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Regulatory Wrap-Up: Weekly recap of retail-related legislative/judicial developments – Aug. 6

BY CSA Staff

Wages

Arkansas – The secretary of state’s office granted a 30-day extension to petition gatherers for the $11/hr minimum wage ballot initiative. They met the threshold of valid submitted signatures in order to qualify for the extended time and must now gather and submit an additional 15,000 valid signatures in the coming weeks to qualify for the Nov. ballot.

California – The state supreme court ruled that Starbucks Corp. must pay workers for off-the-clock work at closing. At issue is a Starbucks policy that requires an employee to clock out before uploading data about employees’ hours, sales, and other information. The ruling establishes a new precedent on the issue. Also of note, the 9th Circuit Court of Appeals is reviewing the policy to determine whether it violates federal law. Employers will need to watch both cases and adjust practices accordingly.

Michigan – In a deadlocked 2-2 vote, the state board of canvassers failed to certify the proposed $12/hr minimum wage initiative for the Nov. ballot. Two members of the board cited a pending court case brought by the business community that alleges that the proposed language fails to identify and amend the proper sections of existing state wage law which is a technical violation of the initiative process. A three-judge panel will rule on that case in the coming weeks, following which the state board could revisit the issue depending on the panel’s decision.

Missouri – The secretary of state’s office approved language for the Nov. ballot that would increase the state’s minimum wage to $12/hr by 2023.

Cook County, IL – Advocates were successful in getting a minimum wage increase on the Nov. ballot as a non-binding advisory referendum question. The current countywide law calls for a $13/hr rate by 2020 with future increases tied to inflation, but 109 of 125 localities chose to opt out of the mandate last year. The question is now being put to the voters directly.

Washington D.C. – The city council scheduled a hearing for Sept. 17 to consider legislation that would overturn the voter-passed initiative which rescinded the city’s tip credit. The initiative passed in June by a 56 percent – 44 percent margin. At least half the city council has voiced opposition to the initiative, citing the potential negative impact on the restaurant industry.

Disney – In an agreement with some of the larger unions representing Disneyland Resort workers, the California theme park has agreed to raise the minimum wage for its workers to $15/hr by 2019 and to $15.45/hr by 2020.

Report – The job-review website Glassdoor released a study that found that median base pay for U.S. workers grew 1.6 percent in July compared with the same time a year earlier.

Paid Leave

U.S. Senate – Sen. Marco Rubio (R-FL) unveiled his long-awaited paid leave legislation that allows parents of newborns at least two months of paid parental leave, compensated by the early withdrawal of Social Security benefits roughly equivalent to 70% of their wages. Participants would then delay the date on which they would begin receiving retirement benefits to make up for the amount withdrawn. While receiving significant media attention, passage before Congress adjourns for the year is unlikely.

Michigan – The state board of canvassers certified the proposed paid leave ballot initiative for the Nov. ballot. The mandate would require that employers with more than 10 workers provide at least 72 hours of earned sick time per year and 40 hours for smaller employers. The state legislature could still act and prevent the initiative from appearing on the ballot.

Cook County, IL – Advocates were successful in getting paid sick leave on the Nov. ballot as a non-binding advisory referendum question. Paid leave is currently on the books countywide but 109 of the 125 localities chose to opt out of the county law last year. The question is now being put to the voters directly.

Labor Policy

NLRB – The National Labor Relations Board announced this week that it is accepting public comment on whether or not to overturn the Obama-era Purple Communications decision. That ruling determined that employees could utilize employer email systems to conduct union organizing campaigns. It found that such activities were protected under the National Labor Relations Act. The Board is also inviting comment on other employer-owned computer resources other than email, signaling that it may address the issue in a much more comprehensive fashion.

Taxes

Nebraska – The Department of Revenue notified out-of-state retailers that sell above a certain threshold into the state that they must register and begin collecting and remitting sales taxes on Jan. 1, 2019. The announcement noted the possibility of further authorizing legislation, which is unlikely to occur until the legislature convenes early next year.

Cupertino, CA – The city council pulled back from a plan to institute a per employee “head tax” through a ballot initiative in the fall. Similar to the Seattle tax that failed earlier this year, the council backed off after pressure from the local business community, including Apple, Inc., which is headquartered in the city and is the largest employer with nearly 20,000 workers.

Trade

Federal – A bipartisan group of senators introduced legislation that would give U.S. Congress and the Defense Department investigative powers under the Section 232 process. Section 232 of the Trade Expansion Act of 1962 gives the president varying levels of authority to determine if specific imports pose a threat to national security. President Trump has used this authority to impose steep tariffs on steel and aluminum imports from U.S. allies. Republicans and Democrats in Congress want to limit the President’s power as rhetoric around trade continues to escalate. The bill would likely need a veto-proof majority to become law but does not yet have that level of support.

Federal – President Trump has indicated he may raise the proposed tariffs on $200 billion of Chinese imports from 10% to 25% in a further escalation of the trade war with China. The U.S. has already imposed a 25% tariff on $34 billion in Chinese imports and China has retaliated in kind. The proposed expanded product list includes a variety of consumer products as opposed to the initial round which consisted of mostly industrial and agricultural products.

Key Takeaways

  • The introduction of the paid leave legislation by a prominent Republican leader is an important milestone in the life cycle of the issue. It is the first time that Republicans in Washington have engaged on the issue in a meaningful way. The legislation has an uphill battle, but it signals that the issue is here to stay – for Republicans at all levels of government. Until now, it has been largely viewed as a priority of the labor community and been championed by labor-friendly Democrats. No longer. It is now a bipartisan issue and as such, the business community – especially entry-level employers – will be forced into this conversation as policymakers of both parties search for solutions.
  • The Starbucks wage and hour case in California is an important one for employers to understand and monitor closely. Not only does it set a new compliance standard for all employers in California when it comes to working off-the-clock – even de minimis work – but also it opens employers up to significant litigation in the form of class action lawsuits over back pay. Employers need to follow this case and protect themselves from the potential ramifications.

Legislature Status for Week of 8/6/18

  • The United States Senate is in session this week
  • The United States House is in recess this week
  • Two state legislatures are meeting actively this week:
    • CA, MA

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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Kidbox launches private-label lines, and new ‘box’

BY Deena M. Amato-McCoy

A children’s clothing-in-box company is launching new apparel options — just in time for back-to-school season.

Kidbox is introducing three private-label lines to complement the more than 130 premier brand partners it already features in its merchandise portfolio. The lines, Miki B., Kid’s Club and Baby Basics, feature gender neutral items, and fit into Kidbox’s four style options, city cool, sporty athletic, modern casual, and classic preppy.

“Kidbox has the unique ability to design according to kids’ own style preferences, as opposed to most brands that design to showcase style and color trends,” said company CEO Miki Berardelli. “By tapping into kids through our Kids board of directors, engaging with our customers, and knowing their shopping habits, we have a deep understanding of how kids want to express themselves when it comes to what they wear.”

Separately, the apparel company is also launching a uniform box that features apparel from uniform and schoolwear manufacturer French Toast. Available in sizes 5-14 for girls and 5-16 for boys, each box contains between seven and eight items that cost less than $10 each. The box costs $68.

For every Uniform Box kept, Kidbox will donate a new uniform to a child in need through its partnership with Delivering Good.

Kidbox is only one company competing in the growing children’s clothing subscription segment. Other companies that have found a way to differentiate themselves in the increasingly crowded category include BabyGap, Old Navy, Target and StitchFix, among others.

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Consumer confidence inches higher but….

BY Deena M. Amato-McCoy

Consumer confidence increased in July, however consumers remain wary about future economic growth.

The Consumer Confidence Index now stands at 127.4, up from 127.1 in June, according to The Confidence Board. The “present situation” index increased from 161.7 to 165.9, while the “expectations” index declined from 104.0 last month to 101.7 this month.

“Consumer confidence gained marginal ground in July, after a modest decline in June,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of present-day conditions improved, suggesting that economic growth is still strong. However, while expectations continue to reflect optimism in the short-term economic outlook, back-to-back declines suggest consumers do not foresee growth accelerating.”

Consumers’ assessment of current conditions improved further in July. Those claiming business conditions are “good” increased from 37.2% to 38.0%, while those saying business conditions are “bad” declined from 11.5% to 10.1%.

Consumers’ assessment of the labor market was also more favorable. Those claiming jobs are “plentiful” increased from 40.4% to 43.1%, while those claiming jobs are “hard to get” was virtually unchanged at 15.0%.

Consumers’ optimism about the short-term outlook waned again in July. The percentage of consumers anticipating business conditions will improve over the next six months increased from 20.7% to 23.1%, but those expecting business conditions will worsen also rose, from 9.3% to 10.8%.

Regarding their short-term income prospects, the percentage of consumers expecting an improvement rose from 19.7% to 20.8%, but the proportion expecting a decrease also rose, from 7.9% to 9.2%.

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