Regulatory Wrap-Up: Scheduling, paid leave in the spotlight in several states
Tipped Wage: The National Employment Law Project and the Restaurant Opportunities Center released a report this week aimed at discrediting the Labor Department’s proposed tip pooling regulation. The study states that over half of earnings for waiters (59%) and bartenders (54%) come from tips and the new rule would allow companies to take that money from workers, depriving them of a substantial portion of their income.
St. Paul, MN: The Citizen’s League, a nonpartisan public interest group, is holding “listening sessions” in conjunction with the city as the council considers a wage increase similar to the recently enacted $15/hr minimum wage in Minneapolis. Part of the discussion centers on adopting a local tip credit (which is unlikely).
Maryland: The General Assembly voted to override the governor’s veto of paid leave legislation that passed both chambers during the 2017 session. The bill is slated to become law in 30 days but could be extended to 90 days to allow for more time to comply. The law requires employers with 15 or more workers to provide five days of paid leave a year and applies to full, part time and seasonal employees. The bill contains no preemption language so localities in the state could still pass more generous proposals as is the case currently in Montgomery County, MD.
New Hampshire: A paid leave bill passed its first reading in the house and is moving through the committee process. The bipartisan bill allows workers up to 12 weeks of paid family and medical leave funded by participating employee quarterly contributions capped at .5 percent of weekly wages. The bipartisan bill has been well received and will likely have enough support and momentum to ultimately be enacted.
New Jersey: With the election of Phil Murphy as governor, the state is returning to full Democratic control and progressive legislation is expected to advance quickly. This week restrictive scheduling legislation modeled off other jurisdictions like San Francisco and Seattle was introduced in the senate. While wage and paid leave legislation are expected to be the first priorities, scheduling legislation could also become a priority of leadership.
Supreme Court: The U.S. Supreme Court announced they would hear the landmark Wayfair v. South Dakota case regarding the requirement that out of state sellers collect the state’s sales tax. The decision to hear the case was praised by the brick and mortar retail community as well as state governments that are currently barred from enforcing collection on many out of state sellers with no physical connection to the state. The case will be heard later this year and the announcement could increase pressure on Congress to finally act to level the playing field for both online and offline retailers.
Federal: The Trump administration released a guidance document which allows for states to apply for specific waivers to their Medicaid programs. The guidance was released in response to several requests from states to require some Medicaid recipients to work in order to receive benefits. Opposition groups will likely bring a legal challenge questioning the authority of the administrative action without the consent of Congress.
Supreme Court: The Supreme Court declined to take up the case Hall v. DirecTV. The Fourth Circuit ruled that DirecTV and its subcontractor were joint employers under the Fair Labor Standards Act because the two were not “completely disassociated.” This determination stands in contrast to the NLRB’s recent reversal of the Obama-era Browning-Ferris decision. For now, employers who depend on the franchising model or third-party contractors will need to keep an eye on further agency action and applicable circuit precedent.
NLRB: The Teamsters union has filed a suit in the D.C. Circuit Court of Appeals in an effort to restore the Browning-Ferris Industries precedent established under the Obama-era NLRB. The current NLRB overturned that precedent and the union is arguing that William Emanuel should have recused himself due to a conflict of interest.
Labor Department: Signaling a focus on compliance as opposed to the Obama-era focus on enforcement, Secretary Acosta revived a collection of opinion letters issued to employers in 2009 that were withdrawn under the Obama administration. The practice of issuing fact-based opinion letters specific to individual companies regarding their overtime and wage requirements is the preferred method of providing guidance to employers regarding their wage obligations under the law.
NLRB: President Trump officially nominated lawyer John Ring to serve on the National Labor Relations Board, replacing fellow Republican Philip Miscimarra whose term expired in December. Ring’s nomination needs to be approved by the Senate. Once seated, his placement will reestablish a 3-2 Republican majority on the board.
New York City, NY: Several labor groups announced this week new revenue streams as a result of the 2016 city ordinance which allows fast food employees to insist their employer automatically deduct charitable contributions out of their paychecks and forward the money to a nonprofit of the employee’s choosing. Fast Food Justice announced that 1200 workers have agreed to contribute $13.50/mo. to the new organization which will work to advance higher minimum wages, affordable housing and immigration reform among other issues. The Restaurant Law Center has initiated a legal challenge to the city law.
Visa: Visa announced last week that it will move away from requiring signatures for most transactions beginning in April. Similar announcements from Mastercard, Discover, and American Express showcase the obsolete nature of the security measure. Merchants welcome the change as it will reduce transaction times for customers and could drive down interchange fee costs for the more expensive signature method.
Los Angeles, CA: The city attorney filed a lawsuit against several port trucking companies alleging that truckers have allegedly been misclassified as independent contractors instead of regular employees resulting in exploitation and wage theft. The three companies, CMI Transportation, K&R Transportation and Cal Cartage Transportation have been the center of numerous complaints brought by truckers and were also featured in a series of expose stories published last year by USA Today. It is unclear if neighboring Long Beach, which jointly operates the LA/LB port, will take similar action.
• The decision by the Supreme Court to take up the South Dakota online sales tax case will have major reverberations throughout the state tax law community. Since the decision will not come until late spring at the earliest, state legislatures will continue to pursue legislative solutions that allow them more collection authority. The case could also spark renewed interest in federal legislation that would provide protections for smaller online sellers, protections that will not likely be granted in a narrower court decision. Merchants, both online and traditional, should pay very close attention to this case and the reactions of state policy makers.
• According to ICE officials, the 7-11 immigration raids this week are the first in what will be many more enforcement actions. A key tactic in the president’s overall approach to immigration is to portray some employers (often entry-level employers) as “magnets” for undocumented workers. As Trump plays to his base, employers will be portrayed as the villain. Since 2018 is an election year, employers need to prepare for both reputational challenges as well as the operational disruptions that these high-profile events entail.
• While Walmart’s increase in their starting wage to $11/hr is drawing national headlines, its commitment to 10 weeks of paid parental leave for full-time workers may be the most noteworthy development. That benefit level sets a new marker within the retail community that has implications for all employers in the fight to attract and retain quality workers.
Legislature Status for Week of 1/15/18
• 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: 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
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.
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