Illinois – This Week in Springfield 100-13

COMPENSATION HISTORY
PROMPT PAYMENT
CARRYOUT BAG FEES
CATFISH
FOOD HANDLING

This Week In Springfield negotiations in the Senate over a “grand bargain” continued while non-budget proposals continued to be debated.

COMPENSATION HISTORY

 

The Senate Labor Committee passed HB 2462 (Rep. Anna Moeller, D-Elgin/Sen. Daniel Biss, D-Skokie) by a partisan vote of 10-5 that would prohibit a business from viewing, asking about or requesting the previous salary, wage, benefits or other compensation of any applicant for employment.  This is intended to address the concern that gender discrimination is continuously perpetuated by businesses based on salary history. The initiative was drafted and introduced by Women Employed and the Sargent Shriver National Center on Poverty Law.  The Illinois Department of Labor demonstrated that while unequal pay claims do occur they are not as prevalent as the proponents claim.  The proponents blame the lack of claims on current business “loopholes” in the current unequal pay statute. These “loopholes” are completely non-discriminatory factors in determining possible reasonable differences in wages such as merit or seniority that are used and shared in every state.  In order to address these alleged loopholes, the legislation includes a vague two prong ‘differential’ test and alternative employment practice standard—meaning if an employee can show an alternative practice exits anywhere in the United States for a similar job an employer may not use factors such as seniority or merit system to apply a wage offer defense. These are only a few of the many issues presented in the legislation.

HB 2094 (Rep. Norine Hammod, R-Macomb) and SB 1039 (Sen. Mike Connelly, R-Naperville) are supported by the business community and prohibits an employer from asking about previous wage and salary, unless the salary is public knowledge, the prospective employee is a current employee of the hiring employer, and the prospective employee voluntary provides his/her salary. The legislation also incentives employers to review all of their hiring practices and make reasonable progress towards eliminating pay differentials. Despite addressing the core concern of the proponents of HB 2462 and including reasonable exceptions and incentivizing elimination pay differentials, both HB 2094 and SB 1039 have been disregarded.

Regardless, there are some outstanding legal questions regarding the issues surrounding prohibiting an employer from asking a prospective employee about previous wage and salary.  The City of Philadelphia passed an ordinance with similar language that prohibits an employer from asking a prospective employee about their previous wage and salary. Subsequent to passage, a lawsuit was filed in federal court on the grounds that the ordinance violates the First Amendment and the Commerce Clause of the United States Constitution.  If adopted, the Illinois statue would face the same deficiencies.  The statute prohibits a business from asking a simple question which in of itself does not discriminate or harm an individual so would not rise to the time, place, manner analysis which must be content-neutral, be narrowly drawn, serve a significant government interest, and leave open alternative channels of communication.  Additionally, the statute impacts commerce that takes place outside of Illinois boundaries. For instance, if a Missouri resident is interviewed in Missouri for a job in Illinois, does the statue apply? Or vice-versa, if an Illinois resident is interviewed in Illinois for a job in Missouri does the statute apply? If the answer is yes, then the statute arguably attempts to control activity outside of Illinois’ border and is subject to a federal Commerce Clause analysis. Additionally, this week the 9th U.S. Circuit Court of Appeals in California cited a 1982 ruling by the court that said employers could use previous salary information as long as they applied it reasonably and had a business policy that justified it.

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PROMPT PAYMENT

Ideally, entities providing services to the state (e.g. Medicaid providers, medical providers serving state employees under the state health insurance program, etc.) would be paid in 30-days or less. It is not unreasonable for a vendor to be paid promptly for the services they render. As this is written, the State of Illinois owes its vendors nearly $13 billion and that total is growing at over $8,000 per minute.

When the State of Illinois fails to pay its vendors ‘promptly’ (i.e. within 90-days), the state begins to incur interest at the rate of 1% per month or 12% a year if debt reaches that maturity. The State Prompt Payment Act is designed to ensure the state’s vendors are not abused. The Act is supposed to provide a serious financial incentive to the state to be a good partner.

SB 2202 (Sen. Dan McConchie, R-Lake Zurich) proposes to reduce the current prompt payment interest by two-thirds. While it would not take effect until July 1, 2018, it would have the perverse effect of encouraging the state to abuse their vendors through non-payment and encourage additional fiscal mismanagement.

IRMA testified in opposition to the proposal which was narrowly held in the Senate Executive Committee.

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CARRYOUT BAG FEES

About 5 years ago, after months of discussions with the sponsor, Senator Terry Link (D-Gurnee) and the environmental community, IRMA and our industry partners agreed to support a bill that would have implemented a statewide plastic bags recycling mandate.  The bill would have required the plastic bag manufacturers to develop a recycling program throughout the most populous areas of the state that would have afforded customers easily accessible ways to recycle plastic carryout bags as well as plastic wrap instead of throwing these items into landfills or allowing them to become a nuisance.  The bill was passed by both chambers, but was vetoed by then Governor Pat Quinn.  At the time, the Governor, encouraged by a 10 year old student from the northern suburbs of Chicago, argued that the recycling mandate didn’t go far enough to address the waste and litter issue.  A later attempt to override the veto failed.

Last year, the parties were called together by the Senator Link to try again.  Considering the changing landscape of the price of oil, it was determined that a recycling mandate would be too expensive to run and would place an undue financial burden on the business community.  Moreover, the environmental community decided that plastic bag bans were actually not effective.  So, the business community placed another offer on the table.  This time, at the behest of the environmental community which was now in favor of fees for all non-reusable carryout bags,  business suggested that a fee be placed on plastic and paper bags with the fee split between the retailer and the local jurisdiction. The caveat was that the local jurisdiction would have to use their portion of the fee to support a household hazardous waste program (HHW).  The HHW would have a significant positive environmental impact in that it would allow communities to collect other hard to recycle products like latex paint, carpet and even mattresses.  The environmental community went silent on the proposal.

In the interim, the city of Chicago passed a 7-cent tax on all non-reusable bags which has now been in effect for almost 4 months.  Preliminary results from the tax have shown a significant reduction in the use of carryout bags by about 40%.  Now, Senator Link has asked the parties to talk again to see what can be agreed to this legislative session. After some brief discussion, he introduced SB 1597 Amendment #2 (Sen. Terry Link, D-Gurnee).  The bill creates a model ordinance that local jurisdictions can opt to adopt.  The ordinance would place a 5 cent fee on all non-reusable bags, prohibit local jurisdictions from further regulating auxiliary containers, allow a split of the fee with 3 cents going to the local jurisdiction to be used to fund the HHW and with 2 cents to go to the retailer.  It would not be a mandate as a local jurisdiction would have to pass an ordinance to adopt the fee, but it would create one standard way to address bags and other containers.  The environmental community testified against the measure as they like the concept but are concerned about the preemption on the further regulation of auxiliary containers.  Such a preemption can be found in a number of other states that have laws on bags.  The Senator agreed to keep working with both sides on an amendment to bring back to the committee for further consideration.

IRMA testified in support of the bill.  With the agreement to come to the committee with an additional amendment, the bill passed out of the Senate Environment and Conservation with a vote of 6-1-0.

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CATFISH

SB 312 Amendment #2 (Sen. Emil Jones, III, D-Chicago) will give the state Department of Public Health and local departments of public health the authority to check restaurant invoices to ensure that if catfish is featured on the restaurant’s menu, the restaurant can prove that it received catfish from a federally regulated processor or manufacturer.  The sponsor has concerns that catfish served in some fried fish restaurants and soul food restaurants around the state are selling Vietnamese catfish, which must be labeled “Swai” according to federal law, but are labeling it “Catfish” on the restaurant menu.  If a consumer complaint is filed with the Department of Public Health, the inspector will check the invoices of the restaurant to see if it can prove that it indeed purchased catfish.  If proof can’t be produced, then the restaurant will be given time to correct the menu.  If the restaurant fails a second inspection, then a fine will be issued.  Further violations could result in suspension of the restaurant’s license.

Since it is already federal law to label catfish products correctly, IRMA was able to negotiate the details of the bill with Sen. Jones.  The bill passed out of the Senate Agriculture Committee with a vote of 10-0-0.  It will now move to the Senate floor for further consideration.

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FOOD HANDLING

 

HB 3684 (Rep. Kelly Burke, D-Oak Lawn/Sen. David Koehler, D-Peoria) removes an obsolete fee paid by restaurant and grocery retail workers. It passed the Senate Public Health Committee by a vote of 6-0.  Illinois is one of only a few states that require a separate food handling certificate and fee in addition to the national food handling certificate. Currently, under Illinois law, an individual must complete an Illinois Department of Public Health (IPDH) approved training program and then pass an exam provided by an accredited exam provider. Once the individual pays for and passes the exam and receives the national certificate, he/she is required to electronically send the national certificate to the state and pay an additional $35 for a redundant Illinois-specific certificate. When the Food Handling Regulation Enforcement Act was initially implemented, Illinois drafted, maintained, amended, mailed and graded their own examination. As such, an administrative justification existed for an additional fee. This Illinois specific exam no longer exists, therefore the administrative expenses no longer exist.

The legislation now moves to the Senate floor for consideration.

IRMA would like to thank Sen. David Koehler and all the members of the Senate Public Health for supporting this initiative.

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Illinois -This Week in Springfield – 100-12

FINANCIAL INFORMATION
THE CONSUMER’S RIGHT TO KNOW

This Week in Springfield, the Senate was in session while the House spend the week back in their districts.

FINANCIAL INFORMATION

 

Efforts by a for-profit company to gain access to the confidential tax information of businesses was discussed again this week at a joint subject-matter hearing of the House Cities and Villages and Revenue and Finance committees. IRMA testified in opposition along with the Taxpayers Federation of Illinois, CPA Society, Illinois Department of Revenue (IDOR), and Illinoi State Chamber of Commerce.

Currently, municipalities operating under a signed agreement with IDOR, can obtain from IDOR a list of employers in their jurisdiction with the following information: business name, business address, the amount of sales tax distributed to the municipality from sales at that business as part of the municipalities 1% share of the 6.25% State sales tax; the amount of sales tax distributed to the municipality from sales at that business as the result of any locally imposed sales tax administered by the Department; and a listing of all registered businesses located within the municipality by account ID number and address. The financial information is protected by strict confidentiality agreements imposed by IDOR. This is necessary because tax information is highly sensitive.

Last year, legislation was twice defeated in the Senate that sought to allow municipalities to share this information with third-parties. This year, House Amendment #1 and Amendment #2 to HB 2717 seek to not only allow municipalities to share this information with third-parties but allow the third-parties to access complete financials as well as potentially share the information with other third-parties. Just as it did last year during the testimony of the proponents, it became abundantly clear that the only information they need is the address which is currently available free-of-charge from IDOR. The municipalities can obtain this information from IDOR as often as they would like to receive it and it can be compared to other free resources (e.g. property tax rolls) to ensure the taxes businesses collect and remit are being returned by IDOR to the proper municipality.

It was noted that every professional national tax administrators group condemns the practice of contingency-fee type-audits as they pollute the process. The current practice ensures fairness as an audit process can just as easily come out in favor of the taxpayer as the goal of IDOR is the correct payment of tax. Contingency-fees incent reckless estimates and remove the incentive to find or report items that favor the business (e.g. over-payment, missed credits or deductions). If the concern is that IDOR is not properly administering something, the appropriate response is oversight of IDOR, not to disclose confidential taxpayer information.

IRMA appreciated the opportunity to testify and provide answers to the various committee members.

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THE CONSUMER’S RIGHT TO KNOW

 

After a long session of meetings in both the House and Senate regarding an unnecessarily broad, cumbersome and ultimately, costly bill to require businesses that sell or share “personal information” about consumers to third-parties, SB 1502 Amendment #4 (Sen. Michael Hastings, D-Frankfort) was passed this week.  This bill will require any company with an online presence that collects data from consumers, to identity the categories of information collected and provide a description of the customer’s rights if such information is shared or sold to 3rd parties.  In addition, the bill requires that companies who share or sell information to third-parties, unless it fits into an exemption, to disclose what information was shared and with whom.  The bill sets out 26 categories of personal information.

We should note that “personal information” doesn’t mean that the information is actually “personally identifiable.”  These are really two different concepts.  Personal information could be a person’s name, or a person’s age or a person’s educational background, etc.  There is no requirement that any of the information be tied to an actual person that could be identified.  For example, if a retailer shares the ages of purchasers of a certain washing machine with its manufacturer, but it doesn’t share the customer’s names or any other information that could identify that person, that information is considered “personal information” in the bill.  Such information would have to be disclosed to the customer, upon customer request, even though the third -party has no idea who the actual customers were that purchased the washing machine.  This is unnecessary time, money and resources spent on providing information that does nothing to further data privacy.

This bill presents a major challenge for companies that have various ends of their business that collect and share data.  For instance, companies that have their own credit cards, loyalty programs, apps, and/or website may collect and share different kinds of data at different times.  Data is also shared in order to conduct surveys with third-party manufacturers of products sold in stores.  All of the data is not kept in one neat box to pull from upon customer inquiry.  Businesses will have to build out a mechanism to search and find data that has been shared regardless of whether that data can actually be used to identify a person.

SB 1502 is loosely based on the state of California’s “Shine the Light” law which is much more narrowly focused in scope.  That law requires disclosure to persons that have an established business relationship if information is shared for direct marketing purposes.  SB 1502 has no such qualifiers.  In fact, instead of using the definition of personal information as defined by the Personal Information Protection Act (PIPA), which requires that personal information actually be personally identifiable, this bill creates a completely new definition by making any piece of information whether tied to a person or offered in the aggregate “personal.”  We would also note that information must be disclosed, even if a person shares the information themselves.  For instance, if a person has a LinkedIn account and they post their picture, name, educational background, etc. for the entire LinkedIn universe to see, a company must disclose if they have also shared the same information that can be found by a simple Google search.  How can information be considered private if a person has publicly shared it about themselves?

Resources that are much better spent actually protecting information that has been collected will now be diverted to building out software programs to respond to Right to Know requests.  Just so readers have an idea of how fired up consumers really are about taking advantage of their right to know, we asked a few large retailers doing business in California to tell us how many people have requested the information in the past year.  The first retailer told us that two people had requested the information, and the second retailer told us that three people had requested the information.  California has just over 34 million residents.

The bill passed out of the Senate with a vote of 31-21-1.  It will now move over to the House for additional consideration.

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121 Report – CRMA – April 2017

In This Issue

Legislative Initiatives

CHICAGO CITY COUNCIL   

ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

HEAD TAX
Sponsors: Ald. Carlos Ramirez Rosa (35th Ward), Ald. Gilbert Villegas (36th Ward), Ald. Proco Joe Moreno (1st Ward) and 15 other co-sponsors
Committee: Committees, Rules and Ethics

This proposal would implement the Employers’ Expense Tax (Head Tax) and funnel the revenue to the Chicago Public School system to support their operations. The tax would be placed on any business that has at least 50 full-time employees or commission merchants. Full-time employees are defined as anyone who accrues at least $1000 in wages in any calendar quarter of a year from the same employer.

The tax, which would be back-dated to April 1, 2017, would be in the amount of $33/month for each commission merchant or full-time employee employed by the employer. The tax cannot be passed on to employees. It must be paid by the employer. In calculating the tax, the employer shall not include any employees that are permanent residents of a City of Chicago Community Area listed in the top 20 for incidences of violent crime in the previous calendar year as listed in the hardship index created by the UIC Great Cities Institute.

The tax is temporary. It would sunset after two years with the final payment due on July 1, 2019.

IRMA is OPPOSED.

 

ALDERMANIC RECOMMENDATIONS FOR BUSINESS LICENSES

Sponsors:  Ald. Greg Mitchell (7th Ward), Ald. Michelle Harris (8th Ward), Ald. Willie Cochran (20th Ward) and 14 additional co-sponsors

Committee:  License and Consumer Protection

This proposal would give Aldermen an opportunity to give their recommendation on whether a business should be granted a license by the Department of Business Affairs and Consumer Protection. Currently, once an applicant submits their information to the department, that information is shared with other relevant departments or boards for investigation and inspection. The proposal calls for that information to then be passed along to the local Alderman who will then have 20 days to submit a recommendation on whether the license should be approved. If an Alderman does not recommend approval, the Alderman must submit the reasons for the negative recommendation in writing to the Commissioner.

It is our understanding that the Alderman is concerned about businesses that have their license taken away for various ordinance violations and/or illegal activity and those same businesses are re-opened within a week under a different LLC, but with the same management and employees. The same issues that caused the former business owner to lose their license continue to occur.  We have had initial discussions with the Alderman and expect to continue to work together along with the Mayor’s office to find a workable resolution.

In its current form, IRMA is OPPOSED.

 

EMERGENCY RESTROOM USE
Sponsors: Ald. David Moore (17th Ward), Ald. Ariel Reboyras (30th Ward), Ald. Ricardo Munoz (22nd Ward) and 25 other co-sponsors
Committee: License and Consumer Protection

This proposal would require businesses that have restrooms available for customer use to allow non-patrons to use those facilities in cases of emergency. The proposal does not define qualifying emergencies, nor does it dictate which party determines the emergency.

IRMA is OPPOSED.

 

BAN ON THE SALE AND USE OF COAL TAR SEALANTS
Sponsors: Ald. Scott Waguespack (32nd Ward) and Ald. John Arena (45th Ward)
Committee: Health and Environmental Protection

This proposal would ban the sale and use of coal tar sealants. These sealants are most commonly used in commercial and residential parking lots and driveways. Most retail locations no longer sell sealants with these chemicals. The environmental community has been trying to get a similar bill (HB 2958 Amendment #2) passed in the state legislature, but has been unsuccessful to date.

IRMA is currently determining its position.
PASSED LEGISLATION

 

TOBACCO DEALER ORDINANCE REVISION

Sponsor: Mayor Rahm Emanuel

Periodically, the Mayor’s office takes a look at existing city Code and attempts to modernize various sections to update terms, bring sections up to date with changes in state law, revise definitions to reflect current industry terms, etc. The changes are generally non-substantive in nature, and more an attempt to help re-order things so that it is easier for the affected industry to both understand and comply. The city has decided to re-work the tobacco ordinance, as there have been many changes to the tobacco law in the last few years. As we have been very sensitive to these changes, I reviewed and did not see any substantive changes, but members should review to ensure that they understand what is required of them as tobacco sellers.

EFFECTIVE DATE: July 1, 2017

 

HOURS FOR DOWNTOWN OUTDOOR PATIOS
Sponsor: Alderman Brendan Reilly (42nd Ward)

As in past years, the Code has been temporarily adjusted to allow operators of outdoor patios in the Central Business District to sell and serve alcoholic beverages until midnight for the duration of the outdoor patio season.

EFFECTIVE DATE: May 23, 2017

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The next City Council meeting is scheduled for Wednesday, May 24, 2017.

Tanya TricheTanya Triche Dawood
Vice President Government Affairs/General Counsel
ttrichedawood@irma.org
217-544-1003

 

Illinois – This Week in Springfield – 100-11

TABLE OF CONTENTS:

BUSINESS DAY 2017
THANK YOU
PAID SICK LEAVE
COMPENSATION HISTORY
DATA PRIVACY – RIGHT TO KNOW
DATA PRIVACY – GEOLOCATION INFORMATION
REASONABLE ACCOMMODATION
WORKERS’ COMPENSATION
FOOD ALLERGEN
GUN DEALER LICENSING
CRIMINAL LIABILITY FOR BUILDING OWNERS & MANAGERS
EMPLOYEE TRANSPORTATION BENEFITS PROGRAM

BUSINESS DAY 2017

 

Wednesday, over 300 employers gathered in Springfield for Business Day 2017. The largest gathering of its kind in Illinois brought together employers of all types and sizes from throughout Illinois to share their concerns and hopes for Illinois directly with policy makers.

The day began with a thoughtful and thought-provoking keynote address from political strategist, ABC News contributor and author Matthew Dowd. Mr. Dowd exploded what he perceived as four myths from the last election that the political-class seems to be perpetuating. Those myths are that President Trump is the cause of change (he is the result), that the parties need a candidate like Trump (he won in spite of himself), that this was a change election (voters responded to change that had occurred or was already occurring), and independents can’t win (fastest growing group of voters). Building on the independent theme, which is how Mr. Dowd now identifies himself, he noted that he didn’t mean independents as a party but rather as people within parties who express independence. He posited that President Trump is basically an independent who conducted a successful hostile take-over of the GOP.

Describing that nastiness and tribalism as a virus that started with the Washington, D.C. political class and has spread to all levels, Mr. Dowd offered some prescriptions for what he believes is needed throughout the political system. First, we have to break out of our tribes and choose the whole over the parts. Second, the means of government have to change. The ends do not justify the means. Third, we need humble servant leaders. Fourth, paraphrasing Mahatma Gandhi, what our leaders think, say, and do must be in alignment. Fifth, that voters should look to implement a broad vision from the local level up. Finally, that  we need a common set of facts.

After the luncheon, participants left for the Capitol to meet with Governor Bruce Rauner, Senate President John Cullerton, Speaker of the House Michael Madigan, Senate Republican Leader Christine Radogno, and House Republican Leader Jim Durkin as well as individual members of the House and Senate. Retail attendees shared their thoughts on the impact to their businesses, employees, and customers on the current state fiscal crisis, the combination of locally-imposed taxes as well as coming state taxes combined with a $15 minimum wage, decreasing the penalties for retail theft, paid leave, taxes on individual products like sweetened beverages, and in support of the modernization of Illinois’ telecommunications system.

In the evening, attendees and policymakers attended the “Party Under the Tent” which once again lived up to its billing as the party not-to-be-missed. A rainy day did not dampen enthusiasm nor attendance.

THANK YOU

Thank you to the co-hosts, sponsors and reception sponsors who made Business Day 2017 a resounding success.

CO-HOSTS

SPONSORSRECEPTION CATERS

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PAID SICK LEAVE

 

HB 2771 Amendment #1 (Rep. Christian Mitchell, D-Chicago) is very similar to the ordinances scheduled to take effect in Chicago and Cook County on July 1st except it does not tie in employer-paid FMLA.

The bill will require each employer to implement a system that would allow employees to accrue one hour of paid leave for every 40 hours the employee works.  The employee would be eligible to take up to 5 paid sick days in one 12-month period.  Employees would have to work for at least 180 days in order to be eligible and can take leave due to their own sickness or the illness of anyone that they know who is like family.  Leave can also be taken for school closures and for needs related to incidences of domestic violence.  Instead of offering accrual, the employer can choose to give the paid leave to the employee up-front at the beginning of each 12-month period.  Paid sick days can carry over although an employer is not required to provide more than 5 paid days in a 12-month period.  An employer with a paid time off policy can use that policy in compliance with this mandate as long as the employer offers the minimum requirements of the bill.  Paid sick days do not need to be paid out upon separation.

Employers are concerned that unfunded mandates are being placed upon them in a very uncertain economic time in Illinois.  It is likely that other benefits will be contracted in order to accommodate this mandate, just like we have seen in other jurisdictions that have passed similar legislation.  The small business community has responded to such mandates which come on the heels of unfunded mandates driven by the Affordable Care Act and mandated increases in wages in Chicago and Cook County by decreasing working hours for employees.  The bill passed the House with a vote of 66-051-000 and will move to the Senate.

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 COMPENSATION HISTORY

 

Lawmakers passed HB 2462 (Rep. Anna Moeller, D-Elgin) which prohibits a business from viewing, asking about or requesting the previous salary, wage, benefits or other compensation of any applicant for employment.  This is intended to address the concern that gender discrimination is perpetuated by businesses based on salary history. HB 2462 passed the House by a 091-024-000 vote.

HB 2094 (Rep. Norine Hammod, R-Macomb), which is supported by the business community and mimics current Massachusetts’ law, also prohibits an employer from asking about previous wage and salary, unless the salary is public knowledge, the prospective employee is a current employee of the hiring employer, and the prospective employee voluntarily provides his/her salary. The legislation also incentivizes employers to review all of their hiring practices and make reasonable progress towards eliminating pay differentials. Despite addressing the core concern of proponents and including reasonable exceptions and incentivizing elimination pay differentials, HB 2094 failed to pass the Economic Opportunity Committee by a vote of 6-6.  IRMA looks forward to continuing to work with the stakeholders to reach a common sense agreement.

Regardless of which proposal is ultimately adopted, there are some outstanding legal questions regarding the issues surrounding prohibiting an employer from asking a prospective employee about previous wage and salary.  The City of Philadelphia passed an ordinance with similar language that prohibits an employer from asking a prospective employee about their previous wage and salary. Subsequent to passage, a lawsuit was filed in federal court on the grounds that the ordinance violates the First Amendment and the Commerce Clause of the United States Constitution.  The lawsuit argues that the statute prohibits a business from asking a question which, in of itself, does not discriminate or harm an individual and therefore would  challenge the notion that the statute is content-neutral, narrowly focused, serves a significant government interest, and leaves open alternative channels of communication.  Additionally, the IL bill may unlawfully impact commerce that takes place outside of Illinois boundaries. For instance, if a Missouri resident is interviewed in Missouri for a job in Illinois, does the statue apply? Or vice-versa, if an Illinois resident is interviewed in Illinois for a job in Missouri does the statute apply? If the answer is yes, then the statute arguably attempts to control activity outside of Illinois’ border and is subject to a federal Commerce Clause analysis. Notably, this week the 9th U.S. Circuit Court of Appeals in California cited a 1982 ruling by the court that said employers could use previous salary information as long as they applied it reasonably and had a business policy that justified it.

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DATA PRIVACY – RIGHT TO KNOW

 

HB 2774 Amendment #5 (Rep. Art Turner, D-Chicago) was heard in the Cybersecurity, Data Analytics and IT Committee this week.  This bill requires that companies which share or sell data to third parties must tell consumers, upon request, what personal information has been shared or sold and with whom the information has been shared or sold.  It seems like an easy enough request, but presents a major challenge for companies that have various ends of their business that collect and share data.  For instance, companies that have their own credit cards, loyalty programs, apps, and/or website may collect and share different kinds of data at different times.  Data is also shared in order to conduct surveys with third party manufacturers of products sold in stores.  All of the data is not kept in one neat box to pull from upon customer inquiry.  Businesses will have to build out a mechanism to search and find data that has been shared.  There is a cost and time component to that effort that would be better used doing things that would actually protect consumers, such as reinforcing software programs used to catch predators seeking to breach collected information.

In addition, the bill requires any company with a website that simply collects personal information to identify the categories of information collected and provide a description of the customer’s rights if such information is shared or sold to 3rd parties.

This bill is based on the state of California’s “Shine the Light” law which is much more narrowly focused in scope.  That law requires disclosure to persons that have an established business relationship if information is shared for direct marketing purposes.  HB 2774 has no such qualifiers.  It is much more expansive.  In addition, the bill defines personal information very broadly.  It can be something as simple a person’s address which can be found through a simple Google search, or even information that people put out on the internet themselves like educational information that a person may post to LinkedIn.

If we truly want to protect consumers, the state of Illinois has already done that through updating the Personal Information Protection Act (PIPA).  That act requires companies to notify consumers when personal identifying information has been breached that could cause consumers financial harm or put them at risk of identity theft.  Consumers can then do things to protect themselves such as seek new credit cards and put fraud notifications on credit reports.  HB 2774 doesn’t provide the consumer with any actual protection, just knowledge that information has been shared.  Frankly, a general notice about information sharing practices can be found in a company’s privacy policy today.  This bill gives consumers the illusion that it is providing them some additional privacy protections.  That is not the case.  Instead, it would actually require businesses to divert resources, resources that are better used to focus on protecting the data that companies collect.  IRMA testified in opposition.

The bill passed out of committee along party lines with a vote of 6-4-0.  It will now move to the House floor for further consideration.

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DATA PRIVACY – GEOLOCATION INFORMATION

 

HB 3449 Amendment #2 (Rep. Ann Williams, D-Chicago) would require companies that use geolocation services through an app to provide a way for users to affirmatively consent to the use of those services.  The consent must be through a hyperlink or other action that will require the consumer to show that they have consented to the specific use.  Therefore, mentioning that geolocation services will be used in the company’s privacy policy is not enough to satisfy the requirement in the bill.

It is widely understood that geolocation services can be turned off on a person’s device either through the app or through the phone or tablet.  This bill will require that the user give his/her consent upon first time use of the app, and also give consent whenever there is a material change to the specific purposes for which the information is collected, used or disclosed.  We can’t underscore enough that the power to control whether geolocation services are used is already in the consumer’s hand.  This bill provides no further protection to consumers than what already exists today.  IRMA testified in opposition.

The bill does not apply to entities subject to HIPAA, financial institutions and affiliates subject to Gramm-Leach-Bliley, internet, wireless and telecommunications service providers, cable and video service providers and persons licensed under the Private Detective, Private Alarm, Private Security, Fingerprint Vendor, and Locksmith Act of 2004.  The bill passed out of the Cybersecurity, Data Analytics and IT Committee with a vote of 6-4-0 and then it passed out of the House by a vote of 69-042-001.  It will now make its way over to the Senate.

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REASONABLE ACCOMMODATION

 

HB 647 Amendment #3 (Rep. Stephanie Kifowit, D-Aurora) brings employers and employees together to help protect employees from potentially violent situations. It allows an employee to provide the specifics of an order of protection to an employer so that the employer may reasonably accommodate the employee in light of the order of protection. This common sense change opens a dialogue between the employee and employer in order to determine which accommodation would best help the employee in his/her specific situation. The legislation does not mandate an employee provide the order of protection if he/she does not wish to do so. The legislation also includes changing a person’s email address and screening telephone calls as reasonable accommodations.

The Victim of Economic Security and Safety Act (VESSA)  recognizes the unique position a retailer holds with the public and provides consideration for this public accommodation and the amendment maintains this delicate balancing act while providing further protection for employees. Despite these common sense changes, the bill failed to pass the Judicial Civil law committee by a 4-4 vote.

We would like to thank Rep. Kifowit for working with IRMA and the business community in crafting a reasonable amendment to address this issue and we look forward to continued conversations.

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WORKERS’ COMPENSATION

 

The House passed HB 2622 (Rep. Laura Fine, D-Glenview) that would take $10 million in employer money from the Workers’ Compensation Commission Operations Fund to create a state-run Illinois Employers Mutual Insurance Company to compete with the over 300 Illinois’ private insurers.  Illinois changed its workers’ compensation system in 2011, limiting payments for carpal tunnel syndrome and for employees who can still work but whose injuries force them into lower-paying jobs.  There was also a 30 percent cut to payments for doctors, hospitals and pharmacies treating those injured on the job.  As a result, Illinois experienced a 13 percent decline in workers’ compensation medical costs between 2010 and 2014.

Despite these changes, Illinois insurers and self-insured companies paid an estimated $2.75 billion in workers’ comp benefits in 2014, according to the National Academy of Social Insurance. By contrast, employers in Indiana paid an estimated $589.2 million. Additionally, Illinois’ employers pay $2.23 for every $100 in payroll, while those in Indiana pay $1.05—the national median is $1.84. Today, Illinois is tied for having the eighth-most expensive premiums in the nation. The proponents of HB 2622 argue that workers’ compensation costs are still high for companies because insurance companies have not passed on the savings realized from the 2011 changes. They argue that in 2015, 332 insurance companies underwrote workers’ comp policies in Illinois, more than in any other state, collecting $2.83 billion in premiums. In 2010, insurers reported losses of nearly 11 percent; four years later, they reported the same in profits. The insurance companies contend that while the 2011 changes likely decreased the insurers’ losses, insurers in Illinois only averaged 6.1 percent profit annually between 2011 and 2014.

HB 2622 passed the House with a partisan vote of 067-051-000. It moves to the Senate for consideration.

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FOOD ALLERGEN

 

HB 2510 (Rep. Sarah Feigenholtz, D-Chicago) requires additional FSSMC allergen training. This is an initiative of the Illinois Restaurant Association (IRA) and the National Restaurant Association. This is similar to legislation enacted in Virginia, Massachusetts, Michigan and Maine. The current eight hour FSSMC training already contains a 90 minute segment that includes discussion of allergens.  As such, a restaurant worker will now be required to pay for two separate training programs that cover the same material. Additionally, the IRA believes that the additional training is necessary to remain ‘progressive’ in the restaurant industry. To that point, any restaurant can voluntarily choose to require their employees to receive additional training without passing a law that mandates additional redundant requirements and expenses on every restaurant and restaurant food manager in Illinois. Finally, nothing prohibits the state from expanding the current allergen training in the current eight hour course without requiring a restaurant worker to pay an additional fee.

We want to thank Rep. Sara Feigenholtz for working IRMA to attempt to reach a reasonable solution and we look forward to continuing discussions.

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GUN DEALER LICENSING

 

SB 1657 SFA #1 (Sen. Don Harmon, D-Oak Park) would require sellers of guns and ammunition to apply for a state license to sell.  Gun dealers are currently licensed and inspected by the federal government.  This license would allow the state to separately inspect locations and possibly take licenses away for violations of the Act.  IRMA was a part of the negotiations last legislative session to discuss the licensing effort and this amendment reflects the previous agreement which exempts from the licensing requirements any retailer that does less than 20% of its sales in guns and ammunition.  Since retailers that sell a small percentage of guns are not the focus of the legislation, nor have they been shown to have engaged in the sale of guns to straw purchasers, it makes sense to focus the bill where the real problems lie.  The exemption would certainly be revisited if it is later found that such retailers have not been acting as good stewards of the privilege of selling firearms in Illinois.  The Senate Judiciary Committee passed the bill along party lines and the bill passed the full Senate with a vote of 30-021-001.  It will now move over to the House for further consideration.

We want to thank Sen. Harmon for working with IRMA over the past couple of years on this issue to negotiate a reasonable compromise that targets the problem of straw purchases.

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CRIMINAL LIABILITY FOR BUILDING OWNERS AND MANAGERS

 

HB 531 HFA #4 (Rep. Kathleen Willis, D-Northlake) is an agreed amendment that was the result of several rounds of negotiations between the sponsor and owners and managers of commercial buildings.  The amendment would create an offense for injury to first responders when they are hurt due to dangers that exist in buildings that the owner or manager knew about and actively concealed.  The resulting injury must have been the primary cause of the injury or death in order to be charged under the Act.  The amendment clarifies that the new cause of action does not result from unknown dangers.  The earnest negotiations produced a bill that is narrowly tailored to address the issue and allowed the opposition, which included IRMA, to change its position to neutral.  It also clarifies that conditions caused by the failure of government to make capital improvements or fund repairs due to the lack of appropriation will not give rise to a cause of action.  The bill was amended on the House floor and passed the House by a vote of 95-000-000.

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EMPLOYEE TRANSPORTATION BENEFITS PROGRAM

 

HB 2802 Amendment #2 (Rep. Theresa Mah, D-Chicago) will require employers located in the Regional Transportation Authority (RTA) area with at least 25 or more full-time employees to set up a program that would allow employees to have a pre-tax benefit in order to purchase their transit passes or to pay for parking at or near their place of business.  If the employer chooses not to offer the benefit as a pre-tax benefit, the employer must either pay for the transit passes or reimburse the employee for qualified parking expenses.  The program will apply to all employees as long as at least 25 of the employees are full-time.

This bill is based off of similar legislation that exists in New York City, Washington, DC and San Francisco.  While companies are allowed to voluntarily participate in these programs today, and the RTA has its own program set up for employers, this bill would mandate participation adding to the many mandates that are being passed during this legislative session.  IRMA testified against the bill in committee which passed along party lines.  It was then sent to the House floor where it passed with a vote of 62-054-000.  It will move to the Senate.


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This Week in Springfield – 100-10

$15 MINIMUM WAGE
PROPERTY TAX SHIFT
GENDER PAY HISTORY
WRONGFUL DISCHARGE
FOOD HANDLER FEE REDUCTION
ATM FEE LIMITS
“LIFELINE” BUDGET
TELECOMMUNICATIONS MODERNIZATION
JOIN US FOR BUSINESS DAY

This week in Springfield a disturbing anti-employer narrative continued to build as proposals to increase the minimum wage to $15, shift the property tax burden to employers, remove the ability to pay employees based on merit, seniority, or production, and eliminate at-will employment that put employers and employees at risk advanced.

$15 MINIMUM WAGE

 

HB 198 Amendment #1 (Rep. Will Guzzardi, D-Chicago) seeks to raise the state’s minimum wage from the current $8.25/hour to $15.00/hour over a period of 5 years.  The increase would begin on January 1, 2018 and increase every January 1st for all employees aged 18 years or older according to the following schedule:

  • 1/1/2018: $9/hour
  • 1/1/2019: $10/hour
  • 1/1/2020: $11.25/hour
  • 1/1/2021: $13/hour
  • 1/1/2022: $15/hour

There is a limited income tax credit for employers of 50 or fewer employees.  This credit does not extend to franchises or other similar business models that have more than 10 locations combined between the franchisor and all franchisees (or the equivalent) nationwide. The tax credit has the effect of providing an additional year for businesses with 50 or fewer employees to reach $15.00/hour.  All current minimum wage exemptions will remain intact.  Those exemptions allow an employer to (1) pay an employee $0.50 less per hour for the first 90-days of employment; or (2) pay employees under the age of 18 $0.50 an hour less than the minimum wage.  As we did in the previous subject matter hearing, IRMA testified in opposition.  The bill passed out of the House Labor & Commerce Committee on a partisan vote of 17-6-0 and has been sent to the House floor for additional consideration.

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PROPERTY TAX SHIFT

 

HB 156 (Rep. Michelle Mussman, D- Schaumburg) seeks to shift several billion in property taxes from residential payers to employers. The shift comes by way of increasing the homestead exemption in Cook County by 14% and 33% in all other counties. This would make the homestead exemption uniform $8,000 statewide. Additionally, there are special tax breaks for senior citizens and veterans. The House debate was interesting in that many noted this was nothing more than political gamesmanship but they wound up voting ‘yes’ for fear of getting attacked for failing to provide property tax relief. While HB 156 received bi-partisan support as a result of these fears, it was the House Democratic response to Governor Bruce Rauner’s call for permanent property tax relief.

IRMA joined a long list of other entities in opposition with the Taxpayers Federation of Illinois (TFI) providing detailed testimony. TFI estimated that the homestead exemption would shift nearly $5.2 billion while the senior exemption would shift another $800 million in equalized assessed valuation (EAV). If applies across the board, TFI estimates this shift will add at least another 2% to the property tax bills of commercial and industrial property tax payers.

HB 156 now proceeds to the Senate for additional consideration.

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GENDER PAY HISTORY

 

An initiative to prohibit employers from requesting the wage, salary, compensation and other benefits history of a prospective employee continues to progress through the General Assembly. IRMA has made it very clear that it can support an initiative that prohibits an employer from asking about prior wages and salary but cannot support an initiative that does not allow a company to base an employee’s salary or raise on seniority, merit, quality or quantity of production. These are the current defenses to an unequal pay claim in Illinois and almost every other state. HB 2462 (Rep. Anna Moeller, D-Elgin) would prohibit a company from using these common sense and practical measures as defenses if an employee can find any “alternative practice” used by any company in the United States for a similar job position.  As such, an employee who has no experience but has the same educational and technical background as a person with 25 years of experience arguably must be paid the same.  An employee who has a sales metric of $100,000 arguably must be paid the same as a person who has a sales metric of $1 million. This is contrary to how businesses operate in the real world. Additionally, courts have repeatedly upheld these processes as legitimate business measures that protect and promote employees. In fact, in a state of over 13 million people, only 266 claims have been filed in the last four years. Only 13 claims were found to have any merit. Only ½ of 1% of all businesses in Illinois are responsible for any paid out unequal pay claims. Companies spent more money defending frivolous claims than unequal pay claims were awarded by the courts. Frivolous claims will only be exacerbated by the fact the proposed legislation also provides for additional penalties that include but are not limited to compensatory damages, punitive damages, and special damages.

IRMA was told by the advocates of HB 2462 that we should support the bill because the Massachusetts’ Retail Association supported a law that the Illinois’ bill was modeled upon. IRMA does support the Massachusetts’ approach. Unfortunately HB 2462 bears no resemblance to the Massachusetts’ law.  To date, that compromise has been rejected.

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WRONGFUL DISCHARGE

 

Legislation that would eliminate the ‘agreed bill process’ passed out of the Senate Labor Committee on the assurance of the sponsor he would work with opponents including IRMA. SB 1760 (Sen. Pat McGuire, D-Crest Hill) is a union initiative that would require an employer to furnish to a discharged employee a statement of reasons for the discharge. A discharge would be wrongful if the discharge was a constructive discharge, if it was not for good cause, or if the discharge was in violation of the employer’s personnel policy.  Illinois would be the only state to have such a law.

SB 1760 would create a “good cause” for termination standard for all Illinois workers.  It allows any employee, except those covered by a collective bargaining agreement (CBA), to challenge any termination or resignation as not being for “good cause” pursuant to the specific definitions in this bill.  As defined, a discharge would be wrongful if; (1) it was a constructive discharge, (2) it was in retaliation for the employee’s refusal to violate public policy or for reporting a violation of public policy, (3) it was not for good cause and the employee had completed the employer’s probationary period for employment, or (4) the employer violated the provisions of their written personnel policy. Additionally, employers would be banned from providing truthful references. Any time an employee is terminated for what the company considers to be for good cause and in compliance with the law would be subject to the employee’s challenge.  The legislation would also be in conflict with employer’s drug and alcohol policy and limit the employer’s ability to enforce that policy in a necessary and safe manner for the entire workplace.  Finally, the legislation threatens the agreed bill process. Passage of SB 1760 would reverse the terms agreed to by labor during the agreed bill process.

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FOOD HANDLER FEE REDUCTION

 

HB 3684 (Rep. Kelly Burke, D-Oak Lawn) removes an obsolete fee paid by restaurant and grocery retail workers. It passed the House unanimously by a vote of 114-0-0.  Illinois is one of only a few states that require a separate food handling certificate and fee in addition to the national food handling certificate. Currently under Illinois law, an individual must complete an Illinois Department of Public Health (IPDH) approved training program and then pass an exam provided by an accredited exam provider. Once the individual pays for and passes the exam and receives the national certificate, he/she is required to electronically send the national certificate to the state and pay an additional $35 for a redundant Illinois specific certificate. When the Food Handling Regulation Enforcement Act was initially implemented, Illinois drafted, maintained, amended, mailed and graded their own examination. As such, an administrative justification existed for an additional fee. This Illinois specific exam no longer exists, therefore the administrative expenses no longer exist.

The legislation now moves to the Senate for consideration.

IRMA would like to thank Rep. Kelly Burke for her sponsorship and efforts in achieving passage in the House.  IRMA would also like to thank Sen. David Koehler for sponsoring the bill in the Senate.

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ATM FEE LIMITS

 

HB 1274 Amendment #1 (Rep. Arthur Turner, D-Chicago) would prohibit ATM withdrawal fees from being higher than $1.00, and would prohibit other costs and fees from financial institutions related to withdrawing cash from the ATM.  This bill attempts to address the fact that fees have increased over the years and state government currently doesn’t have any control over how much a person can be charged when withdrawing money from an ATM.  There are specific costs to the business for financial transactions, and businesses use these fees to help cover the costs of these transactions.  As there is much competition in the ATM marketplace, the customer has the right to comparison shop and do business with financial institutions, or utilize ATM’s that give them the best value.  The bill passed out of the Consumer Protection Committee on a partisan roll call of 3-2-0 and we expect that there will be more debate on the House floor.

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“LIFELINE” BUDGET

 

Lawmakers passed an $817 million “lifeline budget” out of the House that would provide temporary funding relief to higher education and social service and health programs. This included $258 million for programs, including senior meals and crime prevention, and indigent burials. It also included $559 million for state universities, community colleges, and educational grants for low-income students.

Before the debate had even taken place, Governor Bruce Rauner had pledged to veto any stopgap measure absent property tax relief. As such, no Republican voted for the initiative and argued that the measure was just delaying a real fix to the problem.

HB 109 (Rep. Greg Harris, D- Chicago) passed on a vote of 64-45-1 and heads to the Senate for additional consideration.

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TELECOMMUNICATIONS MODERNIZATION

 

IRMA joined an array of entities testifying in support of HB 2691 (Rep. Brandon Phelps, D-Harrisburg) that seeks to modernize Illinois’ telecommunications laws. Historically, retail is the most dynamic of the business sectors as we are in a constant state of change adjusting to changes in products, technologies, and consumer tastes and desires. As technology has evolved, the pace of change has accelerated and created tremendous opportunities and challenges. Illinois retailers need a modern and flexible telecommunications system in order to compete and meet the customized experiences consumers now expect.

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JOIN US FOR BUSINESS DAY

 

The constant attacks to your business are real.  State government stands poised to pile on instead of exercising caution.  They are considering proposals to raise the minimum wage to $15, require paid sick leave, increase the threshold for felony retail theft to $2,000 or more, eliminate the retail discount, and the list goes on.

So what can you do about it?  You can show up when it counts.  Attend IRMA’s annual lobby day on Wednesday, April 26th. Bring a fellow business owner and have a frank discussion with legislators about the impact that all of these proposals will have on your business.  Join the largest gathering of employers in Illinois each year.  Additional information, including registration and sponsorships can be found here. We hope to see you there.

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