CRMA 121 Report – July Part II

Chicago City Council Ordinance and Resolution Introductions

INTRODUCTIONS

 

ORDINANCE – CHANGING TIP CREDIT FROM A FLAT RATE TO A PERCENTAGE OF THE CHICAGO MINIMUM WAGE

Sponsors: Alderman Edward M. Burke (14th Ward) and Ald. Margaret Laurino (39th Ward)

Committee: Workforce Development and Audit

 

When Chicago’s starting wage was implemented in 2015, the choice was made to maintain the IL standard of establishing a different system of pay for tipped employees than what is mandated for non-tipped employees. Tipped employees are paid a flat rate per hour that is lower than non-tipped employees because they make up the difference through collecting tips from customers for their service. To the extent that the employee does not earn enough in tips to clear $12/hour (the current minimum wage in Chicago), the employer is required to pay the employee the difference.

This proposal seeks to change the way that tipped employees are paid from the current flat rate to a percentage of Chicago’s Minimum Wage. Framing this as an empowerment issue for women, the proposal emphasizes that 70% of restaurant servers are women and suggests that if these employees were less reliant on tips, they might experience less harassment and abuse from customers, co-workers and management. The change would essentially make the employer responsible for paying a higher base wage, therein making the tipped employee less reliant on tips. If this proposal were to pass, the employer would pay 70% of the Minimum Hourly Wage which works out to $8.40/hour (up from the current $6.25) and would increase annually in proportion to the increased minimum wage for non-tipped employees.

 

ORDINANCE – BAN ON COMMERCIAL USE OF FACIAL GEO-MAPPING FOR NON-SECURITY PURPOSES 

SPONSOR: Ald. Edward M. Burke (14th Ward) 

COMMITTEE: Finance

This proposal would permit commercial businesses to use facial recognition technology only upon agreement with the Chicago Police Department and only if signage is posted alerting customers that such technology is being used. The information can be used for security purposes only and cannot be shared or sold to other commercial entities. Since 2008, the state of IL has had the Biometric Identification Privacy Act (BIPA) which allows biometric data to be collected only after a person has signed an agreement and several disclosures have been provided by the business. It has been the subject of many lawsuits and a virtual boon to the trial bar.

While BIPA makes it extremely difficult to use facial recognition technology in IL for commercial purposes, this proposal would ban all activity unless it is related to security pursuant to an agreement between the business and CPD and subject to approval by the city’s Corporation Counsel. But it is our understanding that signing an agreement with CPD could give them some authority over the technology and its use, or at the very least the opportunity to access the technology.

 

ORDINANCE – LIMITATIONS ON THE USE OF CONSTRUCTION EQUIPMENT IN THE CBD

SPONSOR: Ald. Brendan Reilly (42nd Ward)

COMMITTEE: Health and Environmental Protection

This proposal would prohibit the operation of certain gas or electric-powered construction machinery in the Central Business District between the hours of 8pm-8am as well as prohibit such activity within 1100 ft. of any residential building or hospital during the same hours. Fines have been increased.

 

ORDINANCE – BAN ON THE USE OF PLASTIC STRAWS AND STIRRERS AT CITY-OPERATED LOCATIONS

Sponsors: Ald. Edward M. Burke (14th Ward) and Ald. Raymond Lopez (15th Ward)

Joint Committees: Finance and Aviation

Pointing to the growing awareness of waste products in our oceans and waterways, this proposal was introduced to prohibit establishments on city owned and/or operated properties from selling or giving away plastic straws and stirrers. Such items if sold or used would need to be biodegradable. Members will note that Chairman Burke introduced a proposal to have a question on the November ballot asking the public if the city should ban plastic straws altogether.

 

ORDINANCE – LICENSING POP-UP RESTAURANTS AND RETAIL LOCATIONS

SPONSOR: Mayor Rahm Emanuel 

COMMITTEE: License and Consumer Protection 

This proposal is needed to encourage retail and restaurant entrepreneurs to try out their new concepts by “popping up” in a vacant storefront and operating for a limited amount of time. While Chicago has had its share of pop up locations for years, the regulations have not always been clear. This proposal will clarify what both the entrepreneurs and land owners must do in order to have a pop-up shop lawfully operating in the city. Licenses can last as short as 5 days and as long as 180 days depending on the use. If the space will have food, it will need to be prepared in a shared kitchen or licensed and regulated kitchen which can be on premises or at a separate location. In certain instances the host property will need a license as will the user. We encourage you to talk with your landlord if you are interested in operating a pop-up shop to ensure that each party has procured the necessary permits. The city is excited about being able to allow these innovative concepts with minimal interference from City Hall.

 

PASSED LEGISLATION

ORDINANCE – DELIVERIES BY COMMERCIAL VEHICLES IN LOADING ZONES

SPONSOR: Ald. Brendan Reilly (42nd Ward)

As deliveries increase, especially in already congested areas of the city, it has become a priority to ensure that commercial loading zones are used purely for servicing local businesses and that commercial vehicles don’t remain parked in a loading zone indefinitely while attempting to service an entire neighborhood. Therefore, to keep traffic moving and to continue to provide space for all of the necessary deliveries, this ordinance will limit standing time to 30 minutes for pick-ups and deliveries in curb loading zones unless the signage has a different time allotted. Hazard lights must be flashing while parked in the loading zone.

EFFECTIVE DATE: September 19, 2018

 

The Chicago City Council does not meet in the month of August.
The next meeting of the full Council will be on Thursday, September 20, 2018.

CONTACT

Tanya TricheTanya Triche Dawood
Vice President, General Counsel
Illinois Retail Merchants Association
312-726-4600
ttrichedawood@irma.org

121 CRMA Report – July 2018

Chicago City Council Ordinance and Resolution Introductions

 

INTRODUCTIONS

RESOLUTION – TASKFORCE TO STUDY A CHICAGO GUARANTEED INCOME PROGRAM AND THE VIABILITY OF A CHICAGO EARNED INCOME TAX CREDIT

Sponsor: Ald. Ameya Pawar (47th Ward), Ald. Derrick Curtis (18th Ward), Ald. Roderick Sawyer (6th Ward) and 33 additional co-signers)

Committee: Workforce Development and Audit

Entitled the “Chicago Resilient Family Initiative”, this resolution seeks to create a taskforce that would study two issues. First, it would research and develop a Universal Basic Income (UBI) model for 1000 families that could be provided with a minimum of $500/month that could be used for any purpose. UBI, also known as “guaranteed income” is being tested in other countries. Specifically, the Netherlands, Canada and Iran are all running pilot programs for segments of their populations. Finland (which ran a program in 2017) is ending its program among concerns about its actual benefits. In the US, a pilot program is currently running in Oakland, CA. Such programs are being explored partly in response to the automation of the workforce, which is beginning to leave sectors of the workforce unemployed. The thought is if people are guaranteed an income, then it might allow them to be creative in how they will contribute to an economy that is quickly becoming more automated.

The second initiative would be to “smooth” EITC payments currently received by the 1000 test families from an annual lump sum payment , to distributing those payments on a monthly basis instead. There has been some research into this issue which studies the premise that if low-income families were allowed to access the money in smaller sums on a more frequent basis, they would possibly accumulate less debt over time, as their budgets would experience less volatility. In addition, this initiative would consider the viability of Chicago creating its own version of EITC.

The taskforce would deliver a report to the committee by October 1, 2018.

 

RESOLUTION – PUBLIC QUESTION REGARDING BANNING THE USE OF PLASTIC STRAWS

Sponsor: Edward M. Burke (14th Ward)

Committee: Committees, Rules and Ethics

 

In advance of the next election to be held on November 6, 2018, the City Council considers 3 questions to present to the public for consideration on the ballot. The responses will produce non-binding results, but are generally used to check the temperature of Chicagoans on hot-button issues. We have seen these questions turn into ordinances depending on the response. The first two questions consider whether future marijuana sales should be directed to the public school system and mental health services, and whether the city should urge the state to push for an additional homeowner’s tax exemption.

The third question asks if the use of plastic straws should be banned in the city. This is a hot issue around the country as there has been a push in the environmental advocacy community to ban the straws that it says has damaging effects to marine life. Seattle recently banned food service businesses from using and giving away plastic straws, utensils and cocktail picks in favor of compostable products. Seattle also mandates and provides residential composting services for a fee.

ORDINANCE – SIGNS IN OVERLAY DISTRICTS

SPONSOR: Ald. Proco Moreno (1st Ward)

COMMITTEE: Zoning, Landmarks and Building Standards

 

This proposal would allow signs in overlay districts that exceed the size limit to exist without a permit as long as the ordinance specifically waives the area/height restrictions.

 

ORDINANCE – $15 MINIMUM WAGE

SPONSORS: Ald. Proco Moreno (1st Ward), Ald. Ameya Pawar (47th Ward), Ald. Scott Waguespack (32nd Ward) and 8 additional co-sponsors

COMMITTEE: Workforce Development and Audit

 

This would amend Chicago’s Minimum Wage ordinance which is scheduled to increase to $13.00/hour on July 1, 2019 and then scheduled to increase with inflation thereafter. The proposal would increase the wage to $15/hour instead of $13/hour and continue to increase annually with inflation.

The proposal came out at the same time as a study was produced regarding the first two increases of Chicago’s minimum wage. The study claims that there was essentially no effect on the local economy as a result of those increases and subsequently advocates for a higher minimum wage in the city, at the state level and for the 80+ municipalities in Cook County that opted out of an increase in the minimum wage to now opt in. The premature study either de-emphasizes or outright fails to account for what the Mayor has done to achieve record tourism levels which have helped to take the sting out of rising costs to employers, attract headquarter moves, and shift more manufacturing and retail opportunities to the south side. In addition, the Mayor has attempted to encourage growth in development in neighborhoods by shifting money from downtown projects to specific areas of the city that have had challenges with attracting commercial growth. The study equates the growth in transportation and warehouse jobs to the minimum wage and not to the obvious reason, a significant change in the way consumers make purchases…through e-commerce. The advocate community would have you believe that minimum wage increases, on their own, have no effect on the economy. But people paying close attention to how the economy actually works know that there have to be other policy decisions made to help ensure that employers are able to continue profitability in the wake of significant government mandates. The Mayor has worked to help create opportunities for growth in the wake of more mandates.

It is difficult to draw conclusions from the first two years of the minimum wage increase, when the increase is going up fairly significantly for three years in a row that are not included in the study. We are monitoring this issue carefully.

 

ORDINANCE – DIVERSITY BID INCENTIVE

SPONSORS: Ald. Sophia King (4th Ward), Ald. Pat Dowell (3rd Ward), Ald. Walter Burnett (27th Ward) and 29 additional co-sponsors

COMMITTEE: Budget and Government Operations

This proposal would change bid preferences for contracts valued at $100,000 or more for bidders that agree to hire a larger base of city residents, or if the bidder agrees to hire a larger base of city residents of socio-economically disadvantaged areas.

 

ORDINANCE – PERMITTING OF SANDWICH BOARD SIGNS

SPONSORS: Ald. Scott Waguespack (32nd Ward), Ald. Proco Moreno (1st Ward), Ald. Leslie Hairston (5th Ward) and 25 additional co-sponsors

COMMITTEE: License and Consumer Protection

 

One of the best ways to attract attention to small, neighborhood stores and restaurants is through the use of small, removable signs set out on the sidewalk right by the door of the business. They catch the eye of passers-by, and are an inexpensive way to advertise specials likely to draw in more customers. Such signs have been used in the city for many years, although technically, the signs are unlawful. There have been a number of attempts over the years to change the law to allow these signs to no avail. This current proposal would allow business owners to have such signs as long as they first seek a permit and have proof of insurance. There are size, location and appearance restrictions for the signs.

 

ORDINANCE – DELIVERIES BY COMMERCIAL VEHICLES IN LOADING ZONES

SPONSOR: Ald. Brendan Reilly (42nd Ward)

COMMITTEE: Transportation and Public Way

 

As deliveries increase, especially in already congested areas of the city, it has become a priority to ensure that commercial loading zones are used purely for servicing local businesses and that commercial vehicles don’t remain parked in a loading zone indefinitely while attempting to service an entire neighborhood. Therefore, to keep traffic moving and to continue to provide space for all of the necessary deliveries, an amendment is being proposed that would limit standing time to 30 minutes for pick-ups and deliveries in curb loading zones.

 

ORDINANCE – HOURS OF OPERATION FOR OUTDOOR PATIOS IN THE CBD

SPONSOR: Ald. Brendan Reilly (42nd Ward)

COMMITTEE: Licensing and Consumer Protection

 

Ald. Reilly has introduced his annual ordinance to temporarily extend the hours of operation for outdoor patios in the Central Business District. Such establishments will be able to sell/serve alcohol for immediate consumption until midnight until December 1, 2018.

 

ORDINANCE – RESTRICTIVE SCHEDULING

SPONSOR: Ald. John Arena (45th Ward), Ald. Susan Sadlowski Garza (10th Ward), Ald. Derrick Curtis (18th Ward) and 27 additional co-sponsors

COMMITTEE: Workforce Development and Audit

 

This is the same proposal that was sent out to the membership earlier by email with a detailed description of how it proposes to mandate how employees are scheduled, sets out a system of penalty pay for changes made by an employer after a schedule has been issued (while allowing employees to change schedules freely after those schedules have been issued), mandates premium pay for employees that close and open, (even if they desire to work that kind of schedule), and takes away an employer’s ability to designate how many part-time employees will be on staff at any given time. It also purports to add an exemption for businesses that employ less than 50 employees (more than likely added as a tacit admission that the mandate is far too complicated and expensive for most businesses to comply with), but that exemption is far from clear as it mentions that the 50 employees must be “in the aggregate” in any location. We do not understand how the term “in the aggregate” can refer to an individual location, but we presume that the advocates will clarify at some point.

 

ORDINANCE – EXTENSION OF SIDEWALK CAFÉ PERMITS AND FEE REDUCTION FOR CERTAIN BUSINESS LICENSES

Sponsor: Mayor Rahm Emanuel

Committee: License and Consumer Protection

 

This proposal would allow sidewalk café permits to be valid for one year, instead of the 9 month permit that currently exists. If people want to sit out in the snow in January…so be it! It would extend the operation dates to all permits issued for the 2018 season.

In addition, the Mayor is proposing to reduce the fee for new, two-year business licenses from the current $250 to $125 for all licenses issued between July 1, 2018-June 30, 2019.

 

PASSED LEGISLATION

RESOLUTION – RECONFIGURATION OF STANDING COMMITTEES OF THE CITY COUNCIL

Sponsor: Alderman Edward M. Burke (14th Ward)

EFFECTIVE IMMEDIATELY

 

With the recent retirement of Ald. Michael Zalewski (23rd Ward), the City Council reconfigured the membership of some of its standing committees to create new Chairmanships and to ensure that the new Alderman of the 23rd Ward, former State Representative Silvana Tabares, was granted membership to committees. Of the committees in which CRMA has frequent interaction, the following changes were made:

 

Committee on Aviation

The new Chair is Ald. Matt O’Shea (19th Ward). Ald. Nicholas Sposato (38TH Ward) moved from Vice Chair to member, and Ald. Gilbert Villegas (36th Ward) moved to Vice Chair.

 

Committee on the Budget and Government Operations

Ald. Tabares replaces Ald. Zalewski.

 

Committee on Committees, Rules and Ethics

Ald. Tabares replaces Ald. Zalewski.

 

Committee on Economic, Capital and Technology Development

Ald. Tabares replaces Ald. Zalewski.

 

Committee on Finance

Ald. Zalewski is replaced by Ald. Michael Scott, Jr. (24th Ward)

 

Committee on Health and Environmental Protection

Ald. Tabares replaces Ald. Zalewski

 

Committee on Human Relations

Ald. Raymond Lopez (15th Ward) becomes Vice Chair and Ald. Tabares is added to the committee.

 

Committee on Workforce Development and Audit

Ald Tabares replaces Ald. Zalewski.

Tanya TricheCONTACT:

Tanya Triche Dawood
vice President, General Counsel
Illinois Retail Merchants Association
312-726-4600
ttrichedawood@irma.org

121 CRMA Report – June 2018


SUBSTITUTE PROPOSAL FORTHCOMING

Members will recall that a proposal was introduced in Chicago’s City Council in June of 2017 that would accomplish the following: regulate how employers create and issue employee schedules, create a system for paying employees that are either sent home early or have their shifts cancelled, mandate that current employees be offered shifts before a new employee is hired and bar employees from closing the store and then opening the next morning.
That proposal has sat dormant since its introduction in the Council’s Rules Committee.
It is our understanding, after having a number of conversations in the past few weeks, that at tomorrow’s Council meeting, a substitute proposal will be introduced to limit the scope of the original proposal. Right now, the proposal applies to all employees making less than $50,000/year. The substitute would possibly limit the proposal’s application to employers that have more than 50 employees, and of those employers the proposal would apply to employees making less than $50,000/year.
If this is true, then that would mark an interesting change in policy for the city which included no such exemptions for the minimum wage and paid sick leave ordinances.
It has become clear that the UFCW, the labor union behind the proposal, has increased contact with Aldermen in the last few weeks and that they indeed plan to make this issue a factor for the upcoming 2019 Mayoral and Aldermanic elections. There are some Aldermen that have had recent success in attracting new restaurants into their wards, and they are concerned that the current proposal will hurt those businesses, so they want to exempt them.
We will take a good read of whatever is introduced tomorrow and send it to you for your thoughts. For our part, IRMA is continuing its discussions with Aldermen on this issue and working with like-minded business groups to defeat the proposal.
We will be in further contact with you shortly.

This Week in Springfield – 100-34

END OF SESSION REPORT
BUDGET
LABOR
TAXES
PHARMACY
CONSUMER PROTECTION
TOBACCO
LIQUOR
FOOD
LICENSING
CANNABIS
MISCELLANEOUS

IRMA END OF SESSION REPORT

 

Illinois lawmakers are gearing up for the general elections this November. It is midterm elections on the federal level and historically midterms are where the party that is not in control of the White House makes some significant gains. This often leads to a “wave” of enthusiasm of various strength at the state level.  Conventional wisdom believes an anti-Trump, and in Illinois an anti-Rauner, wave will bolster any national Democratic wave. In states like Illinois this means that Republicans could be pushed further into the minority. As such, Illinois Democrats have been introducing populist legislation and “wedge” issues that attempt to put Republican lawmakers on bad votes they can use against them in the November elections.  This election year tactic generally leads to ant-business initiatives and this year was no exception.

There have been over 12,000 bills filed this Assembly. This does not include amendments. In the past, a number of bills were held in the House Rules Committee. This General Assembly, every bill was assigned to a substantive committee in large part to blunt criticism from the Governor that Speaker Michael Madigan, D-Chicago did not allow the House or Senate to consider proposals.

Below are bills of consequence to the retail industry that passed both chambers and will now be sent to the Governor for his consideration.


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BUDGET

 

With rarely seen bi-partisan margins in favor, the Fiscal Year 2019 budget was approved by the Assembly as contained in HB 109 (Rep. Gregory Harris, D-Chicago/Sen. John J. Cullerton, D-Chicago) the appropriation bill, and HB 3342 (Rep. Gregory Harris, D-Chicago/Sen. Heather Steans, D-Chicago) the Budget Implementation Bill (BIMP). It is a full-year budget for FY ’19 and a supplemental budget for FY ’18 to cover the inadequacies of the current year’s budget. The budget contains no tax increases. Revenues come from anticipated higher tax revenues from a growing economy, $200 million in fund transfers, $800 million in sweeps from various administrative funds, and over $400 million in pension reforms.  Some lawmakers and pundits contend that it is actually $1.5 billion short.

The pension changes are voluntary so they rely upon an estimation of the number of people in the pension system who will exercise the options. The pension changes are: (1) a buy-out for vested, inactive members who are now employed somewhere other than the state but have not retired. They will be offered a buyout at 60% of the value of their pensions (estimated savings = $41 million); (2) A buyout of the 3% annual cost-of-living-adjustment for Tier 1 pensioners (estimated savings = $382 million over time); and, (3) reduced salary spiking cap from 6% to 3% meaning any salary increases over 3% will be covered by local government employers.

The budget negotiations started months ago with the formation of a bi-partisan budget working group including representatives of the Governor’s office. The framework agreed to by these legislators was then moved to the four leaders and the Governor who made some adjustments and finalized the budget.

It is an $80 billion budget, which includes federal monies, but the real focus is on the portion paid from General Revenue Funds which totals $38.5 billion. Here are some highlights:

  • Elementary and secondary education received an increase of $402 million as compared to FY ’18. TWIS readers will recall that last year, a comprehensive reform of the funding formula was enacted but it requires $350 million in additional monies each year for the next 10 years. Due to the fact a supplemental budget for FY ’18 was included in the budget deal, that $350 million threshold was met for the first two years.
  • Higher education received an increase of $60 million. In addition, a $25 million scholarship fund (AIM HIGH) was created to provide tuition assistance to in-state students wanting to continue their education at in-state institutions of higher learning. This $25 million must be matched by the various institutions.
  • Human service entities are funded including a 50-cent per hour wage increase for caregivers who work with developmentally disabled individuals, substance abuse providers, mental health providers, etc. Human service spending totals $13.835 billion of the GRF budget but even more goes to human services as a result of federal funds.
  • Public safety spending will cover two mental health treatment facilities and two life skills re-entry facilities as well as a new State Police cadet class.
  • A $2.9 billion pay-as-you-go capital program as well as nearly $9 billion to fund IDOT’s FY 19 road program.
  • Nearly $64 million in back wages owed to state employees. These cost of living increases were originally frozen by the Governor’s Office but a court ordered them to be paid.
  • A temporary reimbursement bridge for pharmacies with 10 or fewer locations in counties with less than 50,000 in population. This is a result of the shockingly low reimbursements being seen as a result of the Medicaid managed care rollout.
  • The sunset for on-line lottery is extended for another year. The new private lottery manager, Camelot, will assume control July 1st so this gives them time to put a program in place and recommend changes they would like to see. .
  • Prohibits cost of living increases for legislative and executive elected officials and appointees.
  • The bill backlog could be reduced by up to $1 billion under the provisions of SB 2858 producing additional interest savings to the state.

The Governor has already signed the budget into law.

IRMA POSITION: NEUTRAL

CANNABIS

SB 336 (Sen. Don Harmon, D-Oak Park/Rep. Kelly Cassidy, D-Chicago)  creates the Alternative to Opioids Act of 2018 which amends the Compassionate Use of Medical Cannabis Pilot Program Act by extending the legal use of medical marijuana to individuals who would conventionally be prescribed opioids. This would grant people who suffer from chronic pain, but not necessarily any of the conditions laid out in the current law, access to marijuana – with a prescription.

In addition to expanding medical marijuana access for patients and doctors seeking alternatives to opioid painkillers, SB 336 would also remove a barrier for Illinoisans who have a criminal record, a restriction put in place as part of Illinois’ original medical marijuana law. In the 2017 fiscal year, the Illinois Department of Public Health denied 635 requests for medical marijuana from qualifying patients. Some of these denials were made solely on the basis of failed background checks. SB 336 does away with such background checks and thus allows more individuals to access appropriate medical treatment. It also provides an avenue for a provisional card while an individual awaits a permanent card. This is in response to the nearly 6 month backlog for qualifying patients.

The bill passed with bipartisan majorities in the House with a vote of 72-38-1 and Senate with a vote of 44-3.

IRMA POSITION: SUPPORT


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CONSUMER PROTECTION

Rebate Cards Dormancy ChargesHB 4922 (Rep. Theresa Mah, D-Chicago/Sen. Cristina Castro, D-Elgin) which is intended to prohibit the issuance of product rebate cards that charge dormancy or other post-issuance fees. The initiative only applies to rebate cards that can be used at multiple merchants. It exempts those closed-looped merchant cards that are distributed and used at one retailer. The language only applies to multi-store cards utilized for rebates after the consumer completes the rebate submission process.

HB 4922 passes the House with a 67-44 vote and the Senate by a 35-17 vote.

IRMA POSITION: NEUTRAL

Credit FreezeHB 4095 (Rep. Greg Harris, D-Chicago/Sen. Bill Cunningham, D-Chicago) provides that a consumer reporting agency may not impose a charge on a consumer for placing a freeze, removing a freeze, or temporarily lifting a freeze. This is in the wake of the Equifax breach where reporting agencies were requiring consumers to pay a fee to lift the freeze on their reports.

IRMA POSITION: NEUTRAL

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FOOD

Food Service Sanitation Managers Certification (FSSMC)HB 5011 (Rep. Ryan Spain, R-Peoria/Sen. David Koehler, D-Peoria) grandfathers the FSSMC’s that were approved prior to last year’s passage of the legislation that removed the redundant state certification and fee on food retailers.  Last year, IRMA convinced lawmakers to remove the redundant state food certification and accompanying unnecessary fee on food retailers.  IDPH complied but has refused to acknowledge the expiration date of current FSSM certificates. This has required some employees to retake the federal tests before the expiration of the current 5 year certificates.  HB 5011 would grandfather those FSSM certificates approved before the change in the law.

HB 5011 was approved unanimously in the House by a vote of 111-0 and the Senate by a vote of 55-0.

IRMA POSITION: SUPPORT

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LABOR

Pay History—Similar legislation that was vetoed by the Governor and failed to be overridden by the Senate last year passed the House with by a vote of 87-24 and the Senate by a vote of 31-16-1.  Despite an avenue for compromise offered by the business community, the advocates chose to pursue the same path traveled before.

HB 4163 (Rep. Anna Moeller, D-Elgin/Sen. Christine Castro, D-Elgin) prohibits an employer from asking an employee about previous wage, salary and other compensation.  It also erodes the current statutory defenses for Illinois employers while expanding the statutory penalties.  While IRMA has, from the beginning, agreed to prohibit the question as long as there are common sense exemptions (e.g. employee already works for the business or salary is a matter of public record), IRMA remains opposed to arbitrarily restricting Illinois’ employer’s current limited defenses and increasing current statutory penalties.  Especially when the penalties provide more “protection” for prospective employees who would potentially be asked a question in violation of the proposed legislation than current employees who are paid less in violation of the current statute—a perplexing quirk that seems to undermine the proponents own stated purpose for the bill.

Illinois currently only has three defenses to an unequal wage claim (1) seniority system; (2) merit system; and (3) a system that measures earnings by quantity or quality of production. The advocates argue that limiting the current defenses and increasing the penalties will deter employers from violating the Equal Pay Act. In the past 11 years (excluding 2010 and 2011 where there is no available data), under the current limited defenses, there have been only 51 recorded violations of the Equal Pay Act. In that same time period, approximately 707 investigations were conducted by the Illinois Department of Labor. Less than 7.5% of all claims in the last 11 years have resulted in a violation.  According to the U.S. Small Business Administration there are over 1.2 million businesses in Illinois. Assuming that a different company was responsible for each violation only .0000425% of Illinois businesses have been responsible for an Equal Pay Act violation in 11 years.  This is a 99.9999575% compliance rate.

Despite this compliance rate, some business associations, led by IRMA, were willing to take a proactive step to support expanding the current Equal Pay Act to prohibit an employer from asking about a prospective employee’s wage and salary. A year ago, these associations suggested using a compromise that was accepted by all parties in Massachusetts that included an affirmative defense for employers. Since that time, Oregon, Delaware, California, and Puerto Rico have passed legislation prohibiting asking about an employee’s previous wage and salary. Oregon and Puerto Rico have adopted the Massachusetts model. So three of the five major jurisdictions support a compromise model.  Additionally, this model has been introduced in Rhode Island, Connecticut, Montana, Georgia, and Texas. Despite over 700 investigations over the past 11 years of available data, 99.99% of all Illinois employers have already proven to be compliant with the current law.

IRMA and a coalition of businesses went further and offered to remove the affirmative defense, passed in other states, from the legislation and just prohibit an employer from asking the question.  The current penalties would remain the same and apply to a violation of the new prohibition. This language is reflected in SB 3100 (Sen. Jennifer Bertino-Tarrant, D-Plainfield). This additional compromise was also rejected by the proponents.

It stands to reason that a reasonable compromise would be to take a proactive step forward by prohibiting the salary inquiry while recognizing the overwhelming majority of Illinois businesses have proven to promote and support both men and women in the workforce.

After the legislation passed the Senate, the sponsor filed a Motion to Reconsider. Therefore the Senate will hold the legislation and release it closer to the election in order to force the Governor to act. In other words, the Democrats are using HB 4163 as a “wedge” issue in an attempt to put the Governor in politically compromising position.

IRMA POSITION: OPPOSED

Employee ExpensesSB 2999 (Sen. Patricia Van Pelt, D-Chicago/Rep. Melissa Conyears-Irvin, D-Chicago) requires an employer to reimburse an employee for all necessary expenditures or losses incurred by the employee directly related to services performed for the employer. Necessary expenses” include all reasonable expenditures or losses including, but not limited to, uniforms, equipment, vehicle expenses, electronic devices such as cell phones, tablets, and computers, and any other expenditures or losses an employer requires an employee to incur in direct consequence of the discharge of employment duties. An employer is not liable under this Section unless the employer knew or had reason to know that the employee incurred the expenditure or loss.

This legislation is consistent with federal law. SB 2999 passed the Senate by a vote of 50-2 and the House by a vote of 114-1.

IRMA POSITION: NEUTRAL

Attorney General Worker Protection Unit SB 193 (Sen. Kwame Raoul, D-Chicago)/Rep. Jay Hoffman, D-Belleville) allows the Attorney General (AG) to simultaneously litigate or re-litigate an issue that is being investigated or has already been adjudicated by the Illinois Department of Labor (DOL).  This would include claims under the Prevailing Wage Act, the Employee Classification Act, the Minimum Wage Law, the Day and Temporary and the Labor Services Act, and the Wage Payment and Collection Act.  Under current law the (DOL) investigates and adjudicates claims under these Acts.  Once the claim is adjudicated, the DOL may forward the judgement to the AG for enforcement.  SB 193 would allow the AG the power to simultaneously investigate and bring suit against an employer. As such, an employer could be responsible for both a DOL and AG investigation and lawsuit. Additionally, the AG may re-litigate a case the DOL has already ruled upon.  For instance, if the DOL rules in favor of a business and closes the case and the AG is not satisfied with the outcome, the AG may independently open the case and re-litigate the complaint.

SB 193 passed the House with a 69-47 and the Senate with a 35-16 vote.  The Governor has already vetoed the legislation. Neither chamber reached the 3/5 majority required to override the Governor’s veto.

IRMA POSITION: OPPOSED

Nursing Mother’s ActHB 1595 (Rep. Katie Stuart, D-Collinsville/Sen. William R. Haine, D-Alton) requires an employer to provide for reasonable break time during the first year after the child’s birth each time the employee needs to express milk. The break time may run concurrently with any break time already provided to the employee. An employer may not reduce an employee’s compensation for time used for the purpose of expressing milk or nursing a baby. An employer shall provide reasonable break time as needed by the employee unless to do so would create an undue hardship as defined by the Illinois Human Rights Act.

HB 1595 passed the House by a vote of 104-0 and the Senate by a vote of 49-0.

IRMA POSITION: NEUTRAL

Equal Pay African Americans –HB 4743 (Rep. LaShawn Ford, D-Chicago/Sen. Kimberly Lightford, D-Chicago) provides that no employer may discriminate between employees by paying wages to an African-American employee at a rate less than the rate at which the employer pays wages to another employee who is not African-American for the same or substantially similar work on a job that requires equal skill, effort, and responsibility and is performed under similar working conditions.

IRMA supports ensuring that any individual regardless of gender, race, sexual orientation, etc. receives the same consideration as any other individual when it comes to equal pay. The issue, however, is one of textbook discrimination which is already illegal under the Illinois Human Rights Act, the Civil Rights Act of 1963, Equal Employment Opportunity Commission guidelines regarding compensation discrimination, and the current Illinois Equal Pay Act which covers all minorities while not singling out one race.

HB 4743 passed the House by a vote of 66-11 and the Senate by a vote of 53-0.

IRMA POSITION: OPPOSED as drafted.

 

Human Rights “Expansion”—Currently, the Illinois Human Rights Act only applies to businesses with 15 or more employees. HB 4572 (Rep. Will Guzzardi, D-Chicago/Sen. Christine Castro, D-Elgin) would expand the coverage of the Act to apply to any business with one or more employees. The “Act” prohibits discrimination in Illinois with respect to employment, financial credit, public accommodations, housing and sexual harassment, as well as sexual harassment in education.

The legislation passed the House with a 64-37 vote and the Senate by a 33-13 vote.

IRMA POSITION: NEUTRAL


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LICENSING

 

Barber Pre-Graduation TestingSB 2877 (Sen. Chuck Weaver, R-Peoria/ Rep. Rita Mayfield, D-Chicago)/ HB 4883 (Rep. Rita Mayfield, D-Chicago/ Sen. Chuck Weaver, R-Peoria) allows students to take their state barber or cosmetology licensure examination after completing 80% of their educational studies. If someone fails their licensure examination while still enrolled in school, they can more easily get the extra help they need to pass the exam the second time and be formally licensed. Even if choosing to take the pre-graduation examination, individuals would still be required to complete their educational studies to ensure they obtain all statutorily required hours of study similar to every other licensure applicant. This is an initiative of IRMA having been brought to it by members in this part of the retail industry.

SB 2877 and HB 4883 both passed the General Assembly unanimously.

IRMA POSITION: SUPPORT

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 LIQUOR

 

Liquor Control CommissionSB 3022 (Sen. Tony Munoz, D- Chicago/Rep. Lou Lang, D-Skokie) seeks to undo a reform made by former Governor Rod Blagojevich who undertook a reorganization of several agencies that included moving the Illinois Lottery, Gaming Commission, and Liquor Control Commission (ILCC) under the Illinois Department of Revenue (IDOR). Today, only the ILCC remains under IDOR. Retailers and others long-chaffed under an ‘independent’ ILCC believing it was strongly tilted toward the interests of the wholesale tier of the three-tier system. There is a belief that by having ILCC under the auspices of IDOR has restored at least some semblance of balance which is appropriate as the ILCC is supposed to be a neutral arbiter and regulator.

Nevertheless, the legislation passed the Senate by a vote of 52-3 and passed the House by a vote of 92-12-1.

IRMA POSITION: OPPOSED

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MISCELLANEOUS

 

DronesSB 3291 (Sen. James Clayborne, D-East St. Louis/Rep. Marcus Evans, D-Chicago) would preempt home rule municipalities from passing regulations on the use of drones or unmanned aerial systems (UAS).  The Federal Aviation Authority (FAA) retains the authority to regulate private and commercial drone use. Despite this authority, local municipalities have been introducing ordinances that regulate drones.

The Federal Aviation Authority (FAA) has created rules for both commercial and private drone use and has made it clear that the FAA’s rules preempt local and state jurisdiction regarding the regulation of drones. Additionally, in 2015, Illinois created the Illinois Unmanned Aerial System Oversight Taskforce, to which IRMA was appointed, to provide oversight and input in creating comprehensive laws and rules for the operation and use of drone technology within Illinois. The Taskforce’s final report indicated that the state should provide guidance within the FAA guidelines and however well-intentioned, overly burdensome local regulations that discourage or unnecessarily obstruct the otherwise safe and lawful use of UAS should be avoided.

Per the Taskforce’s recommendations, SB 3291 would give the state, and specifically the Division of Aeronautics within the Department of Transportation, the authority to regulate drones in compliance with FAA guidelines.

The legislation passed the Senate by a 52-0 vote and the House by a 112-4 vote.

IRMA POSITION: SUPPORT

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PHARMACY

 

Pharmaceutical DisposalHB 1338 (Rep. Jonathan Carroll, D-Buffalo Grove/Sen. Julie A. Morrison, D-Deerfield) amends the Safe Pharmaceutical Disposal Act by providing that “unused medication” means any unopened, expired, or excess medication that has been dispensed for patient or resident care and that is in a liquid or solid form (rather than in just a solid form). It excludes medications contained in intraperitoneal solutions from language prohibiting a health care institution, or any employee, staff person, contractor, or other person acting under the direction or supervision of a health care institution, from discharging, disposing of, flushing, pouring, or emptying any unused medication into a public wastewater collection system or septic system.

With the rise of the opioid crisis, lawmakers are looking for new ways to combat the health epidemic.

IRMA POSITION: NEUTRAL

Pharmacy PrescriptionsSB 3170 (Sen. Steve Stadelman, D-Rockford/Rep. Litesa E. Wallace, D-Rockford amends the Pharmacy Practice Act and the Illinois Food, Drug and Cosmetic Act to provide that a prescription for medication other than controlled substances shall be valid for up to 15 months from the date issued for the purpose of refills, unless the prescription states otherwise.

The legislation passed the Senate by a vote of 46-0 and the House by a vote of 101-0.

IRMA POSITION: NEUTRAL

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TAXES

 

Online Sales Tax – SB 2577 (Sen. Christine Castro, D-Chicago/Rep. Anna Moeller, D-Elgin) provides that if a retailer or serviceman makes a sale to purchaser in Illinois from outside of Illinois, then that retailer or serviceman is considered to be “maintaining a place of business in this State” if (1) the cumulative gross receipts from sales of service to purchasers in Illinois are $150,000 or more; or (2) the retailer or serviceman enters into 200 or more separate transactions for sales of service to purchasers in Illinois.

The legislation was modeled after the South Dakota law that is currently being reviewed by the United States Supreme Court. SB 2577 passed the Senate by the 39-10-1 vote and has been sent to the House for consideration.

SB 2577 did not pass the House but it was included in the budget agreement that has been signed by the Governor.

IRMA POSITION: SUPPORT

 

Progressive Income Tax—On a partisan roll-call, Illinois House lawmakers narrowly passed a nonbinding resolution to replace Illinois’ current flat tax with a graduated or progressive income tax system.  Proponents argue that House Resolution 1052 provides for a fairer and progressive way for the state to generate revenue by reducing taxes on the middle and low class while increasing taxes on those some consider ‘rich’.  While the proponents of the resolution believe a graduated income tax is more equitable, the resolution did not provide for any suggested or specific rates.  Opponents of the resolution pointed out that the states that have progressive income taxes have higher rates for lower and middle class than Illinois’ current flat rate.

The nonbinding resolution passed the House with by a narrow margin of 61-52.

IRMA POSITION: OPPOSE

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TOBACCO

 

Tobacco 21SB 2332 (Sen. Julie Morrison, D-Deerfield/Rep. Camille Lilly, D-Chicago) prohibits anyone below the age of 21 from purchasing tobacco from a licensed Illinois retailer while removing any penalties for the underage possession or consumption of tobacco.  The initiative passed the Senate with a vote of 35-20-0 and initially failed to pass the House with a vote of 56-54-1.  But on a second try, the initiative passed the House by a vote of 61-49-1.

SB 2332 makes it legal  for a person under the age of 21 to: (1) possess tobacco, (2) consume tobacco, (3) sell tobacco, (4) buy tobacco from an unlicensed Illinois retailer or individual, or (5) buy tobacco from a licensed out-of-state retailer or online.  Additionally, the bill protects unlicensed, unregulated, and, untaxed individuals selling tobacco to minors while prohibiting licensed retailers from selling tobacco products to anyone below the age of 21.

Raising the age from 18 to 21 may not make as big of a difference as lawmakers hope, given that most smokers — nine out of 10 according to the Surgeon General— have already begun smoking by the age of 18. Additionally, the vast majority obtain their tobacco products from older family and friends. Three out of four minor smokers will become adult smokers.  Ironically, SB 2332 may actually encourage this behavior by removing the current statutory penalties for underage use and consumption of tobacco.

Moreover, advocates argue that the brain is still developing until the age of 21 and a person under that age cannot be expected to fully understand the decision they are making when choosing to use tobacco products. This makes an interesting argument since persons under age 21, among other things, are allowed to become a lawmaker, vote, join the military, enter into legally binding contracts, drive, serve on a jury, sue someone, get a tattoo or piercing, become a blood or organ donor, adopt a child, etc.  What makes this even more ironic is that some of the very same Illinois lawmakers that support this line of thinking also support lowering the age of voting to 16.

Finally, financially the “Tobacco 21” prohibition can easily be compared to what Illinois already knows about heavy handed regulation of tobacco products—it drives business and tax dollars to other states while creating a thriving black market in Illinois. For instance, Illinois has already experienced an outmigration of tobacco sales due to the high tobacco taxes. A Commission on Government Forecasting and Accountability (COGFA) report in 2006 found that after raising the tax on cigarettes the number of legal packs purchased in Illinois has fallen approximately 21% and prompted consumers to look elsewhere to purchase their cigarettes, such as bordering states, the Internet, or through illegal vendors.  Again in 2013, after another round of regulation, COGFA reported tobacco sales tax revenue was short of the projected return by $130 million as consumers purchased tobacco from bordering states, online, and illegal sources.  Not surprisingly, the Illinois Department of Revenue (IDOR) estimates $48 million in lost tax revenue to the state as a result of people finding alternative purchasing avenues (e.g. other states or the black market). Raising the age of the purchase of tobacco is just an additional incentive to exacerbate the current trend without any proven tangible benefit.

It is unclear whether the Governor will or will not sign the legislation.

IRMA POSITION: OPPPOSED

 

Tobacco Records and Unstamped CigarettesSB 3141 (Sen. Karen McConnaughay, R-West Dundee/Rep. Mike Zalewski, D-Riverside) prohibits a taxpayer from introducing into evidence any books or records within 5 days of a hearing.  It also shifts the burden on the retailer by creating a prima facie presumption that a retailer has violated the statute if the retailer cannot produce records upon request. It also shifts the burden on the retailer by creating a prima facie presumption that a retailer is dealing in unstamped cigarettes if unstamped cigarettes from an unlicensed distributor are found on the premises.  Finally, it prohibits the sale of ‘loosies’ by requiring that cigarettes be sold in packages of 20 or 25. IRMA reached agreement with the Sponsor and IDOR to remove IRMA’s opposition.  The legislation passed the Senate by a vote of 52-0 and the House by a vote of 78-35-1.

IRMA POSITION: NEUTRAL

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This Week in Springfield – 100-33

IN THIS ISSUE:

BUDGET
PRE-JUDGEMENT LIENS
PAY HISTORY
EMPLOYEE EXPENSES
NURSING MOTHER’S ACT
PHARMACY BENEFIT MANAGERS
TOBACCO 21
FOOD SERVICE SANITATION MANAGERS CERTIFICATE
LIQUOR CONTROL COMMISSION”>
DRONES
PROGRESSIVE INCOME TAX

The Second Spring Session of the 100th General Assembly adjourned on schedule with a full-year budget agreed to by both parties and final action on numerous items.

Budget

With rarely seen bi-partisan margins in favor, the Fiscal Year 2019 budget was approved by the Assembly as contained in HB 109 (Rep. Greg Harris (D-Chicago)/ Sen. John Cullerton (D-Chicago), the appropriation bill, and HB 3342 (Rep. Greg Harris/Sen. Heather Steans (D-Chicago), the Budget Implementation Bill (BIMP). It is a full-year budget for FY ’19 and a supplemental budget for FY ’18 to cover the inadequacies of the current year’s budget. The budget contains no tax increases. Revenues come from anticipated higher tax revenues from a growing economy, $200 million in fund transfers, $800 million in sweeps from various administrative funds, and over $400 million in pension reforms.

The pension changes are voluntary so they rely upon an estimation of the number of people in the pension system who will exercise the options. The pension changes are: (1) a buy-out for vested, inactive members who are now employed somewhere other than the state but have not retired. They will be offered a buyout at 60% of the value of their pensions (estimated savings = $41 million); (2) A buyout of the 3% annual cost-of-living-adjustment for Tier 1 pensioners (estimated savings = $382 million over time); and, (3) reduces salary spiking cap from 6% to 3% meaning any salary increases over 3% will be covered by local government employers.

The budget started months ago with the formation of a bi-partisan budget working group including representatives of the Governor’s office. The framework agreed to by these legislators was then moved to the four leaders and the Governor who made some adjustments and finalized the budget.

It is an $80 billion budget but the real focus is on the portion paid from General Revenue Funds which totals $38.5 billion. Here are some highlights:

  • Elementary and secondary education received an increase of $402 million as compared to FY ’18. TWIS readers will recall that last year, a comprehensive reform of the funding formula was enacted but it requires $350 in additional monies in each year for the next 10 years. Due to the fact a supplemental budget for FY ’18 was included in the budget deal, that $350 million threshold was met for the first two years.
  • Higher education received an increase of $60 million. In addition, a $25 million scholarship fund (AIM HIGH) was created to provide tuition assistance to in-state students wanting to continue their education at in-state institutions of higher learning. This $25 million must be matched by the various institutions.
  • Human service entities are funded including a 50-cent per hour wage increase for caregivers who work with developmentally disabled individuals, substance abuse providers, mental health providers, etc. Human service spending totals $13.835 billion of the GRF budget but even more goes to human services as a result of federal funds.
  • Public safety spending will cover two mental health treatment facilities and two life skills re-entry facilities as well as a new State Police cadet class.
  • A $2.9 billion pay-as-you-go capital program as well as nearly $9 billion to fund IDOT’s FY 19 road program.
  • Nearly $64 million in back wages owed to state employees. These cost of living increases were originally frozen by the Governor’s Office but a court ordered them to be paid.
  • A temporary reimbursement bridge for pharmacies with 10 or fewer locations in counties with less than 50,000 in population. This is a result of the shockingly low reimbursements being seen as a result of the Medicaid managed care rollout.
  • The sunset for on-line lottery is extended for another year. The new private lottery manager, Camelot, will assume control July 1st so this gives them time to put a program in place and recommend changes they would like to see. .
  • Prohibits cost of living increases for legislative and executive elected officials and appointees.
  • The bill backlog could be reduced by up to $1 billion under the provisions of SB 2858 producing additional interest savings to the state.

The budget has been sent to the Governor for his consideration.

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Pre-Judgement Liens

HB 4324 (Rep. Emanuel Chris Welch, D-Westchester/Sen. Kimberly Lightford, D-Chicago) originated from a union-funded group known as the Raise the Floor Alliance. As introduced, HB 4324 would allow any employee to file a lien against an employer’s real and personal property simply on the basis that the employee believes he or she has a valid wage claim against the employer.  The lien would have taken precedence over almost any other lien or judgment, including mortgages, and could have been filed for single employee wage claims that amount to several hundred dollars in damages and/or class action lawsuits and representative wage claims that allege millions of dollars in damages. Filing a lien of such significance without first proving the merit of their allegations would have subjected employers to constant extortion in order to avoid dealing with a lien on their property.

A business and banking coalition led by IRMA worked with Rep. Chris Welch and Rep. Jay Hoffman (D-Belleville) to reach an agreement ultimately adopted in House Floor Amendment #2 that addresses the issues presented by the advocates.  Currently, the Department of Labor (DOL) is taking 18 months to adjudicate a claim. The agreed upon language requires the DOL to adjudicate wage claims within 30 days of receiving the claim. This would address the issue of unscrupulous companies dissolving, reorganizing, or disappearing before a claim is adjudicated. If the company is found guilty, exhausts its appeals, and still does not pay, a lien will be placed on it assets according to current lien practices.  Finally, if a claim is verified, an employer will be required to submit an escrow of 10% of the claim for the duration of the 30 day adjudication. If, after the 30 days the employer is found innocent, the funds will be returned to the employer.  This agreement passed the House by a vote of 88-3.

The proponents of the legislation filed Senate Committee Amendment #1 in an attempt to renegotiate the terms of the bill by removing the time limit on the escrow account in contravention of the original agreement. While the bill with the amendment passed the Senate by a vote of 31-18-1, Rep. Welch filed a motion to non-concur as a result of the non-agreed amendment.

IRMA would like to thank Rep. Welch and Rep. Hoffman for their leadership on this issue.

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Pay History

Similar legislation that was vetoed by the Governor and failed to be overridden by the Senate last year passed the House with by a vote of 87-24 and the Senate by a vote of 31-16-1.  Despite an avenue for compromise offered by the business community, the advocates chose to pursue the same path traveled before.

HB 4163 (Rep. Anna Moeller, D-Elgin/Sen. Christine Castro, D-Elgin) prohibits an employer from asking an employee about previous wage, salary and other compensation.  It also erodes the current statutory defenses for Illinois employers while expanding the statutory penalties.  While IRMA has, from the beginning, agreed to prohibit the question as long as there are common sense exemptions (e.g. employee already works for the business or salary is a matter of public record), IRMA remains opposed to arbitrarily restricting Illinois’ employer’s current limited defenses and increasing current statutory penalties.  Especially when the penalties provide more “protection” for prospective employees who would potentially be asked a question in violation of the proposed legislation than current employees who are paid less in violation of the current statute—a perplexing quirk that seems to undermine the proponents own stated purpose for bill.

Illinois currently only has three defenses to an unequal wage claim (1) seniority system; (2) merit system; and (3) a system that measures earnings by quantity or quality of production. The advocates argue that limiting the current defenses and increasing the penalties will deter employers from violating the Equal Pay Act. In the past 11 years (excluding 2010 and 2011 where there is no available data), under the current limited defenses, there have been only 51 recorded violations of the Equal Pay Act. In that same time period, approximately 707 investigations were conducted by the Illinois Department of Labor. Less than 7.5% of all claims in the last 11 years have resulted in a violation.  According to the U.S. Small Business Administration there are over 1.2 million businesses in Illinois. Assuming that a different company was responsible for each violation only .0000425% of Illinois businesses have been responsible for an Equal Pay Act violation in 11 years.  This is a 99.9999575% compliance rate.

Despite this compliance rate, some business associations, led by IRMA, were willing to take a proactive step to support expanding the current Equal Pay Act to prohibit an employer from asking about a prospective employee’s wage and salary. A year ago, these associations suggested using a compromise that was accepted by all parties in Massachusetts that included an affirmative defense for employers. Since that time, Oregon, Delaware, California, and Puerto Rico have passed legislation prohibiting asking about an employee’s previous wage and salary. Oregon and Puerto Rico have adopted the Massachusetts model. So three of the five major jurisdictions support a compromise model.  Additionally, this model has been introduced in Rhode Island, Connecticut, Montana, Georgia, and Texas. Despite over 700 investigations over the past 11 years of available data 99.99% of all Illinois employers have already proven to be compliant with the current law.

IRMA and a coalition of businesses went further and offered to remove the affirmative defense, passed in other states, from the legislation and just prohibit an employer from asking the question.  The current penalties would remain the same and apply to a violation of the new prohibition. This language is reflected in SB 3100 (Sen. Jennifer Bertino-Tarrant, D-Plainfield). This additional compromise was also rejected by the proponents. SB 3100 passed the Senate Executive Committee by a 13-1-2 vote and sits on 3rd Reading in the Senate.

It stands to reason that a reasonable compromise would be to take a proactive step forward by prohibiting the salary inquiry while recognizing the overwhelming majority of Illinois businesses have proven to promote and support both men and women in the workforce.

IRMA would like to thank Sen. Jennifer Bertino-Tarrant and all Senators who were willing to find common-sense, fact-driven compromise. HB 4163 now goes to the Governor for his consideration.

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Employee Expenses

SB 2999 (Sen. Patricia Van Pelt, D-Chicago/Rep. Melissa Conyears-Irvin, D-Chicago) requires an employer to reimburse an employee for all necessary expenditures or losses incurred by the employee directly related to services performed for the employer. Necessary expenses” include all reasonable expenditures or losses including, but not limited to, uniforms, equipment, vehicle expenses, electronic devices such as cell phones, tablets, and computers, and any other expenditures or losses an employer requires an employee to incur in direct consequence of the discharge of employment duties. An employer is not liable under this Section unless the employer knew or had reason to know that the employee incurred the expenditure or loss.

This legislation is consistent with federal law. SB 2999 passed the Senate by a vote of 50-2 and the House by a vote of 114-1.  The legislation will be forwarded to the Governor for his consideration.  IRMA is neutral with the legislation and would like to thank Sen. Van Pelt and Rep. Conyears-Irvin for their work with the business community on this issue.

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Nursing Mother’s Act

HB 1595 (Rep. Katie Stuart, D-Collinsville/Sen. William R. Haine, D-Alton) requires an employer to provide for reasonable break time during the first year after the child’s birth each time the employee needs to express milk. The break time may run concurrently with any break time already provided to the employee. An employer may not reduce an employee’s compensation for time used for the purpose of expressing milk or nursing a baby. An employer shall provide reasonable break time as needed by the employee unless to do so would create an undue hardship as defined by the Illinois Human Rights Act.

HB 1595 passed the House by a vote of 104-0 and the Senate by a vote of 49-0.  The legislation will be sent to the Governor for his signature.  IRMA is neutral.

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Pharmacy Benefit Managers

HB 3479 (Rep. Sara Feigenholtz, D- Chicago/Sen. Andy Manar, D- Bunker Hill) initially sought to provide significant new reimbursements to pharmacy. The cost of doing so was over $200 million and legally questionable as it would have meant unilaterally changing the contracts negotiated and signed by the managed care organizations.  With these questionable requirements, the House passed the legislation by a vote of 87-16-1 while recognizing changes would be needed as the legislation worked its way through the process.  As a result, Senate Amendment #5 was filed and took a different approach by, seeking to regulate PBM’s, require the reporting of certain reimbursement information to the State, regulate PBM audits of pharmacies, and prohibit gag clauses and the ability of PBM’s to use the Medicaid contract and the contract serving state employees to force pharmacies to participate in other unrelated contracts.

HB 3479 remains on second reading so that the parties can continue to discuss the issues over the summer.

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Tobacco 21

SB 2332 (Sen. Julie Morrison, D-Deerfield/Rep. Camille Lilly, D-Chicago) prohibits anyone below the age of 21 from purchasing tobacco from a licensed Illinois retailer while removing any penalties for the underage possession or consumption of tobacco.  The initiative passed the Senate with a vote of 35-20-0 and initially failed to pass the House with a vote of 56-54-1.  After some political trading took place the initiative passed the House by a vote of 61-49-1.

As currently drafted SB 2332 makes it legal  for a person under the age of 21 to: (1) possess tobacco, (2) consume tobacco, (3) sell tobacco, (4) buy tobacco from an unlicensed Illinois retailer or individual, or (5) buy tobacco from a licensed out-of-state retailer or online.  Additionally, the bill protects unlicensed, unregulated, and, untaxed individuals selling tobacco to minors while prohibiting licensed retailers from selling tobacco products to anyone below the age of 21.

Raising the age from 18 to 21 may not make as big of a difference as lawmakers hope, given that most smokers — nine out of 10 according to the Surgeon General— have already begun smoking by the age of 18. Additionally, the vast majority obtain their tobacco products from older family and friends. Three out of four minor smokers will become adult smokers.  Ironically, SB 2332 may actually encourage this behavior by removing the current statutory penalties for underage use and consumption of tobacco.

IRMA is opposed to the bill which will drive sales away from licensed retailers to illegal sellers and to out-of-state retailers which will reportedly, according to the Department of Revenue, cost the state $48 million a year.

SB 2332 will now be sent to the Governor for his consideration. It is unclear whether the Governor will or will not sign the legislation.

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Food Service Sanitation Managers Certification (FSSMC)

HB 5011 (Rep. Ryan Spain, R-Peoria/Sen. David Koehler, D-Peoria) grandfathers the FSSMC’s that were approved prior to last year’s passage of the legislation that removed the redundant state certification and fee on food retailers.  Last year, IRMA convinced lawmakers to remove the redundant state food certification and accompanying unnecessary fee on food retailers.  IDPH complied but has refused to acknowledge the expiration date of current FSSM certificates. This has required some employees to retake the federal tests before the expiration of the current 5 year certificates.  HB 5011 would grandfather those FSSM certificates approved before the change in the law.

HB 5011 was approved unanimously in the House by a vote of 111-0 and the Senate by a vote of 55-0.  It has been sent to the Governor for his consideration where he is expected to sign the legislation. IRMA supports the legislation.

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Liquor Control Commission

SB 3022 (Sen. Tony Munoz, D- Chicago/Rep. Lou Lang, D-Skokie) seeks to undo a reform made by former Governor Rod Blagojevich who undertook a reorganization of several agencies that included moving the Illinois Lottery, Gaming Commission, and Liquor Control Commission (ILCC) under the Illinois Department of Revenue (IDOR). Today, only the ILCC remains under IDOR. Retailer and others long-chaffed under an ‘independent’ ILCC believing it was strongly tilted toward the interests of the wholesale tier of the three-tier system. There is a belief that by having ILCC under the auspices of IDOR has restored at least some semblance of balance which is appropriate as the ILCC is supposed to be a neutral arbiter and regulator.

Nevertheless, the legislation passed the Senate by a vote of 52-3 and passed the House by a vote of 92-12-1.  SB 3022 now goes to the Governor for his consideration.  IRMA is opposed to the legislation.

 Drones

SB 3291 (Sen. James Clayborne, D-East St. Louis/Rep. Marcus Evans, D-Chicago) would preempt home rule municipalities from passing regulations on the use of drones or unmanned aerial systems (UAS).  The Federal Aviation Authority (FAA) retains the authority to regulate private and commercial drone use. Despite this authority local municipalities have been introducing ordinances that regulate drones.

The Federal Aviation Authority (FAA) has created rules for both commercial and private drone use and has made it clear that the FAA’s rules preempt local and state jurisdiction regarding the regulation of drones. Additionally, in 2015, Illinois created the Illinois Unmanned Aerial System Oversight Taskforce, to which IRMA was appointed, to provide oversight and input in creating comprehensive laws and rules for the operation and use of drone technology within Illinois. The taskforce’s final report indicated that the state should provide guidance within the FAA guidelines and however well-intentioned, overly burdensome local regulations that discourage or unnecessarily obstruct the otherwise safe and lawful use of UAS should be avoided.

Per the taskforce’s recommendations, SB 3291 would give the state, and specifically the Division of Aeronautics within the Department of Transportation, the authority to regulate drones in compliance with FAA guidelines.

The legislation passed the Senate by a 52-0 vote and the House by a 112-4 vote. SB 3291 now goes to the Governor for his consideration.  IRMA supports the legislation.

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Progressive Income Tax

 

On a partisan roll-call, Illinois House lawmakers narrowly passed a nonbinding resolution to replace Illinois’ current flat tax with a graduated or progressive income tax system.  Proponents argue that House Resolution 1052 provides for a fairer and progressive way for the state to generate revenue by reducing taxes on the middle and low class while increasing taxes on those some consider ‘rich’.  While the proponents of the resolution believe a graduated income tax is more equitable the resolution did not provide for any suggested or specific rates.  Opponents of the resolution pointed out that the states that have progressive income taxes have higher rates for lower and middle class than Illinois’ current flat rate.

 The nonbinding resolution passed the House with by a margin of 61-52.

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