Wages
USDOL Tip Pooling Rule: The Labor Department will propose rescinding its regulations for tip pooling. The Obama administration issued rules that prohibited employers from redistributing tips to non-tipped employees, such as "back of the house" workers. Business groups oppose the rule and an association-backed lawsuit is still pending in the courts.
Seaside, CA: The City Council held a public workshop this week to debate increasing the city’s minimum wage to $15/hr., ahead of the scheduled statewide increase to $15/hr. slated for 2023. The state’s current minimum wage is $10/hr.
Santa Clara, CA: The City Council proposed an increase to $15/hr. by 2019 and could vote on the measure next month. If passed, they would join other Silicon Valley localities such as San Jose, Mountain View, Sunnyvale, Palo Alto, Milpitas and Los Altos which are advancing to $15/hr ahead of the 2023 timeline established last year.
Montgomery County, MD.: County Councilmember Marc Elrich is launching a second effort to push a minimum wage increase after County Executive Ike Leggett vetoed a bill to raise the wage to $15/hr. earlier this year. The new proposal would increase the wage to $12.50/hr. in July 2018 and add $1.25/hr. each year until the rate reaches $15/hr. in 2020. Employers with fewer than 26 workers would have until 2022. The measure also includes language that would enable the county executive to cancel scheduled increases during an economic slump.
St. Louis, MO.: A study released by the Federal Reserve Bank of St. Louis found that only a small portion of city residents at the bottom half of the income distribution (about 10,000 of the roughly 74,600) would benefit from the pay raise. Furthermore, the study suggests that other policies such as earned income tax credits and improvement in access to affordable housing would provide stronger benefits to a larger number of poor city residents.
Paid Leave
New Jersey: Governor Christie (R) vetoed a paid family leave bill that would have extended employee benefits to 12 weeks per year but contained no increases to employee funding to account for the higher cost.
New York: The Cuomo Administration (Worker’s Compensation Board) released updated regulations on the state’s paid family leave law. Employers will be required to offer paid family leave (PFL) beginning on January 1, 2018 to employees who work more than 20 hours per week after they have been employed for 26 consecutive weeks. Employees who work fewer than 20 hours per week become eligible to receive PFL benefits after they have been employed 175 days. The rate of contribution will be 0.126% of an employee’s weekly wage, up to a maximum of $1.63/wk.
Duluth, MN: The City Council announced the formation of a task force to make recommendations to the council on a potential paid leave proposal. The report is due in September and the council could vote by the end of the year. Duluth would be the third locality in Minnesota to implement a paid leave law since the governor recently vetoed a preemption bill prohibiting such action at the local level.
Health Care
U.S. Senate: Republican senators continue to debate options on an ACA repeal and replace package that still has significant challenges in gaining enough Republican votes to pass. Majority Leader McConnell has signaled a possible vote to proceed next week, but reports indicate that Republicans lack consensus on the details of the package. Senator McCain’s (R-AZ) hospitalization further complicates passage.
Taxes
No Regulation Bill: The House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law will hold a hearing this week on cross-border state regulation issues. The subcommittee will hear testimony on the “No Regulation Without Representation Act”, which would allow a state to tax and regulate a taxpayer’s interstate commerce activity only if the taxpayer’s business activities include a physical presence in that state. This bill would codify the existing physical nexus requirements under the 1992 SCOTUS Quill decision and prevent states from requiring out of state sellers to collect and remit sales taxes.
Arkansas: Fifty of the state’s cities and counties have asked the governor to call a special session on online sales tax collection after the legislature failed to pass an economic nexus bill that would trigger collection obligations when a seller makes at least $100,000 in sales in the state. The fifty localities have signed a resolution asking for the special session, and they are soliciting hundreds more over the next few months. The governor has voiced a reluctance to call the special session and has referred the issue to a tax study committee which will convene prior to the next legislative session.
Ohio: State officials clarified that the nexus language included in the state budget bill passed in June, differs from the approach Massachusetts recently declined to enforce. The Massachusetts statute sought to establish physical nexus for sales tax collection obligation through ‘cookie’ text files that online retailers place on consumer’s computers. The Ohio language distinguishes between text files and apps and other software loaded onto devices in Ohio, but despite those differences, it is still likely that the statute will draw a lawsuit.
International Trade
NAFTA: The Trump administration released their official negotiating objectives to modernize the North American Free Trade Agreement (NAFTA) with Mexico and Canada. The objectives outlined a plan to reduce the U.S. trade deficit with Mexico, restrict the amount of imported material in goods that qualify under the agreement, and eliminate a controversial mechanism to review trade remedies. Full negotiations can begin 30 days after the release of the objectives and will be subject to a Congressional vote.
Transportation