand said it “hopes” to continue to serve customers online indefinitely. But “at this point,” is only guaranteeing online orders through June 11.

Weddington Way was founded in 2012, in San Francisco. Gap acquired the digitally native brand in December 2016. The terms of the transaction were not disclosed.

J. Crew Group exited the bridal wear category in summer 2016.

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Planting Roots in Retail

Everybody loves spring. Whether you’re someone that can’t wait to enjoy that first warm-weather hike in a local park, or you’ve already bought your plants and seeds and are ready to get your hands dirty in the garden, spring gives all of us the opportunity to get back outside and celebrate new beginnings.

Spring is also an exciting time in the retail industry. As temperatures rise and flowers are blooming, stores across the country open their garden centers stock the shelves with products to enjoy the outdoors. It’s also the season of opportunity. It’s the time when many people think about getting a fresh start, learning something new, or taking a first step toward a long-term goal. And simply put, few industries offer more opportunity than retail.

Whether you’re a 16-year-old looking to earn your first paycheck or a mature worker looking to stay active later in life, retail offers individuals from all walks of life the ability to choose your own path. And the sky is the limit.

Just ask one of the many employees who planted their roots in retail and have been growing within the industry ever since.

Like the assistant store manager who started at Lowe’s as a seasonal cashier six years ago. Or the 33-year veteran Publix employee who works his way up from part-time associate to leadership development manager. Or the sales associate that joined Gap in 1975 as a seasonal employee, but now, 43 years later, considers everyone at the company family.

These “part-time to profession” stories don’t get told often, but they’re common in the retail industry. The ladder of opportunity in retail means everyone has a fair chance to build a career that works for them. And as spring brings a rush of seasonal hires, it’s important to note that seasonal hiring isn’t just about making sure garden centers are staffed and flip flops are well stocked. It’s about opening the door for all to the endless possibilities that exist when working in retail.

For some, a spring job is a first paycheck, for others it’s a chance to earn extra money on a flexible schedule. But for many, it’s the first step on a career ladder with boundless opportunities.

In addition to offering the scheduling flexibility and upward mobility that have served as the hallmark of the industry for decades, more and more retailers are offering mentorship programs, leadership development, and skills training to ensure employees have the tools they need to succeed in life. Whether that means providing tech education to teens or skilled trade apprenticeships, or even on-the-job management training, retailers know investing in their employees is key to their future success.

It’s for these very reasons that each year, thousands of people across the country, including many this spring season, choose to plant their roots in retail.

We can’t wait to see how they grow.

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