Regulatory Wrap-Up: Efforts gain ground to raise minimum wage in N.J.; paid leave legislative passes in Md.
Wages
New Jersey: Governor Murphy and Democratic legislative leaders are "not anywhere close" to aligning on the details of a $15/hr. minimum wage bill. Some Democratic leaders favor exemptions; however, Murphy campaigned on a "clean" bill without carve-outs for certain workers. The timing and phasing in of a wage increase are also in question and currently being negotiated. Once Democratic leaders agree on a compromise, expect the bill to move quickly.
Pennsylvania: Governor Tom Wolf is proposing an update to the state's overtime salary threshold. The proposal would raise the state's overtime eligibility threshold above the federal minimum rate ($455/wk., or $23,660/yr.) to $610/wk. or $31,720/yr. in 2020. The overtime threshold would further increase to $39,832/yr. in 2021 and to $47,892/yr. by 2022. The proposed regulation would need approval from a five-member board that has a 3-2 Democratic majority. The approval process could take more than a year, meaning that Wolf, who is seeking a second term in November’s election, must get re-elected to ensure the process continues.
Virginia: The slate of proposed minimum wage bills died in a senate committee early in the state’s relatively short legislative session. As a result, the general assembly is not likely to take up the wage issue but is still expected to debate paid leave and other employment issues.
Paid Leave
Maryland: Late last Friday, the legislature voted to override the governor’s veto of paid leave legislation that passed both chambers during the 2017 session. The bill is slated to become law 30 days from passage. Business groups are lobbying for an extension of an additional 60-90 days to allow for more time to comply. The law requires employers with 15 or more workers to provide five days of paid leave a year and applies to full, part time and seasonal employees. The bill contains no preemption language so localities in the state could still pass more generous proposals which happened in Montgomery County.
Pay Equity
Washington: An equal pay bill passed the house. It would mandate that employers pay workers, performing similar tasks relative to difficulty and responsibility, the same amount regardless of gender. Previous iterations have passed the house and died in the senate, but because the upper chamber has now shifted to a Democratic control, the bill has a better chance of final passage.
Health Care
California: A Los Angeles Superior Court has given class action certification to a lawsuit charging 17 restaurants with price fixing. The restaurants included a healthcare surcharge on customer’s bills. The claim is that the restaurants named in the complaint colluded in establishing the surcharge in violation of state antitrust laws. Surcharges, such as this, have become popular in some areas of the country and a number have faced legal challenges. 539e
Wage Theft
Taco Bell: Over five hundred employees of a Michigan-based franchisee are pursuing a class action claim for alleged wage and overtime violations. Workers claim that the franchisee engaged in systematic wage theft by “doctoring” employees’ hours. The case is expected to go to trial in 2019.
Joint Employer
McDonald’s: The NLRB is looking to settle a high-profile lawsuit against McDonald’s USA. NLRB General Counsel Peter Robb asked an administrative law judge to pause the case against McDonald’s and various franchisees so they can discuss a “global” settlement of “all pending charges.” Board attorneys under the previous administration said that McDonald’s USA should be on the hook for possible labor violations by franchisee restaurant owners. This case has been closely watched as a potential precedent-setting joint employer case.
Immigration
U.S. Senate: Following a three-day government shutdown over the weekend, Senate Democrats and Republicans agreed to a continuing resolution to fund the federal government through Feb. 8. The House is expected to follow suit, sending the short-term funding bill to the President’s desk for signature. The major political impasse has centered around immigration -- a solution for DACA recipients combined with increased border security funding. Leader McConnell agreed to hold an open vote on DACA and border funding in the near future, in exchange for Democrat votes on the funding bill.
Trade
Federal: The House passed the Miscellaneous Tariff Bill, which applies temporary tariff cuts to nearly 1700 imported goods and could result in the elimination of over $1 billion in import tariffs. The Senate is expected to take up the issue later this year.
NAFTA: The sixth round of talks around the potential revamp of the three-country trade agreement began in Montreal this week. Reports indicate growing animosity between the U.S. and Canada as both countries have moved further apart in negotiations on key aspects of the deal. The pending presidential election in Mexico could further erode talks on the more contentious topics.
Legislature Status for Week of 1/22/18
• The United States Senate is in session this week
• The United States House is not in session this week, but will reconvene for shutdown vote
• Thirty-seven state legislatures are meeting actively this week:
o AL, AK, AZ, CA, CO, DE, FL, GA, HI, IA, ID, IN, KS, KY, MA, MD, ME, MI, MO, MS, NC, NE, NH, NJ, NM, NY, OH, PA, RI, SC, SD, TN, VA, VT, WA, WI, WV
Key Takeaways
• The impasse on DACA, the current government shutdown, and the acknowledgement last week by the White House that a border wall is highly unlikely is going to put more political pressure on the Administration to deliver on their immigration promises. This will make additional high-profile workplace raids even more likely as the President works to placate his pro-enforcement base. This is yet another important reason why employers need to take these raids seriously and prepare accordingly.
• The CEO pay conversation is escalating quickly. Just two weeks into most state legislative sessions, numerous states are proposing l