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Regulatory Wrap-Up: Insider’s weekly recap of retail-related legislation - June 18


Delaware - A bill to increase the state’s minimum wage to $10.25/hr by 2021 passed a senate committee. Earlier this year, similar legislation was defeated that would have increased the state’s minimum wage to $9.25/hr. The earlier bill failed by only one vote in the full senate due to a member’s concern over the impact on casinos in his district. It remains to be seen if this legislation will advance through the full senate.

Pennsylvania - The Department of Labor and Industry released proposed regulations to raise the state’s overtime salary threshold to $47,892 over a three-year period. The current federal standard is $23,660. The proposed regulations are open to public comment for 30 days, after which the updated regulation will be subject to approval by a five-member board appointed by the governor.

Anaheim, CA - The Orange County Registrar of Voters informed the city this week that the local minimum wage measure had sufficient signatures to qualify for the ballot. The initiative, which is designed by unions to force area hotels to the bargaining table, would increase the minimum wage at Disneyland and nearby hotels that receive city subsidies to $15/hr on Jan. 1, 2019 and increase in $1 increments annually, reaching $18/hr on Jan. 1, 2022. After that, it would increase by 2% per year or by the inflation index, whichever is greater. The city council will have the option at its June 19 meeting to approve the measure outright, submit it to voters, or seek an economic analysis. It's likely the council will seek the third option - the economic analysis - which would delay the decision on whether to place it on the ballot until its July 17 meeting. It is still likely the measure ultimately makes it to the ballot in the fall.

Study - An annual report released Wednesday by the National Low Income Housing Coalition found that earnings from a full-time minimum wage job would not allow a worker to afford a modest two-bedroom apartment rental anywhere in the country. That conclusion is based on the budgeting standard that no more than 30 percent of income should be spent on housing. Applying that standard, workers must earn $17.90/hr to afford a modest one-bedroom apartment or $22.10/hr for a two-bedroom rental. The report estimates that renters nationally make an average of $16.88/hr.

Paid Leave

Dallas, TX - The advocacy group, Working Texans for Paid Sick Time, submitted 110,000 signatures in support of a ballot initiative to mandate employers offer workers paid sick leave. The language mirrors the law in Austin, TX which passed earlier this year and is the subject of litigation. If the signatures are approved, the initiative will appear on the Nov. ballot.


Philadelphia, PA - Councilwoman Helen Gym introduced legislation that would institute scheduling mandates on restaurant, retail and hotel employers with operations in the city. The released language applies to businesses with more than 250 employees and 20 locations worldwide (franchisees are considered part of the larger system). The council is set to recess for the summer and the bill will likely be taken up when they reconvene in the fall.

Joint Employer

New York City, NY - The city council is considering first-of-its-kind legislation that would hold franchisors liable for the actions of their franchisees under the city’s human rights laws. The proposed language effectively codifies franchisors as joint employers. It also would expand liability across companies and their contractors. The Civil and Human Rights Committee will hear the bill June 18 with further council action expected to follow.

NLRB - Business groups filed a rare joint petition on Wednesday asking the National Labor Relations Board to adopt a rule narrowing the circumstances in which companies can be held liable for labor law violations by their contractors or franchisees. They petitioned the Board to reinstitute the old joint employer standard of direct and immediate control. The Board has already announced that it will begin the rulemaking process on the issue this summer.

The Cheesecake Factory - The state labor department found The Cheesecake Factory to be jointly liable along with their janitorial subcontractors for $4.57 million in underpaid wages. At eight locations, investigators found that workers of a janitorial subcontractor worked without rest or meal breaks and performed additional tasks off-the-clock, sometimes at the direction of Cheesecake Factory managers. The Cheesecake Factory action appears to be the first major application of California’s expanded joint employer standard. According to a UCLA professor, this “was a test case and designed to be an exemplar for employers to make sure they don’t contract or subcontract to unscrupulous actors.”

Labor Policy

NLRB - The National Labor Relations Board Division of Advice found that a South Carolina Papa John’s franchisee unlawfully discharged an employee who failed to report to work after being denied a request for time off to participate in a Fight for $15 convention. Company policy required employees to give seven days notice for time off and the employee failed to meet that requirement. The worker who took time off to participate in the Fight for $15 convention and protests was found to have been protected by federal labor law because they engaged in a “solo strike.”


Alabama - The Alabama Tax Tribunal ruled against the state Department of Revenue, finding that the complainant, Newegg Inc., was not subject to the 2016 law requiring out-of-state retailers to collect the state’s sales tax. The tribunal, which is unique to Alabama, found that the state did not prove that Newegg engaged in any of the activity required by the law. Similar to the court case that began in South Dakota and is now before the U.S. Supreme Court, the state could appeal the decision in an effort to force the question to a higher court. The state is not likely to take any further action until the South Dakota verdict is announced which is expected before the end of June.

Connecticut - The governor signed into law a bill that would expand sales tax collection obligations to sellers with more than $250,000 in sales or more than 200 sal
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