Regulatory Wrap-Up
This Week’s Top Items:
Delaware – Legislation that would enact a $15/hr minimum wage by 2024 and index it to inflation thereafter is rapidly working its way through the process. An effort toward a lesser increase failed on the last day of last year’s session and adjournment this year is scheduled for June 30.
Nevada – The senate passed legislation to raise the state minimum wage to $12/hr by 2024 for companies that do not offer health insurance. The wage would be $11/hr for companies that do. The house has already passed the companion bill and the governor has expressed his desire to sign it. Another bill authorizing a constitutional amendment to be placed on the 2022 ballot mandating a $12/hr wage by 2024 regardless of benefits is also on the way to the governor for signature.
New Hampshire – In a last ditch effort, the house passed legislation to raise the minimum wage to $12/hr by 2021. The house made changes to the original bill so it must now go back to the senate for another vote. Regardless, the governor has threatened a veto.
Pennsylvania – The governor has renewed his fight for a $15/hr minimum wage by 2025, the elimination of the tip credit, as well as the elimination of local preemption. The proposal, as written, is dead on arrival in the legislature whose Republican leadership has signaled openness to discussing a much lower wage level.
Sonoma, CA – The city council approved final passage of a measure to accelerate the city’s minimum wage increase to $13.50/hr for large businesses and $12.50/hr for small businesses on Jan. 1 of 2020. Thereafter the rate would incrementally increase to $17/hr and $16/hr, respectively by Jan. 1 of 2023.
Walmart – The retailer allowed Senator Bernie Sanders to speak at its annual shareholders meeting this week. Sanders spoke as a proxy for a Walmart worker, calling upon the company to enact a $15/hr starting wage as well as create an employee-designated spot on their Board of Directors. The company used the opportunity to rebut Sanders and make its case as an employer of choice. Additionally, the company’s CEO also called upon Congress to raise the federal minimum wage.
Paid Leave
Connecticut – The house approved senate-passed legislation to mandate 12 weeks of leave to care for a new child, a sick family member or their own illnesses. The bill calls for a .5% payroll tax and covers 95% of wages not to exceed $900/week.
Massachusetts – Efforts to impose a three-month delay on implementation of the state’s new paid family and medical leave program have appeared to fall short and the program will be effective July 1, as scheduled. The state will begin collecting a .63% payroll tax from employers to fund the nearly $800 million program.
Scheduling
Chicago, IL – Negotiations continue on coverage exemptions to the proposed scheduling ordinance. As currently written, the proposal would cover industry employers with at least 30 locations worldwide and employ at least 250 people collectively. A hearing on the bill is scheduled in the coming weeks.
Labor Activism
NLRB – The U.S. Chamber of Commerce is petitioning the National Labor Relations Board (NLRB) to take a closer look at the labor organizing activities of non-profit worker centers. The Chamber has long maintained that these groups operate as unregulated front groups for unions, dodging the operational and disclosure requirements of traditional labor organizations and should be subject to the same requirements if engaged in certain activities.
Little Big Burger – In an interesting turn of events, the burger chain, Little Big Burger, filed an election petition with the NLRB this week for an “ambush election,” and union organizers are crying foul and asked the NLRB to delay the vote. Organizing efforts at that location intensified a few months ago following a successful unionization effort at another Portland-area chain, Burgerville. At one Little Big Burger location workers had called upon the company to recognize the union. The company did not. Instead, it decided to call for an election that includes all locations in Oregon (thirteen total). Presumably, expanding the bargaining unit to thirteen locations provides an advantage to the company while possibly diluting the number of union-allied workers. Unless the NLRB delays the vote, the election will be held next week.
McDonald’s – Gretchen Carlson lent her name to calls for McDonald’s to strengthen its prevention of sexual harassment in the workplace. In an opinion piece penned for the Washington Post, she added credibility to many of the claims made by the Fight for $15 campaign.
Taxes
Maine – Legislation expanding sales tax collection obligations to online sellers is moving quickly through the legislature and is expected to eventually be signed into law. The bill establishes a minimum economic threshold of $100,000 in annual sales for all sellers and mandates that online marketplace providers collect sales taxes on sales made by third-party vendors on their site.
Nevada – Legislation expanding sales tax collection obligations to online sellers passed both chambers and heads to governor for his expected signature. The bill establishes a minimum economic threshold of $100,000 in annual sales for all sellers and mandates that online marketplace providers collect sales taxes on sales made by third-party vendors on their site.
San Francisco, CA – Next November, city voters will decide on a ballot measure to institute a CEO tax with revenues earmarked for a program to open mental health clinics throughout the city. The tax would apply to those companies whose CEO pay is at least 100 times that of the median compensation paid to employees.
Misc.
Alabama – The franchisee “bill of rights” legislation was defeated when the session adjourned for the year
without taking further action. The bill is likely to return next year.
Key Takeaways
• Brands should take note of the way Walmart handled Sen. Bernie Sanders’ appearance at their shareholders meeting. Not only did they allow him a very public stage, they strategically utilized their CEO to thoughtfully and respectfully counter his arguments. In addition, it gave their CEO another opportunity to renew his call for some undetermined increase in the federal minimum wage. At the end of the day, the Senator got his platform. But Walmart got an equal platform to thoughtfully push back without compromising their principles or policies, earning very balanced media coverage. When restaurant brands are faced with these same scenarios, they would be smart to replicate Walmart’s approach to dealing with detractors.
• Brands should take note of the extensive and positive media coverage of Rep. Alexandria Ocasio-Cortez’s celebrity bartending event last weekend with ROC. It was viewed as a huge success in progressive circles – those same progressive circles that will have an outsized impact on the Democratic presidential nominating process. Look for other candidates to do similar type events in order to curry favor with progressives and the labor community.
Legislature Status for Week of 6/10/19
- The United States Senate is in session this week
- The United States House is in session this week
- Fifteen state legislatures are in regular session: AK, CA, DE, ME, MA, MI, NH, NJ, NY, NC, OH, OR, PA, RI, VT
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