Regulatory Watch: Weekly recap of retail-related legislative and judicial developments - July 23
Wages
Chicago, IL - A majority of city aldermen has signed onto a bill that would pilot a Universal Basic Income (UBI) for a small segment of the city’s population. The legislation would direct the Mayor’s office to establish a program that offers at least $500/month to one thousand families in the city. If enacted, Chicago would be the largest U.S. city to test a UBI. The bill is before the Committee on Workforce Development and Audit, the chair of which is also a sponsor.
Paid Leave
Federal - The U.S. Chamber of Commerce announced its support for the Republican-backed Workflex in the 21st Century Act. The bill would exempt employers from state and local paid leave laws if they offer a certain level of leave for both part-time and full-time workers. The chamber’s announcement comes after congressional hearings on the issue and just ahead of the expected announcement of a companion bill to be introduced by Sen. Rubio and other leading Republicans in the Senate. Any paid leave proposal will be a heavy lift during an election year.
Dallas, TX - The city secretary announced that an effort to place a paid sick leave ordinance on the Nov. ballot failed to submit enough valid signatures. Activists submitted close to 120,000 signatures for approval but more than 50,000 were rejected leaving the initiative short of the necessary threshold. Supporters are asking for a recount and have threatened litigation although no suit has been filed. The city council could also act directly if the initiative process continues to stall.
Scheduling
Abercrombie & Fitch - The retailer has offered a $9.2 million settlement with nearly 61,000 current and former employees who allege that the company violated California’s call-in scheduling law. The allegation are specific to a state law mandating companies must pay employees who report to work but are asked to go home if business is slow. The focus of the case is whether or not the company should have paid the workers for the time the employees took to call in. A U.S. District Court judge will determine if the settlement is appropriate.
Labor Policy
Labor Department - The Trump Administration officially rescinded the Obama-era persuader rule which mandated that employers disclose relationships with consultants and law firms providing advice on union organizing campaigns.
Labor Department - The Labor Department’s Wage and Hour Division released its first substantive guidance on independent contractor classification. The guidance relates to the caregiver industry but has broader implications. Last June, the agency withdrew an Obama-era administrative interpretation that broadened the definition of an employee, capturing many independent contractors. The newly released Field Assistance Bulletin is intended to clarify how the agency will interpret a company’s responsibilities. In short, the guidance returns to its historical approach that considers the “totality of the circumstances to evaluate whether an employment relationship exists” and “will evaluate all factors … to reach appropriate conclusions in each case.”
Labor Department - Arthur Rosenfeld, a former general counsel of the NLRB under President George W. Bush, has officially taken over as head of the DOL’s Office of Labor and Management Standards. Among other things, the office oversees the audits of labor unions and labor leaders and going forward, will likely determine if worker centers and other alt labor organizations should be treated as unions. The business community has long asserted that groups like Fight for $15 and the Restaurant Opportunities Center (ROC) are really labor front groups and should be treated as such and not as “community-based organizations” like the labor community contends.
NLRB - An administrative law judge rejected the proposed settlement of a collection of cases between the NLRB and McDonald’s. The cases allege that McDonald’s USA and its franchisees were joint employers and that they violated the rights of workers. The settlement would have compensated workers and absolved both franchisor and franchisees of wrongdoing. McDonald’s USA can choose to resume the trial, attempt to reach a new settlement agreement with the Board’s general counsel or appeal to the full Board.
Taxes
Federal - The U.S. House Judiciary Committee is holding an informational hearing on July 24 regarding the impacts of the landmark Supreme Court ruling in South Dakota v. Wayfair. The case effectively removed the physical presence standard for sales tax collection authority for states. As a result, several states have moved to expand their authority resulting in more businesses having additional tax collection obligations. Many committee members have long questioned the impact this expanded authority would have on interstate commerce. During his 5-year tenure heading the committee, the chairman has yet to allow debate on similar legislation and at this stage it does not appear that new legislation is forthcoming.
South Carolina - The revenue commissioner announced that the state would move forward with guidance for collection of sales taxes by out-of-state sellers in the wake of the South Dakota v. Wayfair decision. The commissioner does not see the need for additional legislative action by the general assembly.
Utah - During a recent special session, the legislature passed a bill to establish an economic nexus threshold similar to the one established by the Supreme Court in the South Dakota v Wayfair case. Existing law ties the additional revenue to a tax break for manufacturers. The governor will soon sign the legislation into law and retailers above the threshold will need to begin collections in 2019.
Soda Taxes
Philadelphia, PA - The state supreme court upheld the city’s 1.75 cents per ounce tax on sugary beverages. The law has been in effect since its passage in 2016 and the collected revenue had been put in reserve while the litigation was pending. The court ultimately found that the city’s tax on “beverage distribution” - i.e. an excise tax and not specifically a tax at point of sale - was not in violation of state law. Additionally, the m
Chicago, IL - A majority of city aldermen has signed onto a bill that would pilot a Universal Basic Income (UBI) for a small segment of the city’s population. The legislation would direct the Mayor’s office to establish a program that offers at least $500/month to one thousand families in the city. If enacted, Chicago would be the largest U.S. city to test a UBI. The bill is before the Committee on Workforce Development and Audit, the chair of which is also a sponsor.
Paid Leave
Federal - The U.S. Chamber of Commerce announced its support for the Republican-backed Workflex in the 21st Century Act. The bill would exempt employers from state and local paid leave laws if they offer a certain level of leave for both part-time and full-time workers. The chamber’s announcement comes after congressional hearings on the issue and just ahead of the expected announcement of a companion bill to be introduced by Sen. Rubio and other leading Republicans in the Senate. Any paid leave proposal will be a heavy lift during an election year.
Dallas, TX - The city secretary announced that an effort to place a paid sick leave ordinance on the Nov. ballot failed to submit enough valid signatures. Activists submitted close to 120,000 signatures for approval but more than 50,000 were rejected leaving the initiative short of the necessary threshold. Supporters are asking for a recount and have threatened litigation although no suit has been filed. The city council could also act directly if the initiative process continues to stall.
Scheduling
Abercrombie & Fitch - The retailer has offered a $9.2 million settlement with nearly 61,000 current and former employees who allege that the company violated California’s call-in scheduling law. The allegation are specific to a state law mandating companies must pay employees who report to work but are asked to go home if business is slow. The focus of the case is whether or not the company should have paid the workers for the time the employees took to call in. A U.S. District Court judge will determine if the settlement is appropriate.
Labor Policy
Labor Department - The Trump Administration officially rescinded the Obama-era persuader rule which mandated that employers disclose relationships with consultants and law firms providing advice on union organizing campaigns.
Labor Department - The Labor Department’s Wage and Hour Division released its first substantive guidance on independent contractor classification. The guidance relates to the caregiver industry but has broader implications. Last June, the agency withdrew an Obama-era administrative interpretation that broadened the definition of an employee, capturing many independent contractors. The newly released Field Assistance Bulletin is intended to clarify how the agency will interpret a company’s responsibilities. In short, the guidance returns to its historical approach that considers the “totality of the circumstances to evaluate whether an employment relationship exists” and “will evaluate all factors … to reach appropriate conclusions in each case.”
Labor Department - Arthur Rosenfeld, a former general counsel of the NLRB under President George W. Bush, has officially taken over as head of the DOL’s Office of Labor and Management Standards. Among other things, the office oversees the audits of labor unions and labor leaders and going forward, will likely determine if worker centers and other alt labor organizations should be treated as unions. The business community has long asserted that groups like Fight for $15 and the Restaurant Opportunities Center (ROC) are really labor front groups and should be treated as such and not as “community-based organizations” like the labor community contends.
NLRB - An administrative law judge rejected the proposed settlement of a collection of cases between the NLRB and McDonald’s. The cases allege that McDonald’s USA and its franchisees were joint employers and that they violated the rights of workers. The settlement would have compensated workers and absolved both franchisor and franchisees of wrongdoing. McDonald’s USA can choose to resume the trial, attempt to reach a new settlement agreement with the Board’s general counsel or appeal to the full Board.
Taxes
Federal - The U.S. House Judiciary Committee is holding an informational hearing on July 24 regarding the impacts of the landmark Supreme Court ruling in South Dakota v. Wayfair. The case effectively removed the physical presence standard for sales tax collection authority for states. As a result, several states have moved to expand their authority resulting in more businesses having additional tax collection obligations. Many committee members have long questioned the impact this expanded authority would have on interstate commerce. During his 5-year tenure heading the committee, the chairman has yet to allow debate on similar legislation and at this stage it does not appear that new legislation is forthcoming.
South Carolina - The revenue commissioner announced that the state would move forward with guidance for collection of sales taxes by out-of-state sellers in the wake of the South Dakota v. Wayfair decision. The commissioner does not see the need for additional legislative action by the general assembly.
Utah - During a recent special session, the legislature passed a bill to establish an economic nexus threshold similar to the one established by the Supreme Court in the South Dakota v Wayfair case. Existing law ties the additional revenue to a tax break for manufacturers. The governor will soon sign the legislation into law and retailers above the threshold will need to begin collections in 2019.
Soda Taxes
Philadelphia, PA - The state supreme court upheld the city’s 1.75 cents per ounce tax on sugary beverages. The law has been in effect since its passage in 2016 and the collected revenue had been put in reserve while the litigation was pending. The court ultimately found that the city’s tax on “beverage distribution” - i.e. an excise tax and not specifically a tax at point of sale - was not in violation of state law. Additionally, the m