Regulatory Wrap-Up: More action on wages, paid leave

Wages

Labor Department: The Labor Department appealed a federal court decision to block the Obama Administration's overtime rule which was finalized in May 2016. The Trump Administration has indicated it plans to rewrite the suspended rule and the filing of this appeal is an effort to ensure that the Labor Secretary retains the authority to develop a new overtime rule.

Illinois: Lawmakers announced they do not have the votes to override the governor’s veto of the $15/hr minimum wage bill that was considered earlier this session. Supporters indicated they may pursue compromise legislation in the future but did not share specifics at this stage.

Facebook: The social media company is facing a class-action lawsuit in federal court alleging purposeful misclassification of employees in an attempt to avoid paying overtime.

Paid Leave

U.S. House: House Republicans introduced legislation that would offer employers with qualifying programs a safe harbor from the requirements of state and local paid leave mandates. The proposal is modeled off discussion drafts brought forward by business groups such as the Society of Human Resource Management and the HR Policy Association. The proposal would apply to full and part time workers.

EEOC: The Equal Employment Opportunity Commission sued beauty product manufacturer Estee Lauder for offering different levels of family leave benefits based on gender. At issue in the case is a discrepancy in benefits between maternity and paternity policies.

Wage Theft

Michigan: Legislation to increase penalties and enforcement for wage theft will be introduced in the coming weeks. Under the language, employees would qualify for up to three times the amount found to be owed, which is up from double under current law. The bill is unlikely to advance in the Republican-controlled legislature, however, the conversation may present reputation challenges for some employers.

Westchester County, N.Y.: A bill to strengthen enforcement of wage theft in home improvement industries with a focus on day laborers was introduced last week.

Smokey Bones: A judge approved a class action lawsuit, consisting of servers and bartenders from several states, alleging that the restaurant chain repeatedly violated the FLSA tip credit provision by requiring wait staff to perform tasks not related to their tipped work, or “side work,” among other issues.

Labor Policy

Federal: National Democrats announced an expansion of their “better deal” platform designed to aid union organizing efforts. It includes a federal ban on right-to-work laws. While the platform has little chance to advance in the Republican-controlled U.S. Congress, it demonstrates the Democrat’s allegiance to the labor community, despite many union households supporting President Trump’s populist message.

Illinois: The house failed to garner the necessary votes to override a gubernatorial veto of legislation that would have banned localities from implementing right-to-work legislation. Localities, for the time being, will be able to enact right-to-work measures that would prevent unions from mandating dues. The override vote lost by a single vote and the effort could resurface following negotiations by the house speaker.

New York: Every two decades, a constitutional convention is automatically proposed on the statewide ballot to explore proposed changes to the state’s constitution. A successful convention could alter the basic rules of government for the state which unions currently view as very favorable. As a result, labor leaders in the state are leading efforts to defeat a pending measure that will appear on the Nov. 7 ballot. The measure is likely to fail regardless.

Taxes

U.S. House: Republican leaders unveiled their long-awaited tax reform legislation, The Tax Cuts and Jobs Act. The bill mostly follows the blueprint released earlier this year, adding additional details. Generally the legislation cuts the corporate tax rate to 20 percent as well as applies a 25 percent tax rate for net income distributed by a passthrough entity. Of note to operators, the Work Opportunity Tax Credit (WOTC) would be repealed in 2018 under the legislation as written. The House Ways and Means Committee will take up the bill on Nov. 6.

Trade

Commerce Department: The Commerce Department issued final antidumping and countervailing duties on imports of Canadian lumber. The duties would only go into effect if the U.S. International Trade Commission pending a final determination that U.S. producers are injured by Canadian Imports. That decision is expected in mid to late Dec. The dispute could have ramifications in the ongoing NAFTA negotiations between the two countries and Mexico.

Cybersecurity

U.S. House: The House Financial Services Committee is drafting data breach notification legislation in the wake of the Equifax breach. Attempts at a federal breach notification bill, which would preempt dozens of state level laws, have failed to gain enough support in previous Congresses. The draft currently under review is based on negotiated language between the Retail Industry Leaders Association and the Financial Services Roundtable, indicating the potential for wider support than past versions.

FTC: A wide range of business interests, including retail representatives, submitted public comments urging the Federal Trade Commission to update its enforcement practices around consumer injury associated with privacy and data breaches. Business groups noted the need for the FTC to focus enforcement actions on instances where concrete consumer injury has occurred. In the past, the commission has brought action in cases where a data breach could cause “theoretical” injury to consumers, a standard that is increasingly difficult to define and overly broad. The comment period is in advance of a Dec. 12 FTC public workshop on consumer data and privacy.

Innovation

Drones: Following President Trump’s recent directive, the Federal Aviation Administration (FAA) officially launched a three-year pilot program to allow state and local governments to expand experimental drone operations. Localities that participate in the pilot programs will partner with established industry brands to expand drone operations beyond the limitations of current law such as nighttime operations, flights over populated areas and flights beyond line of sight.

Key Takeaways

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  While operators should be encouraged by the introduction of the tax package this week, enthusiasm should be tempered. The tax reform legislation has a long road to travel before earning enough support to pass both chambers. Every special interest group, including those representing entry-level employers, will be working hard to preserve existing legacy tax credits and exemptions, making necessary compromise exceedingly difficult.  Also, the bill will have to go through several revisions in order to ensure that it does not increase the budget deficit - which will be difficult but necessary in that it’s a key stipulation under the rules that allow passage with a 51-vote majority in the Senate.


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  This week’s elections in Virginia, New Jersey and numerous municipalities across the country will be a clarifying moment on the mood of the country and the perceived strength or weakness of President Trump. Pay particular attention to which side “over-performs” relative to traditional norms as an indicator of whose base is particularly energized going into 2018.

Legislature Status for Week of 11/6/17

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  The United States Senate is in session this week


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  The United States House is in session this week


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  The following state legislatures are in session year round: Illinois, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and Wisconsin.


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  The following states are currently in special session: Alaska and Oklahoma.

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