Regulatory Wrap-Up: Health care returns to the spotlight
Wages
Labor Department: A group of Democratic senators led by Elizabeth Warren is asking the administration for more information about a Labor Department waiver program that allows some employers to pay disabled workers less than the minimum wage.
Arkansas: The attorney general rejected a proposed citizen initiative to raise the state minimum wage to $12/hr by 2022 citing ambiguous language that would have been unclear to voters. The measure, as drafted, would have also allowed localities to raise wage levels higher than the state rate. The individual who submitted the language has promised to re-submit new language. If the new language is approved, proponents would need roughly 67,000 signatures to be validated in order for the initiative to appear on the Nov. ballot.
Colorado: The house passed a bill that would allow localities to increase their minimum wage levels beyond the statewide rate of $10.20/hr. The bill will move to the Republican-majority senate, where it is unlikely to pass.
Vermont: A house committee passed the senate-approved bill to raise the minimum wage to $15/hr. by 2024. The bill has a good chance of passing the house prior to the May 4 adjournment. The governor has stated he plans to veto the bill in its current form, citing the potential economic impact of the increase
New York City: A group of restaurateurs is publicly petitioning the city to allow surcharges on customers’ bills. Operators point toward a steady stream of new mandates that have increased operating costs in the past few years. The city council is unlikely to take up the issue.
Paid Leave
New Hampshire: The push for a paid leave program died in the senate this week following Governor Sununu’s announcement of his opposition to the bill. Due to concerns over cost and long-term viability, the senate voted to study the bill further, effectively killing the legislation.
New Jersey: Governor Murphy has stated he plans to sign the paid leave bill into law on May 2. The bill’s effective date is 180 days after the governor acts, which is now projected to be Oct. 29.
Austin, Texas: City business groups have initiated litigation challenging the validity of the recently-passed paid leave law.
Dallas: Several councilmembers are supporting local activists’ efforts to advance a paid leave ballot initiative identical to the recently-passed law in Austin. Labor-backed groups, such as the Workers Defense Project, are currently collecting signatures. They will need to submit roughly 65,000 valid signatures by June 11 to qualify for the November ballot.
San Antonio: As in Dallas, labor activists are pushing a paid leave ballot initiative modelled off the recently-passed Austin law. Signature gatherers would need to collect roughly 75,000 signatures to place the measure on the ballot.
Equal Pay
New Jersey: Governor Murphy signed into law one of the strongest equal pay measures in the country, which could become a model for other states. The law expands the current standard of “equal pay for equal work” to equal pay for “substantially similar” work. It will go into effect on July 1 and allows employees to sue for up to six years of back pay and treble damages among other provisions.
Wage Theft
Primanti Bros.: The Pittsburgh-based restaurant company settled a wage-violation class action case for $2.1 million. The lawsuit involved 922 tipped workers over a three-year period.
Papa Johns: Several Boston-area franchisees are being sued in a class action claim for alleged violations. The lawsuit claims that the companies failed to properly inform customers that delivery fees would not be paid to delivery drivers.
Taxes
Seattle: A bill was introduced in the city council to establish an “employee hour tax” to fund an expansion of homeless services in the city. The language calls for a levy of $0.26 per hour worked for all employees in the city and would apply to businesses with more than $20 million in taxable gross income in the most recent calendar year. The per hour tax would transition into a 0.7% payroll tax beginning in 2021. In 2009, when current mayor Tim Burgess was a councilmember, the city repealed a per employee tax. It is safe to assume the council will support a measure that taxes large businesses to pay for city services, but it is unclear at this time whether the mayor supports the effort.
Multistate Tax Commission: An association of state tax commissioners has approved model legislation that mirrors the 2010 Colorado reporting law for out-of-state online sellers. The model bill, which other states may look to pass, mandates that retailers with no physical presence in a given state notify buyers that a tax may be due. It also requires the retailers provide relevant purchasing information to the state on sales where no tax was collected. Most experts believe that should the economic nexus case currently pending before the Supreme Court (South Dakota v. Wayfair) be decided for Wayfair, states will begin passing the MTC model reporting bills in an effort to collect the missing revenue.
Labor Policy
Worker Centers: Ahead of a congressional hearing this week, the U.S. Chamber released a report outlining the evolving role of worker centers in the labor movement. It argued that these groups (non-profits) should be subject to the same rules that govern unions. The U.S. Chamber report and testimony provided in the Committee on Education and the Workforce specifically called on the Labor Department to investigate the role and appropriate level of regulation for groups such as the Restaurant Opportunities Centers United, Fast Food Forward and the Organization United for Respect at Walmart. Over the years, worker centers have evolved from entities primarily focused on providing workers legal assistance into groups that are focused on organizing employees to impact workplace conditions and advocating for political outcomes (traditionally the core functions of unions).
New York: Language mandating sexual harassment training for private employers was included in the recently-enacted state budget. The obligations are similar to pending legislation in New York City that awaits the mayor’s expedited signature to become law. The state law goes into effect July 11 and requires employers to distribute a written sexual harassment policy by Oct. 9 as well as perform annual sexual harassment training for all employees. The state law also prohibits non-disclosure clauses in settlement agreements and mandatory arbitration of sexual harassment claims. The city law would take effect April 1, 2019 and mandates that employers with 15 or more employees provide city-approved sexual harassment prevention training. Details regarding the differences between the two laws still need to be worked out.
Burgerville: Employees at a Portland location overwhelmingly voted to unionize this week. The company is now required to bargain with the International Workers of the World (IWW) on any employment matter at that location. A second location has also filed an election petition and a vote will be held there in the coming weeks.
Health Care
New Jersey: With the ACA’s individual mandate going away in 2019, legislation that would re-establish it in New Jersey has passed both the house and senate and going to the governor’s desk for his expected signature. When signed, New Jersey will become the first state to mandate coverage for individuals since the federal mandate was eliminated.
Trade
Federal: The Trump Administration is likely to extend the May 1 deadline for pending tariffs on steel and aluminum imports from the European Union, Argentina, Australia, Brazil, Canada and Mexico pending the conclusion of ongoing negotiations with each trading partner.
China: Administration officials, led by the Treasury Secretary, are in Beijing this week to discuss the pending tariffs on imports that both countries have threatened. While these discussions are not likely to solve the central disagreements between the two nations, many experts hope that the talks will force a delay of the implementation of the threatened levies.
Activism
May Day: May 1, or International Workers Day, is not as large an event in the U.S. as it is in other countries; however, there will be strikes and protests again this year in certain markets, primarily organized by immigrants’ rights groups. Metros in Wisconsin and California experienced larger actions last year and could see the same level of activity again this year. Operators that were short-staffed last year due to callouts for May Day or the Day Without Immigrants should be prepared for that same dynamic again this year.
Key Takeaways
Legislature Status for Week of 4/30/18
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.
Labor Department: A group of Democratic senators led by Elizabeth Warren is asking the administration for more information about a Labor Department waiver program that allows some employers to pay disabled workers less than the minimum wage.
Arkansas: The attorney general rejected a proposed citizen initiative to raise the state minimum wage to $12/hr by 2022 citing ambiguous language that would have been unclear to voters. The measure, as drafted, would have also allowed localities to raise wage levels higher than the state rate. The individual who submitted the language has promised to re-submit new language. If the new language is approved, proponents would need roughly 67,000 signatures to be validated in order for the initiative to appear on the Nov. ballot.
Colorado: The house passed a bill that would allow localities to increase their minimum wage levels beyond the statewide rate of $10.20/hr. The bill will move to the Republican-majority senate, where it is unlikely to pass.
Vermont: A house committee passed the senate-approved bill to raise the minimum wage to $15/hr. by 2024. The bill has a good chance of passing the house prior to the May 4 adjournment. The governor has stated he plans to veto the bill in its current form, citing the potential economic impact of the increase
New York City: A group of restaurateurs is publicly petitioning the city to allow surcharges on customers’ bills. Operators point toward a steady stream of new mandates that have increased operating costs in the past few years. The city council is unlikely to take up the issue.
Paid Leave
New Hampshire: The push for a paid leave program died in the senate this week following Governor Sununu’s announcement of his opposition to the bill. Due to concerns over cost and long-term viability, the senate voted to study the bill further, effectively killing the legislation.
New Jersey: Governor Murphy has stated he plans to sign the paid leave bill into law on May 2. The bill’s effective date is 180 days after the governor acts, which is now projected to be Oct. 29.
Austin, Texas: City business groups have initiated litigation challenging the validity of the recently-passed paid leave law.
Dallas: Several councilmembers are supporting local activists’ efforts to advance a paid leave ballot initiative identical to the recently-passed law in Austin. Labor-backed groups, such as the Workers Defense Project, are currently collecting signatures. They will need to submit roughly 65,000 valid signatures by June 11 to qualify for the November ballot.
San Antonio: As in Dallas, labor activists are pushing a paid leave ballot initiative modelled off the recently-passed Austin law. Signature gatherers would need to collect roughly 75,000 signatures to place the measure on the ballot.
Equal Pay
New Jersey: Governor Murphy signed into law one of the strongest equal pay measures in the country, which could become a model for other states. The law expands the current standard of “equal pay for equal work” to equal pay for “substantially similar” work. It will go into effect on July 1 and allows employees to sue for up to six years of back pay and treble damages among other provisions.
Wage Theft
Primanti Bros.: The Pittsburgh-based restaurant company settled a wage-violation class action case for $2.1 million. The lawsuit involved 922 tipped workers over a three-year period.
Papa Johns: Several Boston-area franchisees are being sued in a class action claim for alleged violations. The lawsuit claims that the companies failed to properly inform customers that delivery fees would not be paid to delivery drivers.
Taxes
Seattle: A bill was introduced in the city council to establish an “employee hour tax” to fund an expansion of homeless services in the city. The language calls for a levy of $0.26 per hour worked for all employees in the city and would apply to businesses with more than $20 million in taxable gross income in the most recent calendar year. The per hour tax would transition into a 0.7% payroll tax beginning in 2021. In 2009, when current mayor Tim Burgess was a councilmember, the city repealed a per employee tax. It is safe to assume the council will support a measure that taxes large businesses to pay for city services, but it is unclear at this time whether the mayor supports the effort.
Multistate Tax Commission: An association of state tax commissioners has approved model legislation that mirrors the 2010 Colorado reporting law for out-of-state online sellers. The model bill, which other states may look to pass, mandates that retailers with no physical presence in a given state notify buyers that a tax may be due. It also requires the retailers provide relevant purchasing information to the state on sales where no tax was collected. Most experts believe that should the economic nexus case currently pending before the Supreme Court (South Dakota v. Wayfair) be decided for Wayfair, states will begin passing the MTC model reporting bills in an effort to collect the missing revenue.
Labor Policy
Worker Centers: Ahead of a congressional hearing this week, the U.S. Chamber released a report outlining the evolving role of worker centers in the labor movement. It argued that these groups (non-profits) should be subject to the same rules that govern unions. The U.S. Chamber report and testimony provided in the Committee on Education and the Workforce specifically called on the Labor Department to investigate the role and appropriate level of regulation for groups such as the Restaurant Opportunities Centers United, Fast Food Forward and the Organization United for Respect at Walmart. Over the years, worker centers have evolved from entities primarily focused on providing workers legal assistance into groups that are focused on organizing employees to impact workplace conditions and advocating for political outcomes (traditionally the core functions of unions).
New York: Language mandating sexual harassment training for private employers was included in the recently-enacted state budget. The obligations are similar to pending legislation in New York City that awaits the mayor’s expedited signature to become law. The state law goes into effect July 11 and requires employers to distribute a written sexual harassment policy by Oct. 9 as well as perform annual sexual harassment training for all employees. The state law also prohibits non-disclosure clauses in settlement agreements and mandatory arbitration of sexual harassment claims. The city law would take effect April 1, 2019 and mandates that employers with 15 or more employees provide city-approved sexual harassment prevention training. Details regarding the differences between the two laws still need to be worked out.
Burgerville: Employees at a Portland location overwhelmingly voted to unionize this week. The company is now required to bargain with the International Workers of the World (IWW) on any employment matter at that location. A second location has also filed an election petition and a vote will be held there in the coming weeks.
Health Care
New Jersey: With the ACA’s individual mandate going away in 2019, legislation that would re-establish it in New Jersey has passed both the house and senate and going to the governor’s desk for his expected signature. When signed, New Jersey will become the first state to mandate coverage for individuals since the federal mandate was eliminated.
Trade
Federal: The Trump Administration is likely to extend the May 1 deadline for pending tariffs on steel and aluminum imports from the European Union, Argentina, Australia, Brazil, Canada and Mexico pending the conclusion of ongoing negotiations with each trading partner.
China: Administration officials, led by the Treasury Secretary, are in Beijing this week to discuss the pending tariffs on imports that both countries have threatened. While these discussions are not likely to solve the central disagreements between the two nations, many experts hope that the talks will force a delay of the implementation of the threatened levies.
Activism
May Day: May 1, or International Workers Day, is not as large an event in the U.S. as it is in other countries; however, there will be strikes and protests again this year in certain markets, primarily organized by immigrants’ rights groups. Metros in Wisconsin and California experienced larger actions last year and could see the same level of activity again this year. Operators that were short-staffed last year due to callouts for May Day or the Day Without Immigrants should be prepared for that same dynamic again this year.
Key Takeaways
- New York and Washington’s approach to addressing the issue of sexual harassment are likely to become the model for other states. Notably, both states nullified NDAs in settlements as well as mandatory arbitration of sexual harassment claims. Additionally, both are currently formulating model policies and trainings (as is New York City). Employers should be active participants in this process to ensure agencies produce the best product but also to create as much uniformity across jurisdictions as possible.
- Congress is unlikely to take legislative action on worker centers; however, federal agencies could take steps to increase oversight and regulation of these groups. But, since they are facing stacked agendas, it’s unclear where this issue may fall on the priority list. If employers want to see action in this space, they’ll need to convince agencies that’s it’s a top priority.
- In a span of just a few months, efforts to enact paid leave mandates in three major population centers in Texas are well underway. This demonstrates how quickly an issue like paid leave can scale — almost anywhere— and highlights the challenge that entry-level employers continue to face on business model issues.
Legislature Status for Week of 4/30/18
- The United States Senate is in recess this week
- The United States House is in recess this week
- Twenty-three state legislatures are meeting actively this week: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Iowa, Illinois, Kansas, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Oklahoma, Pennsylvania, Rhode Island, South Carolina and Vermont.
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.
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