Regulatory Wrap-Up: Wages, paid leave take center stage
Wages
Connecticut: Legislation that increases the minimum wage to $15 per hour by 2021 passed its first committee along with a slate of bills supported by Democrats and the governor, including salary history, pay equity and an expansion of the state’s paid leave program. The package of bills faces an uphill battle due to the senate’s even partisan split between Republicans and Democrats.
Delaware: A bill to increase the minimum wage to $9.25 per hour by 2020 failed in the senate by one vote. The sponsor of the bill indicated that the issue could be revisited before the session is scheduled to adjourn in late June.
Maine: Legislation to scale back the scheduled increases in the state’s minimum wage law passed by ballot initiative in 2016 did not pass its first full body vote in the house. It will still move to the Senate and could be amended to attract more Democrat votes. The proposal would reduce the 2018 wage from $10 per hour to $9.50 per hour and allow for increases to $11 per hour by 2021 instead of the previously approved $12 per hour It would also eliminate the cost-of-living adjustment and establish a training wage.
Rhode Island: Legislation to increase the tipped wage from the current $3.89 per hour to two-thirds of the statewide minimum was heard in committee along with other minimum wage bills. The sponsor of the legislation focused her testimony on the linkage of tipping and sexual harassment, noting that increasing “the tipped minimum…will help give waitresses the confidence that they need to be able to stand up for themselves.” Since a law was passed just last year to raise the wage to $10.50 per hour by 2019, it is unclear at this stage if the legislature will pass another increase this cycle.
Wisconsin: A bill to prevent localities from enacting laws relating to employee wages, benefits and scheduling, among other issues, passed both the house and the senate. The governor is expected to sign the bill into law.
Anaheim, CA: In a move aimed at gaining leverage in ongoing negotiations, a labor union representing Anaheim hospitality workers, including Disneyland and area hotels, announced plans to pursue a local ballot initiative that would raise the minimum wage for hotels that receive city tax subsidies. The wage increase would start at $15 per hour and rise to $18 per hour by 2022 with future increases tied to cost of living. The language has yet to qualify for the November ballot.
Paid Leave
Connecticut: Family leave legislation that would provide up to 12 weeks of leave at 100% salary with a $1,000 per week cap passed its first committee along with a slate of bills supported by Democrats and the governor that includes a wage increase, a ban on salary history questions, and pay equity. The package of bills faces an uphill battle due to the senate’s even partisan split between Republicans and Democrats.
Hawaii: Two paid leave bills continue to make their way through the process. One senate-passed bill requires the state labor department to establish a paid leave program for all workers by 2023. The other house-passed bill requires employers with fewer than fifty workers to provide paid sick leave but exempts those who offer leave policies at or above the proposed mandate. Both bills have passed one chamber and a first committee hearing in the other chamber. It remains unclear at this stage which, if any, bill will advance.
Maryland: Legislation passed the senate establishing an income tax credit of up to $1,000 per employee for businesses with fewer than 25 employees that offer paid leave. It is intended to provide relief for small businesses from the cost of the newly-enacted paid leave law.
New Hampshire: The house passed legislation to create a state-run paid family and medical leave insurance program. The program would offer up to six weeks of leave insurance for all employees and would be funded by employee contributions. Employees would have the option to individually opt-out of the program, and employers would be obligated to remit the withholdings to the state. The governor has been generally supportive of the concept of a paid leave program but has expressed substantial concerns with this legislation as passed. His office advocated for a failed amendment during the house process that would have gutted the current language and replaced it with a mandate that employers offer access to private plans. The bill now moves to the senate where that debate will likely be renewed.
New Jersey: Favorable amendments to the paid leave bill moving in the house have reportedly been agreed to by senate leaders as well signaling that the bill will likely move forward with little opposition. The house legislation now preempts local leave ordinances, allows for black-out dates as set by employers, has an exemption for seasonal workers, reduces the maximum hours of leave from 72 to 40 hours and contains a 180-day implementation delay once the bill is signed into law. The bill passed its first house committee and still needs to move through both the full house and the senate.
Scheduling
Connecticut: The Committee on Children voted down a bill prohibiting the use of “on call” scheduling which would have mandated that all employers provide no less than 24 hours notice of shift schedules.
Labor Policy
Hawaii: A house-passed bill that would direct state agencies to publish an annual report of the fifty employers in the state with the highest number of employees receiving public assistance passed through two committees in the senate. All votes so far have been unanimous indicating likely passage.
Idaho: The governor signed into law a bill codifying that neither a franchisee nor a franchisee’s employees shall be considered employees of the franchisor.
Virginia: The governor vetoed a bill codifying that neither a franchisee nor a franchisee’s employees shall be considered employees of the franchisor.
Washington: Governor Inslee signed several bills into law dealing with employer policies around sexual harassment, all of which will take effect in June. One prohibits non-disclosure agreements that prevent disclosure of harassment or assault. Another voids employment contracts that do not explicitly protect an employee’s right to file sexual harassment or assault complaints with authorities. And yet another law prevents non-disclosure agreements from inhibiting the gathering of information or witness testimony related to sexual harassment or assault.
NLRB: Pending approval from an Administrative Law Judge, the NLRB settled a collection of cases that charged McDonald’s USA and its franchisees violated the rights of workers and asserted that McDonald’s USA and its franchisees were joint employers. The settlement, if approved, will compensate workers and absolve both franchisor and franchisees of wrongdoing. The SEIU and its political allies on Capitol Hill derided the settlement agreement even before details were made public. Establishing joint employer status between franchisor and franchisees was central to the SEIU’s corporate campaign against McDonald’s and the settlement, while not unexpected, is a setback.
Trade
China: Following the March 8 signing of executive orders establishing steep tariffs on global imports of steel and aluminum, President Trump signed new orders that would impose tariffs on up to $60 billion of products imported from China. Reports indicate that Chinese product categories subject to the tariffs will be focused in the technology sector. A formal list is expected within fifteen days, followed by a thirty-day comment period. Less than 24 hours later, China responded by publishing a list of 128 products from the United States upon which it plans to raise tariffs. The majority of products on China’s list are U.S. agriculture exports. Trump also signaled further action against China in the coming weeks but did not get into specifics.
European Union: As global tensions escalate after several announcements from the Trump Administration regarding planned import tariffs from the world’s largest economy, some U.S. allies were granted temporary relief. The administration announced that the European Union, Australia, Argentina, Brazil, South Korea, Canada and Mexico would all receive initial exemptions from the announced steel and aluminum tariffs.
KORUS: The South Korean government announced a deal with U.S. trade negotiators that essentially keeps the bilateral trade agreement in place following President Trump’s effort to renegotiate the arrangement. U.S. automakers doubled the amount of vehicles that can be exempted from South Korean auto-safety regulations to 50,000 imports per year and South Korea was granted an exemption from the pending U.S. steel tariffs.
NAFTA: U.S. Trade Representative Lighthizer requested that the three NAFTA countries come to an agreement in principle on updates to the trade deal by March 31. An extensive legal review would follow that likely leading up to the expiration of the steel tariff exemption the United States recently granted Mexico and Canada which is set to expire May 1.
Privacy
Alabama: A bill that requires companies that are victims of a data breach to notify their consumers within 45 days passed the senate unanimously and heads back to the house for approval. The house passed a similar bill unanimously last month. The bill includes language establishing “reasonably determined harm” as the requirement for notification and does not require notification if the data in question was truncated or otherwise encrypted. The bill is expected to move through the house and proceed to the governor for signature which would make it the 50th and final state to pass a data breach law.
Oregon: A bill that mandates a 45-day notification period following a data breach was signed into law by the governor. The law, and others like it across the country, is a response to high-profile data breaches such as the Equifax 2016 breach of more than 140 million individual records.
South Dakota: The governor signed the data breach notification bill into law, making the state the 49th to have such a law in place. Several key provisions important to businesses were incorporated into the bill, including the need to establish “reasonably determined harm” as the requirement for notification, along with a 60-day window to alert those who could be affected by a breach.
Taxes
Idaho: A bill that expands the definition of a retailer in the state for sales tax collection purposes was signed by the governor. The law models the affiliate language first passed by New York in 2009 and applies to sellers who generate more than $10,000 in sales into the state through an “affiliated” Idaho-based agent.
Soda Taxes
Arizona: The Governor signed a new law that preempts cities from implementing sugary beverage taxes. The law does not specifically focus on individual products such as soda, but states that taxes on food and beverages are to be uniform across the state.
Key Takeaways
Legislature Status for Week of 3/26/18
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.
Connecticut: Legislation that increases the minimum wage to $15 per hour by 2021 passed its first committee along with a slate of bills supported by Democrats and the governor, including salary history, pay equity and an expansion of the state’s paid leave program. The package of bills faces an uphill battle due to the senate’s even partisan split between Republicans and Democrats.
Delaware: A bill to increase the minimum wage to $9.25 per hour by 2020 failed in the senate by one vote. The sponsor of the bill indicated that the issue could be revisited before the session is scheduled to adjourn in late June.
Maine: Legislation to scale back the scheduled increases in the state’s minimum wage law passed by ballot initiative in 2016 did not pass its first full body vote in the house. It will still move to the Senate and could be amended to attract more Democrat votes. The proposal would reduce the 2018 wage from $10 per hour to $9.50 per hour and allow for increases to $11 per hour by 2021 instead of the previously approved $12 per hour It would also eliminate the cost-of-living adjustment and establish a training wage.
Rhode Island: Legislation to increase the tipped wage from the current $3.89 per hour to two-thirds of the statewide minimum was heard in committee along with other minimum wage bills. The sponsor of the legislation focused her testimony on the linkage of tipping and sexual harassment, noting that increasing “the tipped minimum…will help give waitresses the confidence that they need to be able to stand up for themselves.” Since a law was passed just last year to raise the wage to $10.50 per hour by 2019, it is unclear at this stage if the legislature will pass another increase this cycle.
Wisconsin: A bill to prevent localities from enacting laws relating to employee wages, benefits and scheduling, among other issues, passed both the house and the senate. The governor is expected to sign the bill into law.
Anaheim, CA: In a move aimed at gaining leverage in ongoing negotiations, a labor union representing Anaheim hospitality workers, including Disneyland and area hotels, announced plans to pursue a local ballot initiative that would raise the minimum wage for hotels that receive city tax subsidies. The wage increase would start at $15 per hour and rise to $18 per hour by 2022 with future increases tied to cost of living. The language has yet to qualify for the November ballot.
Paid Leave
Connecticut: Family leave legislation that would provide up to 12 weeks of leave at 100% salary with a $1,000 per week cap passed its first committee along with a slate of bills supported by Democrats and the governor that includes a wage increase, a ban on salary history questions, and pay equity. The package of bills faces an uphill battle due to the senate’s even partisan split between Republicans and Democrats.
Hawaii: Two paid leave bills continue to make their way through the process. One senate-passed bill requires the state labor department to establish a paid leave program for all workers by 2023. The other house-passed bill requires employers with fewer than fifty workers to provide paid sick leave but exempts those who offer leave policies at or above the proposed mandate. Both bills have passed one chamber and a first committee hearing in the other chamber. It remains unclear at this stage which, if any, bill will advance.
Maryland: Legislation passed the senate establishing an income tax credit of up to $1,000 per employee for businesses with fewer than 25 employees that offer paid leave. It is intended to provide relief for small businesses from the cost of the newly-enacted paid leave law.
New Hampshire: The house passed legislation to create a state-run paid family and medical leave insurance program. The program would offer up to six weeks of leave insurance for all employees and would be funded by employee contributions. Employees would have the option to individually opt-out of the program, and employers would be obligated to remit the withholdings to the state. The governor has been generally supportive of the concept of a paid leave program but has expressed substantial concerns with this legislation as passed. His office advocated for a failed amendment during the house process that would have gutted the current language and replaced it with a mandate that employers offer access to private plans. The bill now moves to the senate where that debate will likely be renewed.
New Jersey: Favorable amendments to the paid leave bill moving in the house have reportedly been agreed to by senate leaders as well signaling that the bill will likely move forward with little opposition. The house legislation now preempts local leave ordinances, allows for black-out dates as set by employers, has an exemption for seasonal workers, reduces the maximum hours of leave from 72 to 40 hours and contains a 180-day implementation delay once the bill is signed into law. The bill passed its first house committee and still needs to move through both the full house and the senate.
Scheduling
Connecticut: The Committee on Children voted down a bill prohibiting the use of “on call” scheduling which would have mandated that all employers provide no less than 24 hours notice of shift schedules.
Labor Policy
Hawaii: A house-passed bill that would direct state agencies to publish an annual report of the fifty employers in the state with the highest number of employees receiving public assistance passed through two committees in the senate. All votes so far have been unanimous indicating likely passage.
Idaho: The governor signed into law a bill codifying that neither a franchisee nor a franchisee’s employees shall be considered employees of the franchisor.
Virginia: The governor vetoed a bill codifying that neither a franchisee nor a franchisee’s employees shall be considered employees of the franchisor.
Washington: Governor Inslee signed several bills into law dealing with employer policies around sexual harassment, all of which will take effect in June. One prohibits non-disclosure agreements that prevent disclosure of harassment or assault. Another voids employment contracts that do not explicitly protect an employee’s right to file sexual harassment or assault complaints with authorities. And yet another law prevents non-disclosure agreements from inhibiting the gathering of information or witness testimony related to sexual harassment or assault.
NLRB: Pending approval from an Administrative Law Judge, the NLRB settled a collection of cases that charged McDonald’s USA and its franchisees violated the rights of workers and asserted that McDonald’s USA and its franchisees were joint employers. The settlement, if approved, will compensate workers and absolve both franchisor and franchisees of wrongdoing. The SEIU and its political allies on Capitol Hill derided the settlement agreement even before details were made public. Establishing joint employer status between franchisor and franchisees was central to the SEIU’s corporate campaign against McDonald’s and the settlement, while not unexpected, is a setback.
Trade
China: Following the March 8 signing of executive orders establishing steep tariffs on global imports of steel and aluminum, President Trump signed new orders that would impose tariffs on up to $60 billion of products imported from China. Reports indicate that Chinese product categories subject to the tariffs will be focused in the technology sector. A formal list is expected within fifteen days, followed by a thirty-day comment period. Less than 24 hours later, China responded by publishing a list of 128 products from the United States upon which it plans to raise tariffs. The majority of products on China’s list are U.S. agriculture exports. Trump also signaled further action against China in the coming weeks but did not get into specifics.
European Union: As global tensions escalate after several announcements from the Trump Administration regarding planned import tariffs from the world’s largest economy, some U.S. allies were granted temporary relief. The administration announced that the European Union, Australia, Argentina, Brazil, South Korea, Canada and Mexico would all receive initial exemptions from the announced steel and aluminum tariffs.
KORUS: The South Korean government announced a deal with U.S. trade negotiators that essentially keeps the bilateral trade agreement in place following President Trump’s effort to renegotiate the arrangement. U.S. automakers doubled the amount of vehicles that can be exempted from South Korean auto-safety regulations to 50,000 imports per year and South Korea was granted an exemption from the pending U.S. steel tariffs.
NAFTA: U.S. Trade Representative Lighthizer requested that the three NAFTA countries come to an agreement in principle on updates to the trade deal by March 31. An extensive legal review would follow that likely leading up to the expiration of the steel tariff exemption the United States recently granted Mexico and Canada which is set to expire May 1.
Privacy
Alabama: A bill that requires companies that are victims of a data breach to notify their consumers within 45 days passed the senate unanimously and heads back to the house for approval. The house passed a similar bill unanimously last month. The bill includes language establishing “reasonably determined harm” as the requirement for notification and does not require notification if the data in question was truncated or otherwise encrypted. The bill is expected to move through the house and proceed to the governor for signature which would make it the 50th and final state to pass a data breach law.
Oregon: A bill that mandates a 45-day notification period following a data breach was signed into law by the governor. The law, and others like it across the country, is a response to high-profile data breaches such as the Equifax 2016 breach of more than 140 million individual records.
South Dakota: The governor signed the data breach notification bill into law, making the state the 49th to have such a law in place. Several key provisions important to businesses were incorporated into the bill, including the need to establish “reasonably determined harm” as the requirement for notification, along with a 60-day window to alert those who could be affected by a breach.
Taxes
Idaho: A bill that expands the definition of a retailer in the state for sales tax collection purposes was signed by the governor. The law models the affiliate language first passed by New York in 2009 and applies to sellers who generate more than $10,000 in sales into the state through an “affiliated” Idaho-based agent.
Soda Taxes
Arizona: The Governor signed a new law that preempts cities from implementing sugary beverage taxes. The law does not specifically focus on individual products such as soda, but states that taxes on food and beverages are to be uniform across the state.
Key Takeaways
- The Anaheim ballot initiative is a clever tactic — one we’ve seen before and will see again — to win concessions from employers. Labor organizers are betting that the threat of a targeted $18.00/hr. minimum wage going to the ballot in Anaheim and likely passing is enough to force most of those employers to the bargaining table — and they are likely right. Employers faced with corporate campaigns need to be mindful of the external political landscape and how that can be leveraged by the labor community.
- Health advocates in Britain are already claiming victory even though the country’s new sugar tax has yet to go into effect. The graduated tax has encouraged some beverage manufacturers, including Coca-Cola, to reformulate many of their products to get the calorie counts under the taxable levels. Soda tax campaigns in the U.S. have either been focused on taxes at the point of sale or taxing the syrup in the form of an excise tax. This new strategy could provide anti-obesity advocates with a more politically palatable approach, so it may not be long until this model appears in the U.S.
- The bundle of sexual harassment bills that were enacted in Washington, the legislation in New York City and the Rhode Island debate on tipping and its impact on creating a hostile work environment for servers show that the issue is now finding its way into legislation and law. Usually the life cycle of industry issues from concept to conversation to legislation is over a 4 to 5 year period. $15 per hour wages, paid leave and scheduling are good examples of that. The lifecycle of the sexual harassment issue can be measured in months. Companies should be prepared to see similar efforts in city halls and statehouses throughout the country in the very near future that will draw in other entry level employer issues beyond tipping.
Legislature Status for Week of 3/26/18
- The United States Senate is in recess this week
- The United States House is in recess this week
- Twenty-nine state legislatures are meeting actively this week: Alabama, Alaska, Arizona, Colorado, Connecticut, Delaware, Georgia, Hawaii, Iowa, Idaho, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Minnesota, Missouri, Mississippi, Nebraska, New Jersey, New York, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee and Vermont.
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.