Regulatory Wrap-Up: Where state and national policy impact retail

7/31/2017

Wages

Overtime: The Labor Department called for public comment on the Obama administration's overtime rule which increased the salary threshold to $47,476/yr. The public comment request is viewed as a first step to rescinding or updating the rule, which has been temporarily blocked from going into effect because of a court ruling in December 2016. Secretary Acosta has acknowledged the need to raise the threshold but has voiced concern that the $47,000 level is too high.

Vermont: A study committee that was created by the legislature to investigate the economic impacts of a potential minimum wage increase announced they will begin meeting in August. The committee will meet several times over the coming months and will issue a report no later than December 1.

Montgomery County, MD: Council member Marc Elrich reintroduced legislation to increase the county minimum wage to $15/hr over the next three years with automatic adjustments in subsequent years tied to inflation. The bill passed earlier this year but County Executive Isiah Leggett vetoed the measure. Elrich and several other council members have since announced their intent to run for the county executive seat and will continue to elevate this issue, and Leggett’s veto, for political gains.

Paid Leave

Chipotle: Reports have surfaced, sourced from viral employee videos, alleging the recent norovirus outbreak at a Virginia Chipotle was compounded by non-compliance with company sick leave policies. The outbreak has also triggered lawsuits from sick customers who ate at the Sterling, VA location.

Scheduling

Chicago, IL:The legislation seeking to implement a restrictive scheduling mandate similar to San Francisco was moved to the rules committee which represents a significant procedural delay for the bill. Business advocates continue to meet with members of the city council and the mayor’s office to discuss the challenges associated with this legislation.

Oakland, CA: Reports indicate that scheduling legislation may be under consideration by the city council towards the end of the year. No legislation has been announced or introduced.

Health Care

U.S. Senate:Republican efforts to repeal Obamacare suffered defeat as GOP Senators John McCain (AZ), Lisa Murkowski (AK) and Susan Collins (ME) broke ranks and voted with democrats against a last ditch effort from Republican leadership to repeal key pieces of the ACA. Following the vote, Leader McConnell acknowledged on the floor of the Senate that “it is time to move on” likely signaling the demise of the seven-year effort to repeal the landmark healthcare law.

Labor Policy

Joint Employer: House Republicans, along with a few democratic cosponsors, introduced their long-awaited legislation that rolls back the National Labor Relations Board’s joint employer standard established under the 2015 Browning-Ferris decision. The legislation would provide clarity to franchisors and franchisees and protect employers from increased liability.

EEOC Pay Data: The House Appropriations Committee added an amendment to the relevant spending bill that prevents the Equal Employment Opportunity Commission from implementing the 2016 rule that requires employers with 100 or more employees to submit salary data with their annual EEO-1 forms. If the language included in the appropriations package does not ultimately become law, the first employer reports with salary data would be due March 31, 2018.

Tax

Tax Reform: Republican leaders announced the abandonment of the Border Adjustment Tax (BAT) as a central part of their tax reform efforts. The BAT provision (which would put levies of up to 20 percent on thousands of imported consumer items as a way to pay for overall tax reform) was successfully opposed by importers and consumers across the country.

Pennsylvania: The Senate released their budget last week and it included an expansion of sales tax nexus requirements for out-of-state sellers that use a marketplace to sell into the state. The final outcome is unclear because both the deadline for enacting a new budget has long since passed and the House has voiced opposition to any tax increases. It remains to be seen whether or not the two chambers can produce a budget prior to the Governor implementing a spending freeze.

Massachusetts: The Department of Revenue issued a regulation this week establishing that apps and/or files on a customer’s computer or smartphone does establish a physical presence for sales tax collection purposes. The action comes after the administration abruptly rescinded a similar directive in June after it drew a lawsuit from online sellers focused on the legal authority of the directive. The attorney general's office advised the administration that the directive would have more authority if positioned as a regulation.

Rhode Island: A provision included in the state budget proposal obligates out-of-state sellers to report to consumers their use tax liability at the time of purchase. It also obligates marketplace providers such as Amazon to report to the state information about third party sellers who do not collect. These provisions are modeled after Colorado’s landmark 2010 law and will go into effect two weeks following passage of the budget.

Sugar Tax

Cook County, IL:Circuit Judge Daniel Kubasiak dismissed the lawsuit initiated by the Illinois Retail Merchants Association to stop the penny-per-ounce tax on sugary drinks from taking effect. The new tax was set to go into effect July 1 but the judge ordered a temporary restraining order as a result of the lawsuit to further study the issue. The county filed a motion to dismiss the industry lawsuit which the judge sided with today. It is unclear at this point when the tax will take effect.