Regulatory Wrap-Up: Insider’s weekly recap of retail-related legislative developments - July 2
Wages
Federal - The U.S. Supreme Court declined to review a decision that upheld a now-defunct Obama-era rule that had restricted employers’ authority to pool workers’ tips, sending the case back to the lower courts. The rule is no longer in effect due to language that was included in the omnibus spending bill earlier this year. The issue raised in this lawsuit covers the time period during which the Obama-era rule was in effect and the outcome could impact other employers. Meanwhile, the Labor Department is rewriting the tip pool rule and plans to release it later this year.
Delaware - Due to last minute negotiations, a bill to increase the state’s minimum wage to $9.25/hr over the next two years passed both chambers prior to the June 30 adjournment. Earlier this year, similar legislation was defeated by only one vote in the full senate due to a member’s concern over the impact on casinos in his district. That issue was resolved in the latest version of the bill. The legislation allows for younger workers (under 18) as well as new employees (first 90 days of employment) to be paid $8.75/hr.
Massachusetts - Raise Up Massachusetts announced that it would pull both its minimum wage and paid leave mandates from the Nov. ballot. In response, the governor signed into law the so-called grand bargain passed by the legislature. It raises the state’s minimum wage to $15/hr over a five-year period and raises the tipped wage to $6.75/hr by 2023. It also establishes both a medical and family paid leave program.
New York - The state labor department concluded its series of regional hearings on the elimination of the tipped wage in the state. The department is now expected to begin the rulemaking process. However, no timeline has been announced.
Paid Leave
Massachusetts - As reported above, the so-called grand bargain was signed into law by the governor. The paid family and medical paid leave program requires businesses with 25 or more employees to provide up to 12 weeks of family leave and 20 weeks of medical leave with a maximum of 26 weeks total per year. Workers will be paid a percentage of their salary up to $850/wk. The medical leave provision will be funded by a 0.63 percent payroll tax split between employers and employees. Businesses with fewer than 25 employees do not have to pay into this fund. The family leave program will be employee-financed.
Austin, TX - A judge denied a request for an injunction of the city’s paid leave law. The paid leave mandate was approved by the city in Feb. and has been subject to litigation by various business groups. The decision allows the city to move forward with an Oct. 1 enactment date. The complainants will likely appeal the decision in an effort to delay implementation. A state legislator has already pre-filed a bill for the 2019 session that would preempt local ordinances on employee benefits.
Swipe Fees
Federal – In a major loss for the retail community, the U.S. Supreme Court ruled in favor of American Express in Ohio v. American Express. The court upheld a lower court decision that American Express can prohibit merchants from encouraging customers to use lower-fee cards, stating that the practice is not anti-competitive as retailers argued.
Labor Policy
U.S. Supreme Court - The U.S. Supreme Court decided a landmark case, Janus v. AFSCME, this week. The case centered on the issue of whether or not public employees can be forced to pay so-called agency fees to fund public sector unions. The court ruled for Mark Janus who argued that he shouldn’t have to pay union dues. The ruling does not directly impact entry-level employers but is notable because it is expected to dramatically impact the revenues of a number of major unions.
Labor Department - The Labor Department will revoke the controversial Obama-era persuader rule. The regulation, which was enjoined by the courts, sought to expand disclosure requirements for employers that contract outside consultants to advise on union organizing campaigns.
NLRB - Following a successful organizing campaign by the International Association of Machinists and Aerospace Workers (IAM), Boeing has asked the National Labor Relations Board to clarify how its regional officials should apply the Board's recently-revised micro-union test. The company asserts that the newly-unionized IAM bargaining unit at its South Carolina facility is not valid under the new test.
No-Poaching Agreements - A federal judge allowed an antitrust claim by a former employee of a McDonald’s franchisee to proceed. The class action focuses on the company's no-poaching policy which prohibits one franchise from hiring employees of another franchise for a six-month period. The proposed class action seeks damages for alleged antitrust violations.
Jimmy John’s - A federal judge ruled that Jimmy John’s does not jointly employ, along with its franchisees, a group of former assistant store managers. The managers alleged that they were unfairly exempted from overtime requirements.
Activism
Immigration Protests - Immigration activists, in reaction to family separation at the border, have organized 130 rallies in 48 states to occur on June 30. While there is no indication that hospitality or retail locations will be targeted, some employers may experience call outs or workplace disruptions.
Taxes
New Jersey - Following a contentious negotiation, the governor and legislative leaders reached a budget deal that involves a temporary increase in corporate taxes and an increased levy on higher incomes. Corporations will see a 2.5% surtax in the first two years with a reduction to 1.5% the following two years before phasing out entirely. Higher earners will pay 10.75% on income over $5 million.
New Jersey - The legislature advanced a bill to the governor’s desk that would allow municipalities
Federal - The U.S. Supreme Court declined to review a decision that upheld a now-defunct Obama-era rule that had restricted employers’ authority to pool workers’ tips, sending the case back to the lower courts. The rule is no longer in effect due to language that was included in the omnibus spending bill earlier this year. The issue raised in this lawsuit covers the time period during which the Obama-era rule was in effect and the outcome could impact other employers. Meanwhile, the Labor Department is rewriting the tip pool rule and plans to release it later this year.
Delaware - Due to last minute negotiations, a bill to increase the state’s minimum wage to $9.25/hr over the next two years passed both chambers prior to the June 30 adjournment. Earlier this year, similar legislation was defeated by only one vote in the full senate due to a member’s concern over the impact on casinos in his district. That issue was resolved in the latest version of the bill. The legislation allows for younger workers (under 18) as well as new employees (first 90 days of employment) to be paid $8.75/hr.
Massachusetts - Raise Up Massachusetts announced that it would pull both its minimum wage and paid leave mandates from the Nov. ballot. In response, the governor signed into law the so-called grand bargain passed by the legislature. It raises the state’s minimum wage to $15/hr over a five-year period and raises the tipped wage to $6.75/hr by 2023. It also establishes both a medical and family paid leave program.
New York - The state labor department concluded its series of regional hearings on the elimination of the tipped wage in the state. The department is now expected to begin the rulemaking process. However, no timeline has been announced.
Paid Leave
Massachusetts - As reported above, the so-called grand bargain was signed into law by the governor. The paid family and medical paid leave program requires businesses with 25 or more employees to provide up to 12 weeks of family leave and 20 weeks of medical leave with a maximum of 26 weeks total per year. Workers will be paid a percentage of their salary up to $850/wk. The medical leave provision will be funded by a 0.63 percent payroll tax split between employers and employees. Businesses with fewer than 25 employees do not have to pay into this fund. The family leave program will be employee-financed.
Austin, TX - A judge denied a request for an injunction of the city’s paid leave law. The paid leave mandate was approved by the city in Feb. and has been subject to litigation by various business groups. The decision allows the city to move forward with an Oct. 1 enactment date. The complainants will likely appeal the decision in an effort to delay implementation. A state legislator has already pre-filed a bill for the 2019 session that would preempt local ordinances on employee benefits.
Swipe Fees
Federal – In a major loss for the retail community, the U.S. Supreme Court ruled in favor of American Express in Ohio v. American Express. The court upheld a lower court decision that American Express can prohibit merchants from encouraging customers to use lower-fee cards, stating that the practice is not anti-competitive as retailers argued.
Labor Policy
U.S. Supreme Court - The U.S. Supreme Court decided a landmark case, Janus v. AFSCME, this week. The case centered on the issue of whether or not public employees can be forced to pay so-called agency fees to fund public sector unions. The court ruled for Mark Janus who argued that he shouldn’t have to pay union dues. The ruling does not directly impact entry-level employers but is notable because it is expected to dramatically impact the revenues of a number of major unions.
Labor Department - The Labor Department will revoke the controversial Obama-era persuader rule. The regulation, which was enjoined by the courts, sought to expand disclosure requirements for employers that contract outside consultants to advise on union organizing campaigns.
NLRB - Following a successful organizing campaign by the International Association of Machinists and Aerospace Workers (IAM), Boeing has asked the National Labor Relations Board to clarify how its regional officials should apply the Board's recently-revised micro-union test. The company asserts that the newly-unionized IAM bargaining unit at its South Carolina facility is not valid under the new test.
No-Poaching Agreements - A federal judge allowed an antitrust claim by a former employee of a McDonald’s franchisee to proceed. The class action focuses on the company's no-poaching policy which prohibits one franchise from hiring employees of another franchise for a six-month period. The proposed class action seeks damages for alleged antitrust violations.
Jimmy John’s - A federal judge ruled that Jimmy John’s does not jointly employ, along with its franchisees, a group of former assistant store managers. The managers alleged that they were unfairly exempted from overtime requirements.
Activism
Immigration Protests - Immigration activists, in reaction to family separation at the border, have organized 130 rallies in 48 states to occur on June 30. While there is no indication that hospitality or retail locations will be targeted, some employers may experience call outs or workplace disruptions.
Taxes
New Jersey - Following a contentious negotiation, the governor and legislative leaders reached a budget deal that involves a temporary increase in corporate taxes and an increased levy on higher incomes. Corporations will see a 2.5% surtax in the first two years with a reduction to 1.5% the following two years before phasing out entirely. Higher earners will pay 10.75% on income over $5 million.
New Jersey - The legislature advanced a bill to the governor’s desk that would allow municipalities