$15 MINIMUM WAGE
BUSINESS DAY 2017
An initiative, to remove an obsolete fee paid by retail workers passed the House Consumer Protection committee unanimously. 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. HB 3684 (Rep. Kelly Burke, D-Oak Lawn) eliminates an obsolete and outdated fee on grocery, restaurant and retail workers. 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. Despite no justification for the fee, IDPH uses the fee to subsidize operation expenses that include but are not limited to state employee salaries, state employee retirement, group insurance, office equipment, state garage payments, library supplies, employee conference expenses, etc.
IRMA would like to thank Rep. Kelly Burke for sponsoring the initiative along with Rep. Lisa Hernandez, Rep. Randy Frese, and Rep. Norine Hammond and the support from Rep. Bob Rita and Rep. Theresa Mah.
Legislation that would require Illinois’ employers to pay any employee making less than $47,476 overtime pay passed the House Economic Opportunity Committee on a partisan vote. HB 2749 (Rep. Will Guzzardi, D-Chicago) will more than double the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually).
This legislation is identical to former President Obama’s regulation on which a federal court ordered a nationwide injunction. States and business associations argued that the new rule’s extreme deviation from Congress’s unambiguous intent to exempt executive, administrative and professional (EAP) employees from the Fair Labor Standards Act (FLSA) by adopting a minimum salary level that would exclude millions of employees performing exempt EAP job duties based solely on their salary level. The court agreed, noting that although there is no mention of a salary threshold in the statute, the new rule made the salary threshold a center-point. Although there has been a salary requirement by regulation since 1940, since that time, the United States Department of Labor (DOL) has also set a low minimum salary level so that only “obviously” non-exempt employees are excluded from the exemption. The court characterized the salary level increase as a “drastic” change that would exclude millions of employees from the exemption even though they perform exempt job duties.
The court’s concerns are well founded and should be a clear policy if not legal cautionary tale. Despite these precursors, HB 2749 passed out of committee on a partisan vote.
The Senate Labor Committee and House Economic Opportunity Committee passed identical bills (SB 981 (Sen. Daniel Biss, D-Skokie/HB 2462 (Rep. Anna Moeller, D-Elgin) 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 other 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.
The proponents highlight Massachusetts as the only state to have enacted a similar law. The differences between the law enacted in Massachusetts and the one proposed here are too great to list here. Suffice to say that while Massachusetts offers a reasonable and balanced approach to a perceived issue, the current Illinois’ proposal takes the opposite approach.
The Executive Committee took brief testimony on a bill to ban the sale of energy drinks to persons under 18 years old. HB 2861 (Rep. Luis Arroyo, D-Chicago) defines energy drinks as non-alcoholic beverages that contain at least one of the following ingredients: taurine, guarana, glucuronolactone and ginseng. IRMA, and others including manufacturers and employee groups, is opposed to the ban which would require cashiers to check the ingredient list of every non-alcoholic drink sold at checkout in order to ensure compliance. The sponsor has continued to engage in conversations with the industry regarding the legitimate concerns of passing such a law. The sponsor asked for a vote although he has agreed to hold the matter while we continue to talk. The bill passed along party lines with a vote of 6-4-0.
Working with partners in the distributor community, IRMA supported an initiative to require the Illinois Liquor Control Commission to produce supporting documentation when citations are issued are when there is a proposal for a settlement negotiation. HB 2878 (Rep. Jay Hoffman, D-Belleville) would require the ILCC to produce such things as photographs, reports and any other information that has been collected pursuant to an alleged violation of the Act. In addition, it mandates that action be taken within 2 years of the alleged violation. The bill passed unanimously out of the Executive Committee and will be sent for consideration by the full House.
IRMA joined an array of business and labor groups at a subject matter hearing in support of SB 1381 (Sen. Bill Cunningham, D- Chicago)/ HB 2691 (Rep. Brandon Phelps, Harrisburg) seeking to modernize Illinois’ telecommunications laws. IRMA President & CEO Rob Karr testified as to the importance to the retail industry. Historically, there 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. Illinois retailers need a modern and flexible telecommunications system in order to compete and meet the customized experiences consumers now expect. IRMA will continue to work with all parties to ensure enactment.
IRMA is proud to announce that our annual lobby day at the Capitol will take place on April 26, 2017. Our featured speaker at the luncheon will be Matthew Dowd. You may recognize Mr. Dowd from his work as a Special Correspondent and Analyst for ABC News where he regularly appears on their headlining shows, Good Morning America, Nightline and This Week. In addition, he contributes material for the New York Times, the Washington Post and the National Journal, among other publications. Mr. Dowd has had a long, distinguished career as a political strategist, working on over 100 political campaigns, and is the co-author of the New York Times Bestselling Book: Applebee’s America: How Successful Political, Business, and Religious Leaders Connect with the New American Community. He has advised former President’s George W. Bush and Barak Obama as well as foundations include the Bill & Melinda Gates Foundation.
We hope that you will make plans to join us for what we know will be an engaging conversation not only on politics from a national perspective, but also emerging economic, spiritual and social trends that are influencing today’s political discourse. The luncheon will be followed by visits to the Capitol to interact with policymakers. Register today!
This Week in Springfield only the House was in Session. A subject matter hearing was held on a Teamsters pharmacy mandate bill and two bills passed the labor committee that are a concern for Illinois’ businesses.
A subject matter hearing was held to discuss HB 2392 (Rep. Mary Flowers, D-Chicago) that was filed on behalf of the Teamsters in attempt to capitalize on a Chicago Tribune investigative report regarding drug interactions. The problem presented in the report involved a patient presenting two scripts which, if dispensed together, had the possibility of a severe interaction. What should have happened is the pharmacist should have called the prescriber, who should not have prescribed the combinations in the first place, or counseled the patient about the potential interaction and urged them to contact their prescriber. In response, at the behest of Governor Bruce Rauner, the Illinois Department of Financial and Professional Regulation (IDFPR) proposed new rules governing counseling by pharmacists. Once these rules are formally adopted by the Joint Committee on Administrative Rules (JCAR) Illinois will have one of the strictest, if not the strictest, counseling laws in the nation. These significant regulatory changes move Illinois from an ‘offer to counsel’ state to a ‘mandatory counsel’ state.
Illinois has gone nearly two years without a state budget. The result has been several downgrades of the state’s bond rating, spending, as a result of court orders, that exceeds revenues, unpaid bills that grow at the rate of $11 million per day, some state vendors not getting paid, etc. Against this backdrop, on Wednesday Governor Bruce Rauner delivered his third annual Budget Address.
As he did a few weeks ago during his State of the State speech, the Governor struck an optimistic tone about the future possibilities of Illinois noting the state’s many strengths if we make the reforms necessary to be competitive – a focal point of his speech. According to the Governor, if Illinois had been more competitive over the last six years, 540,000 fewer residents would have left the state. If our economy had grown at the national average since 2000, we would have had 650,000 more jobs and an $8.5 billion surplus.
Among the reforms the Governor wants to see in any budget deal, he called out workers’ compensation reform and a permanent property tax freeze as essential reforms as well as term limits and redistricting. The Governor also called for a hard cap on spending to try and force government to live within its means.
As reported in TWIS in early January, Senate President John Cullerton (D- Chicago), Senate Republican Leader Christine Radogno (R- Lemont) and some members of their respective leadership teams, have been attempting to craft a bi-partisan budgetary framework with the goal of trying to end the nearly two-year old budget impasse. Every day that passes, Illinois adds at least another $11 million in debt. If nothing is done by the end of 2018, the deficit would exceed $20 billion. IRMA and one other business group have been in constant communication with the leaders and their top staff. The engagement is designed to ensure that whatever is ultimately put forth truly solves the decades-old fiscal problems of the state and provides stability going forward while providing the reforms necessary to ensure employers of all sizes can prosper in Illinois. From the perspective of IRMA members, reforms must include restraint of local governments’ ability to continue to layer on seemingly endless and costly mandates in addition to never-ending tax and fee increases. Without this restraint, local governments can easily undo any positive action that may come out of Springfield.