Regulatory Wrap-Up: The meaning of 'full time'

Wages

Montgomery County, Md.: The county council will hold a hearing on the $15/hr minimum wage proposal Sept. 26. Several council members have registered their support for the wage increase. The county executive has indicated that he still has objections following his veto of identical legislation last year but this week stated he would support an increase with a longer phase-in period and an expanded small business exemption from 25 to 50 employees.

Seattle, Wash.: Ball State University professors released a study this week analyzing the effects of the local minimum wage increase on restaurant health and hygiene. They found that as the minimum wage increased, violations also increased which researchers stated suggests that restaurants may be operating with less staff, in effect cutting corners to absorb the increase.

Calumet City, Illinois: The mayor wants the city council to reconsider its decision to opt out of Cook County’s $13/hr minimum wage ordinance at its next meeting Sept. 28. The mayor cited an April non-binding, ballot measure to opt-in to the increase that earned over 80% support from local voters. None of the other city alderman have come out in favor of the increase and the legislation is likely to fail.  

Paid Leave

Federal: Democratic lawmakers announced the introduction of a national child care bill that would mandate federal funding for lower and middle class families. The proposal could draw progressive support away from the Trump proposal, championed by advisor Ivanka Trump, that calls for national paid leave and child care tax credits.

California: A bill reached the governor’s desk that would guarantee job security for employees who take time off to care for a new child. The bill applies to companies with between 20 and 49 workers and contains a pilot mediation program before employees could sue employers for violations. Governor Brown is likely to sign the bill into law.

Oregon: The Senate Workforce Committee held an informational hearing on paid family leave Sept. 18 to inform bill drafting for the next legislative session. After becoming the first state in the nation to pass a statewide scheduling mandate this year, many expect the state to follow Washington and California and implement some sort of paid leave law.

Scheduling

Gallup Poll: A recently-released poll finds that many hourly workers are satisfied with flexible schedules associated with service industry jobs such as restaurants, retailers and hotels. The study found that 69% of those surveyed are satisfied with their weekly schedules and 67% say their hours do not cause financial hardship. This study of hourly workers contradicts anecdotal media reports highlighting the need for scheduling mandates that have passed in localities such as San Francisco and Seattle.

Wage Theft

Massachusetts: The Fair Labor Division of the Attorney General’s office released an annual report documenting wage theft and labor enforcement actions across the state. The report notes a total of $8.6 million in restitution and penalties which more than doubles the total from the 2016 fiscal year. The report also indicates that construction and restaurant industries continue to have the highest rate of violations. The state legislature is currently considering a wage theft bill that would increase penalties and enforcement infrastructure.  

Soda Tax

Cook County, Illinois: Retailers, beverage distributors and other stakeholders are working to repeal the recently enacted sugary beverage tax. However, the industry’s effort to force a repeal vote experienced a setback this week. Action was delayed until the next meeting of the council Oct. 10 because the council chair requested a financial assessment of a possible repeal.

Taxes

Connecticut: Policymakers are continuing to discuss a budget deal following months of negotiations. In a positive move for operators, key lawmakers announced the abandonment of an additional 1% “dining tax” on top of the sales tax as part of the funding package. The dining tax would have been optional for cities and townships throughout the state, creating confusion for customers. Legislators are considering increased taxes on hospitals, taxes on cellphones and a cigarette tax increase to close the revenue gap.

South Dakota: The state supreme court ruled against the state and in favor of the plaintiffs - Wayfair, Overstock, and NewEgg - finding that the state cannot force out-of-state sellers to collect sales taxes. The ruling negates a recently-passed state law that called for collection from companies that sell over $100,000 per year into the state which was designed to level the playing field for traditional and online retailers. The ruling sets up an appeal to the United States Supreme Court which could potentially overturn the arcane 1992 physical nexus precedent.  

Joint Employer

U.S. House: Two House Subcommittees held a joint hearing this week on the Save Small Business Act, the industry-supported legislation designed to bring clarity to joint employer liability, in effect limiting labor and employment law liability across affiliated, independent businesses. Democratic members objected to the bill citing the weakening of worker protections, while Republicans highlighted that the bill provides clarity on which entity is responsible for worker protections. The business community supports the standalone bill as it moves through the legislative process and is also pursuing an appropriations strategy to prevent agencies from expanding the joint employer standard. The House also passed the joint employer appropriations rider as part of the overall funding bill earlier this week.

Health Care

U.S. Senate: Senators Susan Collins (R) and Joe Donnelly (D) introduced the Forty Hours is Full Time Act which would which would amend the 30-hour full-time threshold imposed under the Affordable Care Act (ACA) and return to the previous 40-hour standard. This is a reintroduction of a bill from the last two Congresses that has so far failed to become law. Although the margins are closer, and the Republicans are in control of both chambers, the bill would still need to draw seven more Democrat votes in the Senate to have a chance at passage.

Immigration

DACA: President Trump rescinded the Obama-era regulation that protected undocumented immigrants who entered the country as children, known as “Dreamers,” from deportation under certain circumstances. Reports of conversations between the administration and Democratic leadership hint at a possible deal on legislation addressing dreamers and other immigration enforcement issues.

Labor Policy

U.S. Senate: The Senate Appropriations Committee passed a spending bill this week that covers both the Department of Labor and the National Labor Relations Board. If passed into law, the language would decrease spending for the DOL by $61.5 million (1.6%) from last fiscal year and hold the NLRB at current funding levels. The White House had requested a 20% reduction for DOL and 6% reduction for the NLRB.

NAFTA: Canada has requested, as part of the ongoing NAFTA negotiations with the United States and Mexico, that the U.S. federally preempt state right to work laws. The laws, currently in effect in 28 states, allow employees to opt out of union member dues payments. The U.S. is unlikely to comply with this request and such a law would face significant political opposition.

West Virginia: The state’s right to work law continues to move through the legal system following a constitutional challenge brought by labor interests. At a hearing before the state’s supreme court earlier this month, lawyers for the AFL-CIO supported the continuation of a lower court’s preliminary injunction while the state’s attorney general asked the higher court to allow the law to go into effect.

NLRB

NLRB: Outgoing NLRB Chairman Philip Miscimarra said this week that the Board plans to issue as many rulings as possible before his term ends in mid-December. According to Miscimarra, “it's important for the NLRB to issue rulings on 'as many cases as possible' that the departing member has participated in.”

Transportation

CAAP: The ports of Los Angeles and Long Beach closed the open comment period for the latest iteration of the ports clean air action plan (CAAP). The CAAP sets goals of switching to zero-emission cargo-handling equipment by 2030 and trucks by 2035. It also sets targets to cut greenhouse gas emissions to 40% below 1990 levels by 2030, and to 80% by 2050. The port commission is likely to vote on the plan before the end of the year.

Privacy

California: The Broadband Privacy Act that was pending in the state legislature failed to move forward before the close of session last week. The bill would have forced internet service providers to obtain permission from users prior to the collection of personal information. The bill is dead for this year but could resurface in 2018. Supporters are also working to place the California Consumer Privacy Act of 2018 on the ballot. The initiative would allow a customer to request what personal information a business has collected, how the business is using the information and direct businesses to not use that information.

Immigration

California: Governor Brown (D) signed legislation establishing California as a “sanctuary state”. Among other provisions, the law limits communication between state and local law enforcement and federal officials regarding the immigration status of undocumented residents. It would also prevent law enforcement from questioning and holding people on immigration violations. While the direct impact on restaurant and retail operators is minimal, it is notable to have a state with the 8th largest economy in the world in direct conflict with the position of the federal government.

Energy

California: As the first year of the two-year state session drew to a close last week, renewable energy legislation failed to advance to the governor’s desk. The bill would have amended the existing renewables portfolio standard by mandating that utilities achieve 100% of the state’s energy come from clean sources by 2045. Current law establishes a 50% target by 2030.

Innovation

U.S. Senate: The Senate Commerce Committee held a hearing to review a discussion draft of legislation that would create a framework for regulations for testing and deployment of self-driving cars and trucks. A center point of discussion was whether to regulate cars and trucks separately.

Key Takeaways

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  The South Dakota economic nexus law is in direct contradiction with standing U.S. Supreme Court (SCOTUS) precedent regarding how retailers without a physical presence in a state trigger a sales tax collection obligation. Now that the state supreme court has ruled in favor of the online retailers, the case is on track to go before the SCOTUS as early as next year. Advocates for a change in the law, including states and traditional retailers, will file friend of the court briefs in an attempt to convince SCOTUS to hear the case. Should the Justices concur, the case has the potential to overturn the physical presence standard that has been in place for decades. Despite Congressional purview over interstate commerce, the U.S. House has repeatedly failed to act on this issue even with bipartisan support/interest in the U.S. Senate. The threat of a potential SCOTUS ruling could alter that dynamic and create a window for legislation in early to mid 2018.  


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  Historically, the minimum wage debate has been fought on political, not economic terms and advocates and their political allies were dismissive of any negative economic consequences of mandated wage hikes. However, the recent studies coming out of Seattle, St. Louis and Montgomery County, MD are conclusive in that there are significant impacts. As a result, the current debates in city after city are now being fought out on economic terms - a much stronger position for operators. The Ball State University study released this week linking minimum wage increases to reductions in staffing, resulting in more health code violations is significant.  While initially appearing to be damaging, it actually reinforces the narrative that there are real consequences to these mandates - potential reductions in hours, reductions in staffing and quality of service. These are debates that operators can potentially win.


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  The fledgling alliance between President Trump, Senate Minority Leader Schumer and House Minority Leader Pelosi, while unusual and likely very temporary, could yield impacts important to operators. A centrist approach to the DACA / immigration issue could help to stabilize workforces, a national mandate on paid leave would likely be much more operator-friendly than those that most cities and states are debating, and a renewed push on infrastructure could boost the economy and raise the buying power of consumers. On those issues alone, the business community could find itself in the middle of a battle between Trump and the Democrats and the Republican leadership in Congress.

Legislature Status for Week of 9/18/17

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  The United States Senate is in session this week Monday to Wednesday.


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  The United States House is in recess this week.


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  Nine state legislatures are currently in annual session: Illinois, Massachusetts, Michigan, New Jersey, North Carolina, New York, Ohio, Pennsylvania and Wisconsin.

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