What Does A New Administration Mean For Retailers? Is Federal Deregulation In Store?

by Susan Drenning, President, ComplyRight

Only a month into President Trump’s term, we’ve already experienced a deluge of executive actions. Although none of this activity has directly impacted retailers and other U.S. businesses yet, it’s only a matter of time. As the new administration begins its quest to eliminate or roll back federal regulations, your day-to-day operations will surely be affected.

What, exactly, can you expect to see action on over the next four years? And what can you do during this “wait and see” period?

Here are two key issues that should be on your radar – and some proactive steps you can take during the transition:

1) Minimum wage

Many retailers rely on part-time and entry-level employees, and start them at minimum wage. The last nationwide increase, which raised the rate to $7.25, was in July 2009. Though that may be good news for your payroll budget, you shouldn’t consider this a “lock.” In the absence of any movement at the federal level for nearly eight years, more than 60 percent of states have bumped up their minimum wages. Not only do most states have a higher minimum wage than the federal rate, but a third of those states have minimum wages close to or above $10.

Why the discrepancy? Looking back, a two-term deadlock between the Obama administration and a Republican Congress caused a slowdown of the federal legislative agenda. This led many state lawmakers to enact their own legislation. Looking forward to 2017 and beyond, a Republican Congress is unlikely to make a move on the federal minimum wage, which will likely stimulate more state activity.

The following states have new minimum wage limits (effective Jan. 1, 2017, in most cases):

State New Minimum Wage
Alaska $9.80
Arizona $10.00
Arkansas $8.50
California $10.50 (if employ 26 or more employees)
Colorado $9.30
Connecticut $10.10
District of Columbia $12.50 (effective July 1, 2017)
Florida $8.10
Hawaii $9.25
Maine $9.00
Maryland $9.25 (effective July 1, 2017)
Massachusetts* $11.00
Michigan $8.90
Missouri $7.70
Montana $8.15
New Jersey $8.44
New York Varies, based on location
Ohio $8.15
Oregon Varies, based on location (effective July 1, 2017)
South Dakota $8.65
Vermont $10.00
Washington $11.00

In addition, you now need to keep abreast of cities and counties issuing their own local-level minimum wages. Besides major urban centers such as New York City, San Francisco, Seattle and Chicago taking action, a handful of cities and counties in other states have set higher minimums.

2) Other labor law issues in limbo

Next, we need to consider the Trump campaign agenda and Secretary of Labor nominee Andrew Puzder’s public opposition to several current Department of Labor regulations. In addition to supporting the current federal minimum wage, Puzder opposes the pending FLSA overtime rule that would have affected more than 4 million workers nationwide. Currently delayed by a temporary injunction, the overtime rule will most likely be dropped altogether. Also on the chopping block are new paid sick leave requirements for employees of federal contractors and the controversial Affordable Care Act (ACA).

As with the minimum wage, state and local lawmakers may fill the void caused by federal inactivity or deregulation. For example, paid sick leave laws already exist with varying requirements in seven states, the District of Columbia and more than 25 cities. And one of the ACA solutions being discussed involves moving control to the states. For each action or development, retailers should prepare for a similar or possibly more complex reaction from other regulators.

What to do next

So, where does all this leave you and your business? During this time of uncertainty, take stock and update your current practices so you know more about your starting point when it’s time to make a move.

  • Conduct an internal audit of your employment practices to gauge your compliance with current federal, state and local regulations. I recognize this can be particularly tricky if you have several locations across states, cities or counties with unique requirements, but this review is essential for an accurate benchmark.
  • Address any problem areas that require a change of policies or practices. For example, when the minimum wage varies at the federal, state or local level, you must provide the rate most beneficial to employees for any given business location. This is a time-and-pay requirement under FLSA, which must be followed to the letter of the law.
  • Display local minimum wage postings in addition to mandatory federal and state postings. Even if the rates conflict, you must include all related postings in your workplace posting center.
  • Going forward, either assign internal resources or rely on an outsourced partner for monitoring compliance. Deregulation at the federal level may or may not impact your requirements — depending on your locations and business practices — but the rapid pace of state and local employment laws demands extra diligence. You may need a reliable and experienced partner to monitor changing laws and provide new or updated workplace postings and other human resources tools, as necessary.

Susan Drenning is President of ComplyRight, which creates practical solutions to help employers streamline administrative tasks and simplify compliance with federal, state and local labor laws. Since 2003, Drenning has led the ComplyRight team through ongoing investment in compliance expertise, technology development and customer-centered innovation. She has a passion to serve the true, small business and enjoys answering customer calls and assisting customer success specialists during busy periods.

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