Regulatory Wrap-Up: Overtime rule struck down
Wages
Overtime: A federal district court judge officially struck down the Obama-era overtime rule which would have raised the overtime threshold to $47,476/yr. The same judge issued a stay of the rule last December. The final decision was based on the argument that job responsibilities, and not just salary levels alone, should have been considered in setting the threshold.
Arizona: A Maricopa County Superior Court judge ruled against the state, nullifying the Arizona wage and benefits preemption law on constitutional grounds. The 2016 preemption law prevented localities from passing minimum wage and employee benefit laws that differ from the statewide rules. The judge found that the new preemption law stood in conflict with an existing law that requires 3/4 majority vote in the legislature to overturn a voter-approved initiative, and the recently passed preemption law failed to meet that standard.
Missouri: Several large city mayors and county executives have announced their joint support for a potential ballot initiative to raise the state’s minimum wage to $12/hr by 2023. St. Louis Mayor Lyda Krewson, Kansas City Mayor Sly James, Columbia Mayor Brian Treece, and St. Louis County Executive Steve Stenger have all made recent announcements in support. The group advocating for the increase, “Raise up Missouri”, needs to collect 100,000 signatures by May 2018 in order to place the question on the November ballot.
Paid Leave
Federal: Some media outlets are reporting that a Republican-sponsored national paid leave measure could be introduced soon after Congress returns from August recess. The bill would likely offer a safe harbor from state and local requirements to employers that voluntarily offer workers a certain amount of paid leave. Despite this movement, a national bill still faces a very uphill climb in Congress.
Pay Equity
Illinois: The governor vetoed legislation that would have banned employers from asking job applicants questions regarding their salary history or from considering past salaries as a factor in hiring decisions or salary offers.
Labor Policy
EEOC: The Trump Administration blocked the Equal Employment Opportunity Commission’s updated requirements regarding employers submission of pay data. The annual EEO-1 form was updated late in the Obama administration to include employee pay data as well as ethnicity, race and gender information. Employers with 100 or more employees are still required to submit the EEO-1 form by March 31, 2018 but are no longer required to add the pay data. This is a different regulation than the SEC’s CEO-Pay ratio data obligations for publicly-traded companies that has yet to be addressed by the administration.
Uber: The Ninth Circuit Court granted the U.S. Chamber of Commerce a temporary emergency injunction blocking a Seattle ordinance allowing for-hire drivers at companies such as Uber and Lyft to unionize. The court will continue to consider a motion to stay the case, pending an appeal of a district court order dismissing the suit.
Immigration
H-1B: Immigration attorneys are reporting an increase in scrutiny of H-1B visas from the Trump administration. The visa program requires approval from the federal government and attorneys are noticing an increase in government requests for evidence focused on the entry-level wages of many of the H-1B applicant jobs.
Taxes
Wisconsin: A senate tax committee heard heated testimony last week on several pieces of legislation seeking to establish statewide procedures for assessing property taxes. At issue are longstanding disputes between large format retail chains and municipalities over how their stores are assessed value for tax purposes. The legislation being considered makes several changes to the state property tax system including requiring property to be assessed at "it's highest and best use."
South Dakota: A state Supreme Court judge, during oral arguments in the landmark online sales tax case, suggested that the U.S. Supreme Court should revisit the issue. During the proceedings, the state acknowledged that the economic nexus law passed in 2016 is in violation of the 1992 Quill decision. Attorney General Marty Jackley asked the state’s highest court to affirm the lower court’s grant of summary judgement and open a path to the U.S. Supreme Court.
Privacy
FCC: The Retail Industry Leaders Association, along with the U.S. Chamber of Commerce and others, announced support for the Federal Communications Commission’s plan to create a database of phone numbers that have been reassigned to new consumers. Retailers and other businesses have faced a growing legal threat from a cottage industry of attorneys representing consumers who have been contacted by a business without consent. This database, likely to include a user fee of some sort, could provide a safe harbor period once a number has been reassigned, greatly reducing the likelihood of errors.
Trade
NAFTA: As the second round of NAFTA negotiations between the U.S., Mexico and Canada conclude in Mexico City this week, contentious issues have yet to be resolved. Most notably, reports indicate the rules of origin for automotive manufacturing are presenting serious challenges to all parties. For retailers, third country dumping and seasonal produce issues are of primary concern, although the talks have not revealed any specific public details on those topics. Most experts expect the specific language and other details will be revealed and discussed during the next round, which will be held in Canada later this month.
Joint Employer
U.S. House: A House committee has tentatively scheduled a hearing on the issue of joint employment for the second week in September. The hearing would be the first step in the legislative process for industry-supported legislation designed to limit labor and employment law liability for affiliated businesses. The bill will likely move through the republican-dominated committee but it still has a long way to go. There is currently no companion measure in the Senate, and eight Democrats would need to support the bill to avoid filibuster rules in the upper chamber. Business advocates continue working to marshal enough bipartisan support in the Senate.
Key Takeaways
With action both at the DOL on the overtime issue as well as the EEOC on pay data, the regulatory process with regard to important workforce issues is progressing. Despite significant inaction in Congress, many of our key issues are in play at the agency level. Companies need to not only stay close to this process, but look for opportunities to engage directly with regulators to bring real world operational expertise and perspective to their decision making.
Over the Labor Day weekend, the tone and tenor of Labor Day rallies and other forums was somewhat muted as national stories such as hurricane Harvey maintained center stage. These events that can also be a platform to elevate the dialogue on workforce issues important to operators like minimum wage, pay equity, wage stagnation, paid leave and health care. There was more local and regional coverage that focused on labor events in certain parts of the country but overall, the national impact was minimal.
It is important for all operators to watch the ballot process underway in Missouri as it could be an approach replicated by the labor community nationwide. The effort there for a more modest increase (to $12/hr) stretched over a longer time span (effective 2023) provides an easier road to passage for labor proponents and conversely, makes business community opposition not only harder but additionally, much more politically precarious.
Legislature Status for Week of 9/5/17
The United States Senate is in session as of Sept 5
The United States House is in session as of Sept 5
Ten state legislatures are currently in regular session: California, Illinois, Massachusetts, Michigan, New Jersey, North Carolina, New York, Ohio, Pennsylvania and Wisconsin
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