Regulatory Wrap-Up: Minimum wage battles abound
Wages
Colorado: House Democrats passed a bill out of committee that would allow localities to increase their minimum wage levels beyond the statewide rate of $10.20/hr. The bill will move to the house floor but will likely fail in the Republican-majority senate.
Connecticut: The $15/hr minimum wage bill that moved out of the joint labor committee earlier this year would cost the state nearly $50 million (increased labor costs for state workers and contractors) according to a cost analysis. Despite that price tag, the bill passed the joint appropriations committee by a 27-24 vote. The bill now moves to the house floor; however, the cost analysis will certainly embolden senate Republicans who are opposed to the increase, as the state is currently operating with a $200 million budget deficit for the year.
Minnesota: A house committee reviewed a bill that would establish a server wage pegged at the current minimum wage of $9.65/hr. The credit would only apply to those who make an average of $14/hr once tips are counted or $12/hr if they work at smaller restaurants and bars. Republicans are pushing the proposal (Minnesota is one of seven states with no tip credit) in response to restaurants who are concerned about the impact of Minneapolis’s $15/hr increase and similar action pending in St. Paul.
New York: The first of seven planned regional public hearings that will evaluate the elimination of the state’s tip credit is slated for today, April 20, in Farmingdale, Long Island. The series of hearings are scheduled to conclude in late June and regulations are expected to follow.
North Dakota: Language to raise the state’s minimum wage to $15/hr by 2021 was certified for the November ballot by the secretary of state. In order to appear on the ballot, advocates need to collect roughly 13,000 signatures before June 9.
Rhode Island: A house committee recommended that legislation to increase the minimum wage to $15/hr by 2022 be held for further study, potentially stalling the bill for the year.
Wisconsin: A bill that would prevent localities from legislating on employment issues such as wages, benefits and scheduling was signed into law by the governor.
Paid Leave
Federal: The Urban Institute, often thought of as a left-leaning organization, released a study this week finding that Sen. Rubio and Ivanka Trump’s approach to paid leave was not cost-neutral and would fundamentally undermine Social Security. The Rubio plan would allow for new parents to receive Social Security payments, delaying when they will receive those benefits in retirement.
IRS: The Internal Revenue Service issued a guidance document for employers regarding the paid family and medical leave tax credit that passed in the 2017 tax reform package. The tax credit allows employers to claim a general business credit up to 25% of employee wages when the employee takes leave. The guidance document clarifies what type of leave is included, when the credit can apply and how to calculate the credit.
Colorado: The house passed a paid leave bill that would establish an employee-funded, state-run family medical leave program. In recent years, similar bills have met stiff opposition in the Republican-controlled senate and as a result, this bill is not expected to pass.
Connecticut: Language to expand the state’s paid leave program narrowly passed the joint finance committee over Republican objections to the lack of start-up funding for the proposed expansion. The bill would require employees pay a half percent of their total income into a fund that would allow them to earn up to $1,000/wk for up to twelve weeks. The proposal would also extend coverage to businesses with at least two employees as opposed to the current 75 employee threshold. The bill moves to the house floor and is expected to face resistance in the senate which is evenly split between Republicans and Democrats.
New Hampshire: Governor Sununu announced his opposition to the house-passed paid leave legislation before it was reviewed in a senate committee this week. The committee recommended the legislature study the bill further. Democrats offered amendments that attempted to address the Governor’s stated concerns around the opt-out process for individuals. The amendments ultimately failed to pass. The full senate will still take up the bill, but it is expected to face opposition from the Republican majority unless the Governor clarifies his position.
Portland, Maine: The mayor has proposed a mandatory paid sick leave ordinance for all city businesses. The proposal would require employers provide up to 6 days of paid time off per year for their own needs or to care for family members. The proposal will have a public hearing April 24.
Wage Theft
Chicago: Following the demands of Arise Chicago, a local worker center, a group of 35 aldermen introduced legislation to create the Chicago Office of Labor Standards. The proposed agency would be tasked with expanding the city’s ability to enforce labor laws. The sponsor noted that fines paid by employers would cover the estimated $1.5 million in start up costs for the agency. The mayor has not yet taken a position on the ordinance.
Labor Policy
New York City: The city council passed the New York City Sexual Harassment Act, which is a slate of bills mandating that employers with fifteen or more employees provide city-approved sexual harassment prevention training. The bill moves to the mayor’s desk for his expected signature.
Taxes
Hawaii: Two bills dealing with expanding the state’s definition of an in-state retailer subject to sales tax collection laws have moved to conference between the house and senate. It is unclear at this stage what specific language will emerge from the negotiations.
Illinois: A bill that would subject retailers with more than $150,000 in annual sales or over 200 sales into the state to sales tax collection requirements passed the senate. The language is modeled after the South Dakota law currently before the U.S. Supreme Court.
Trade
NAFTA: Following eight months of negotiations, trade negotiators from the three countries announced their intent to produce an agreement in principle by May 4. The U.S. and Mexico are politically motivated to conclude the discussions prior to the U.S. midterms in November and the Mexican presidential election in July. Trade ministers are planning to hold continuous discussions leading up to the self-imposed deadline and reports continue to identify automobile rules of origin as the major sticking point.
Immigration
Florida: A potential constitutional amendment that would have mandated employer participation in the federal E-Verify work authorization program failed to receive approval from the state’s constitution revision commission and will not appear on the November ballot.
Tennessee: Following the recent ICE raid of a meatpacking plant in Grainger County that earned national attention, Republicans have filed a bill to explicitly ban sanctuary cities. In addition, a Democratic lawmaker proposed an amendment to the bill that says the employment of 50 or more undocumented immigrants would be a felony offense, triggering an automatic investigation into any wage theft claims or other labor violations. With the state legislative session winding down, it’s unclear how much support the bill or the amendment have in either chamber.
Soda Tax
Palo Alto, Calif.: With half of the city council voicing public support for a local ballot initiative, the city is moving quickly toward drafting a sweetened beverage tax ballot measure. Modelled off of the Berkeley law, authors plan to apply the tax at the distributor level. Other details, including the tax rate, are still under discussion.
Study: A Drexel University study was released this week that found the Philadelphia soda tax was having the desired effect - reducing the consumption of sweetened beverages and increasing the consumption of water. This study follows a similar analysis of the Berkeley tax which came to the same conclusion.
Key Takeaways
Legislature Status for Week of 4/23/18
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.
Colorado: House Democrats passed a bill out of committee that would allow localities to increase their minimum wage levels beyond the statewide rate of $10.20/hr. The bill will move to the house floor but will likely fail in the Republican-majority senate.
Connecticut: The $15/hr minimum wage bill that moved out of the joint labor committee earlier this year would cost the state nearly $50 million (increased labor costs for state workers and contractors) according to a cost analysis. Despite that price tag, the bill passed the joint appropriations committee by a 27-24 vote. The bill now moves to the house floor; however, the cost analysis will certainly embolden senate Republicans who are opposed to the increase, as the state is currently operating with a $200 million budget deficit for the year.
Minnesota: A house committee reviewed a bill that would establish a server wage pegged at the current minimum wage of $9.65/hr. The credit would only apply to those who make an average of $14/hr once tips are counted or $12/hr if they work at smaller restaurants and bars. Republicans are pushing the proposal (Minnesota is one of seven states with no tip credit) in response to restaurants who are concerned about the impact of Minneapolis’s $15/hr increase and similar action pending in St. Paul.
New York: The first of seven planned regional public hearings that will evaluate the elimination of the state’s tip credit is slated for today, April 20, in Farmingdale, Long Island. The series of hearings are scheduled to conclude in late June and regulations are expected to follow.
North Dakota: Language to raise the state’s minimum wage to $15/hr by 2021 was certified for the November ballot by the secretary of state. In order to appear on the ballot, advocates need to collect roughly 13,000 signatures before June 9.
Rhode Island: A house committee recommended that legislation to increase the minimum wage to $15/hr by 2022 be held for further study, potentially stalling the bill for the year.
Wisconsin: A bill that would prevent localities from legislating on employment issues such as wages, benefits and scheduling was signed into law by the governor.
Paid Leave
Federal: The Urban Institute, often thought of as a left-leaning organization, released a study this week finding that Sen. Rubio and Ivanka Trump’s approach to paid leave was not cost-neutral and would fundamentally undermine Social Security. The Rubio plan would allow for new parents to receive Social Security payments, delaying when they will receive those benefits in retirement.
IRS: The Internal Revenue Service issued a guidance document for employers regarding the paid family and medical leave tax credit that passed in the 2017 tax reform package. The tax credit allows employers to claim a general business credit up to 25% of employee wages when the employee takes leave. The guidance document clarifies what type of leave is included, when the credit can apply and how to calculate the credit.
Colorado: The house passed a paid leave bill that would establish an employee-funded, state-run family medical leave program. In recent years, similar bills have met stiff opposition in the Republican-controlled senate and as a result, this bill is not expected to pass.
Connecticut: Language to expand the state’s paid leave program narrowly passed the joint finance committee over Republican objections to the lack of start-up funding for the proposed expansion. The bill would require employees pay a half percent of their total income into a fund that would allow them to earn up to $1,000/wk for up to twelve weeks. The proposal would also extend coverage to businesses with at least two employees as opposed to the current 75 employee threshold. The bill moves to the house floor and is expected to face resistance in the senate which is evenly split between Republicans and Democrats.
New Hampshire: Governor Sununu announced his opposition to the house-passed paid leave legislation before it was reviewed in a senate committee this week. The committee recommended the legislature study the bill further. Democrats offered amendments that attempted to address the Governor’s stated concerns around the opt-out process for individuals. The amendments ultimately failed to pass. The full senate will still take up the bill, but it is expected to face opposition from the Republican majority unless the Governor clarifies his position.
Portland, Maine: The mayor has proposed a mandatory paid sick leave ordinance for all city businesses. The proposal would require employers provide up to 6 days of paid time off per year for their own needs or to care for family members. The proposal will have a public hearing April 24.
Wage Theft
Chicago: Following the demands of Arise Chicago, a local worker center, a group of 35 aldermen introduced legislation to create the Chicago Office of Labor Standards. The proposed agency would be tasked with expanding the city’s ability to enforce labor laws. The sponsor noted that fines paid by employers would cover the estimated $1.5 million in start up costs for the agency. The mayor has not yet taken a position on the ordinance.
Labor Policy
New York City: The city council passed the New York City Sexual Harassment Act, which is a slate of bills mandating that employers with fifteen or more employees provide city-approved sexual harassment prevention training. The bill moves to the mayor’s desk for his expected signature.
Taxes
Hawaii: Two bills dealing with expanding the state’s definition of an in-state retailer subject to sales tax collection laws have moved to conference between the house and senate. It is unclear at this stage what specific language will emerge from the negotiations.
Illinois: A bill that would subject retailers with more than $150,000 in annual sales or over 200 sales into the state to sales tax collection requirements passed the senate. The language is modeled after the South Dakota law currently before the U.S. Supreme Court.
Trade
NAFTA: Following eight months of negotiations, trade negotiators from the three countries announced their intent to produce an agreement in principle by May 4. The U.S. and Mexico are politically motivated to conclude the discussions prior to the U.S. midterms in November and the Mexican presidential election in July. Trade ministers are planning to hold continuous discussions leading up to the self-imposed deadline and reports continue to identify automobile rules of origin as the major sticking point.
Immigration
Florida: A potential constitutional amendment that would have mandated employer participation in the federal E-Verify work authorization program failed to receive approval from the state’s constitution revision commission and will not appear on the November ballot.
Tennessee: Following the recent ICE raid of a meatpacking plant in Grainger County that earned national attention, Republicans have filed a bill to explicitly ban sanctuary cities. In addition, a Democratic lawmaker proposed an amendment to the bill that says the employment of 50 or more undocumented immigrants would be a felony offense, triggering an automatic investigation into any wage theft claims or other labor violations. With the state legislative session winding down, it’s unclear how much support the bill or the amendment have in either chamber.
Soda Tax
Palo Alto, Calif.: With half of the city council voicing public support for a local ballot initiative, the city is moving quickly toward drafting a sweetened beverage tax ballot measure. Modelled off of the Berkeley law, authors plan to apply the tax at the distributor level. Other details, including the tax rate, are still under discussion.
Study: A Drexel University study was released this week that found the Philadelphia soda tax was having the desired effect - reducing the consumption of sweetened beverages and increasing the consumption of water. This study follows a similar analysis of the Berkeley tax which came to the same conclusion.
Key Takeaways
- This week, the Urban Institute, a left-leaning organization, condemned Senator Rubio and Ivanka Trump’s approach to tapping Social Security benefits to pay for paid parental leave. Meanwhile, the conservative think tank AEI on its Ideas blog expanded its boosterism for the Rubio plan to include the broader concept of portable benefits. The issue of paid leave and portable benefits and its linkage to the emerging modern workplace is disrupting traditional political fault lines around employee benefits. As the industry continues to participate in a national conversation on leave, it’s important that operators understand that our traditional political allies and opponents may be in different places on this and other emerging economy issues.
- The actions of Starbucks CEO Kevin Johnson this week in response to an incident in a Philadelphia restaurant demonstrate how quickly a local story can jump into the national news but it also illustrates how quickly a company’s reaction can become the story. Fortunately for Starbucks, the news coverage of their response has been overwhelmingly favorable. Brands and operators need to be cognizant that the Starbucks approach has set a defacto new bar and other companies will be judged against that if and when a similar circumstance happens in their store or restaurant. Every brand’s response to these types of events will be different depending on the circumstances and other internal factors and we are not advocating any particular strategy; however, companies should recognize their response will now be measured against that of Starbucks.
Legislature Status for Week of 4/23/18
- The United States Senate is in session this week
- The United States House is in session this week
- Twenty-five 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, Tennessee, Vermont and Wisconsin.
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.