Regulatory Wrap-Up: Updates on wage increases, NAFTA and transportation

8/14/2017

Wages

Arizona: The state supreme court rejected an attempt to nullify a voter-approved statewide wage law that went into effect Jan. 2017. The mandate requires employers to provide three days of paid leave and increases the minimum wage to $12/hr. by 2020. The current statewide wage is $10/hr.

Rhode Island: The recently enacted state budget includes a wage increase to $10.10/hr. in 2018 and to $10.50/hr. in 2019. The current statewide minimum wage is $9.60/hr.

Albuquerque, NM: A state district judge rejected a business community-backed challenge to a 2012 voter-approved minimum wage ordinance. The judge has not yet ruled on a similar paid leave ordinance scheduled to appear on the Oct. 3 ballot.

Kansas City, MO: An Aug. 8 ballot initiative seeking to incrementally raise the city’s minimum wage to $15/hr. over a five-year period passed overwhelmingly with 69% of the vote. The initiative conflicts with a recently passed statewide preemption law preventing local action on employee wage and benefit issues. A legal challenge to the initiative is likely. Proponents have also begun working on a similar ballot initiative to increase the statewide minimum wage.

Wage Theft

Sonic: Sonic Drive-In announced a partnership with the Labor Department designed to increase wage and hour compliance among Sonic franchisees. The agreement comes after a number of violations over the past few years.

Labor Policy

NLRB: Current NLRB Chairman Philip Miscimarra announced his departure from the board upon completion of his first term in Dec. The Republican Chairman opted out of his next term citing family concerns. The U.S. Senate recently confirmed Marvin Kaplan for an open seat and has yet to schedule William Emanuel’s confirmation vote. It remains to be seen who President Trump will nominate to replace Miscimarra.

Joint Employer: The D.C. Circuit Court of Appeals declined to enforce an NLRB finding that CNN and Team Video Services (a subcontractor) were joint employers. The unanimous decision found that the NLRB failed to demonstrate that the two entities shared “direct and immediate control” over a group of employees. Legal analysts consider this a positive development for employers as a similar case -- the controversial 2015 Browning-Ferris NLRB decision awaits appeal in the same court.

Micro-Unions: The D.C. Circuit Court of Appeals upheld the NLRB’s 2011 Specialty Healthcare decision and rejected a challenge brought by Rhino Northwest LLC, a concert staging company. The court found that “riggers” who set up equipment can be considered a separate bargaining unit, upholding the NLRB’s decision. The ruling is particularly significant because employers across the country can challenge NLRB decisions in the D.C. Circuit; however, seven other federal appeals courts have already approved the NLRB’s micro-union test. Businesses are looking to the administration and Congress to overturn the Specialty Healthcare decision that allows for unions to organize smaller bargaining units as opposed to wall-to-wall units which had historically been the norm prior to 2011.

Delaware: Delaware recently enacted a law prohibiting employers from inquiring into an applicant’s salary histories, effective Dec. 1.

Medical Marijuana

Connecticut: A federal district court judge ruled that a state law prohibiting an employer from firing or refusing to hire a person who uses medical marijuana is not preempted by federal law, in effect upholding the law. This ruling is similar to a recent Massachusetts state court decision and is notable given the federal jurisdiction of the court.

Tax

MTC: The Multistate Tax Commission (MTC) announced that five new states (FL, ID, IA, SD and WI) have joined the special voluntary disclosure program for online sellers. The program now has 19 states participating. Under the voluntary amnesty program, sellers who could have sales tax collection liabilities as a result of storing inventory in fulfillment centers, can join the program and in most cases be forgiven past sales tax liabilities in exchange for future collection in the participating states.

Sugar Tax

Cook County, IL: Attorneys for the Cook County Board of Commissioners withdrew a legal challenge to force the Illinois Retail Merchants Association to pay over $17 million in lost revenue during the time period the courts enjoined the “pop tax” from going into effect. The federal government also weighed in on the issue claiming the county’s implementation of the tax through a point-of-sale workaround is a violation of SNAP rules, placing $87 million in federal funding in jeopardy. In a related development, customers in Cook County filed separate lawsuits against 7-11, Walgreens and McDonalds for allegedly charging the tax on unsweetened beverages. The future of the tax remains uncertain.

Transportation

West Coast Ports: The International Longshore and Warehouse Union membership ratified a contract extension with the Pacific Maritime Association (cargo carriers and terminal operators) through July 2022. The announcement comes after several importer groups encouraged both the union and management to begin early negotiations in an effort to avoid a repeat of the 2015 slowdown, estimated to have cost retailers $7 billion.

Trade

China: The White House announced an executive memorandum Monday that directs the USTR to determine whether to begin investigating China regarding intellectual property violations. The delayed move could escalate tensions between the two countries as they continue to discuss the volatile North Korea situation. The memorandum comes after the Commerce Department announced last week countervailing duties ranging from 17% to 80% on imported aluminum foil, 70% of which comes from China.