This Week in Springfield – 100-27

In This Issue:

RETAIL THEFT
RESTRICTIVE SCHEDULING
BIPA
REBATE CARDS
TELECOMMUNICATIONS

This Week in Springfield, the Assembly reached its first committee deadline. Any legislation that does not have its final consideration deadline extended will be considered ‘held’ for the year. However, the same idea could make its way back into consideration as an amendment on another bill.  This is always a very active week in the Assembly and this time was no exception. 

RETAIL THEFT

 HB 3337 (Rep. Justin Slaughter, D-Chicago)/ SB 3257 (Sen. Elgie Sims, D-Chicago) seeks to increase the retail theft felony threshold from $300 to $2000—which would give Illinois the second highest felony threshold in the nation.  Currently, Chicago alone accounts for more property theft related offenses than 20 individual states and Illinois ranks 7th as a whole.  As a consequence to theft issues, a group of Chicago retailers recently hired private security to patrol the neighborhood around their stores. HB 3337 also allows criminals with prior felony robbery, armed robbery, burglary and residential burglary convictions to repeatedly steal $1,999 of property from a private individual and only be charged with a misdemeanor.

The advocates argue that increasing the retail theft threshold will keep people out of state prisons but admit it will shift costs to counties and municipalities. This cost shift was borne out by the experience of the State of California who increased their retail felony threshold to $950 – less than half of what is being proposed in Illinois.  A year after the increase, the California Assembly had to appropriate $270 million more to local governments to partially offset the cost-shift. But it is not just the cost-shift that hits local governments, it is also the loss of tax revenue from theft. For instance, reports estimate that U.S. retailers lose $60 billion worth of goods due to retail theft annually.  Illinois accounts for at least 3.4% (based on population) of that total which is over $2 billion worth of goods a year. This costs the state a minimum of $100 million in lost sales tax revenue and local governments a minimum of $25 million in lost sales tax revenue just based on their local share of the state sales tax. The loss is higher for local governments that impose their own sales tax. These numbers are extraordinarily conservative as they only take into account people actually apprehended and do not take into account the documented fact that shoplifters steal dozens of times before getting caught.

Proponents have claimed that ‘larceny’ has not increased in states where the felony retail theft threshold is increased. Larceny is a bucket of a number of criminal offenses. When the correct comparison is made – retail theft – the FBI’s numbers tell a different story. FBI statistics show that retail theft in the U.S. has increased 10% since 2010 and the value of the items stolen has increased 25% over that same time period as states have increased the retail theft threshold.  Lawmakers need look no further than the changes California made just three years ago. According to FBI statistics, property crimes in California increased 8% while theft related crimes increased 11%. Locally, of the 66 California cities that the FBI number included, 49 experienced an overall increase in property theft with 24 experiencing double-digit increases. Moreover, at the end of the year, five California cities were ranked in the top 10 for the largest property theft increases in the U.S. Additionally, the Los Angeles Police Department reported retail theft increased 25%.

There is an additional myth that retail thieves are harmless. The Illinois Sentencing Policy Advisory Council’s (SPAC) own statistics conclude that the average retail offender has seven previous felony convictions and 13 previous misdemeanor convictions. Any suggestion that retail theft is committed solely by first time offenders or harmless individuals is simply incorrect. Nevertheless, IRMA was the first business group to support legislation that allowed for expungement and sealing of criminal records and has consistently done so since. IRMA also worked with Cook County Sherriff Tom Dart’s office to pass the Accelerated Resolution Court Act or ‘Rocket Docket’ in 2015 which requires that persons charged with misdemeanor retail theft be released without having to pay bail while they await trial. Therefore, if anyone is sitting in prison, it is not because of retail theft.

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RESTRICTIVE SCHEDULING

 A subject matter hearing on the restrictive scheduling mandate was held this week in the House Labor and Commerce Committee at which IRMA testified in opposition. As introduced, HB 5046 (Rep. Chris Welch, D-Westchester) would, among other provisions, require a 72-hour notice of an employee’s weekly schedule and would impose statutory penalties if any part of the employee’s schedule is reduced or canceled after the notice. It applies to part time, full time, non-salaried, and salaried employees who make $50,000 or less. Over 40 different industry partners which include but are not limited to, retail, agriculture, accounting, manufacturing, energy, security, education, automotive, distribution, construction, hospitality, law enforcement, et., all oppose a restrictive scheduling mandate that negatively impacts employers and employees.

HB 5046 assumes that every restaurant, bar, grocery store, movie theatre, fitness center, pharmacy, hardware store, bank branch, school system, farm, manufacturer, construction project, municipality, daycare, park etc. can schedule or operate in the exact same manner.  Different employers have unique business, employee, and regulatory variables to consider when providing schedules that promote and support their employees while still allowing the business providing the jobs to operate effectively and efficiently. HB 5046 undermines the ability of each employer to properly manage their business and support the various flexibility requests of their employees.

HB 5046 eliminates scheduling flexibility, forces employers to deny last minute requests, and creates confusion. A “one-size-fits-all” mandate fails to recognize the negative impact that the regulations will impose on employees. Once a regulation is in place, employers are less able to respond to employee preferences and emergencies.  Restrictive scheduling constraints on flexible scheduling reduce the ability of employers to respond to changes in employee circumstances—this reduces the opportunities for employees. These mandates (1) prohibit the flexible schedules they value (picking up shifts and dropping them as needed); (2) result in fewer work opportunities; (3) result in fewer benefits that are offered as perks by many establishments; and (4) create an unnecessary environment of stress between employers and employees.

A flexible scheduling model is used in various industries in order to attract and retain employees. High school, college, and post-secondary students are drawn to retail because of the opportunity to work and design a flexible schedule around their classes.  Many workers are attracted to retail positions on a seasonal basis because they can pick up a few hours in order to supplement income or pay for holiday shopping. Additionally, retailers provide flexible employment for defined populations such as youth at risk, people with disabilities, or senior citizens.

While considering the requests and preferences of employees, businesses must consider those through the framework of needs of the business.  A variety of data points that may be used include: employee requests, sales forecasts, productivity of the store, historic payroll and hour reports, workload, marketing or other in-store events, transportation (truck, train, barge, delivery, etc.), civic events, and guest traffic patterns. Despite a business’ best efforts to predict scheduling needs accurately in each location, the need for employees in any given location is subject to these external factors, and others, that may change frequently, unpredictably, and with little or no notice.

As introduced, HB 5046 takes away the flexibility employees specifically seek and makes it far more difficult for employers to ensure they are properly staffed.

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BIPA

SB 3053 SA#2 (Sen. Bill Cunningham, D-Chicago) seeks to modernize Illinois’s excessively restrictive BIPA to reflect technological changes and a modern understanding of privacy that did not exist when BIPA was initially enacted. When BIPA was drafted in 2008, biometrics were just beginning to emerge and there was little understanding of a balance between privacy versus constructive uses. However, significant advancements in how to use such technology constructively necessitates a modernization of Illinois’ SB 3053 common sense changes will continue the protections that BIPA was intended to provide, while also unlocking new and valuable technological developments that do not implicate BIPA’s core purposes of prohibiting using such information for marketing and selling.

Current Illinois law endangers Illinois citizens by inhibiting the ability of places utilized by the public to use the latest technology to protect their customers, employees, and goods. Illinois law only allows the use of biometric screening technology if the individual gives their consent in advance.  Domestic violence abusers, human traffickers, kidnappers, thieves, etc. will not consent to the use of their biometrics.  Missing children, senior citizens, and trafficking victims cannot consent to the use of their biometrics.

SA#2 to SB 3053 also allows employer to use biometrics for internal purposes such as timekeeping, payroll, entry/exit, cash register security, Rx counseling compliance, etc. Under current law if employers utilize biometric data to comply with laws or employment policies they cannot do so unless every employee consents. This means if a single employee withholds consent, the employer must either scrap the more efficient and secure system, utilize multiple systems based on each individual employee’s preference. This endangers compliance which puts the employer, and in some settings consumers, at risk.  While enhancing protection, compliance, and efficiency, private entities would still be prohibited from selling, leasing, or trading biometric information.

SA#2 to SB 3053 maintains the prohibition on the use of biometrics for a commercial purpose.  This proposal would not gut the privacy protections under the Act for commercial purposes, nor does it remove the private right of action or damages that may be awarded.  This proposal simply exempts private entities from the Act for internal employment/compliance and security purposes as long as the private entity is not using the information for commercial purposes.  SB 3053 maintains the prohibition on the use of biometrics for a commercial purpose.

SB 3053 was not heard this week while education and discussions continue.

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 REBATE CARDS

 The Illinois Treasurer’s Office has introduced SB 3102 (Sen. Cristina Castro, D-Elgin)/HB 4922 (Rep. Theresa Mah, D-Chicago) which is intended to prohibit the issuance of 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. Senate Amendment #1 was adopted in committee providing clear guidance that SB 3102 would only apply to multi-store cards utilized for rebates. IRMA is neutral and appreciates the cooperation of Treasurer Frerichs, Senator Castro, and Representative Mah.

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TELECOMMUNICTIONS

Governor Rauner signed into law SB 1451 (Sen. Terry Link, D-Gurnee /Rep. Kelly Burke, D- Oak Lawn) paving the way for modernization of Illinois’s telecommunications infrastructure. This legislation positions Illinois to catch-up with twelve other states in terms of full-deployment of 5G and other telecommunications system/features. Given the fact retailers are 100% consumer facing and consumers expect and demand highly customized offerings with rapid delivery, a comprehensive and responsive telecommunications infrastructure is essential. As an early and avid supporter of SB 1451, IRMA would like to thank Sen. Link and Rep. Burke for their sponsorship, the members of the Assembly who voted in favor, and Governor Bruce Rauner for signing the bill into law.