This Week in Springfield – 101-08

March 15, 2019

IN THIS ISSUE:

CONSUMER LIQUOR HOME DELIVERY PASSES COMMITTEE
TOBACCO 21 TO GOVERNOR
PERSONAL BULK FOOD CONTAINERS AT RETAIL
PAY HISTORY PASSES THE HOUSE, AGAIN
SNAP BENEFITS AT RESTAURANTS PASSES COMMITTEE
REBATE CARDS DORMANCY CHARGES PROHIBITION PASSES COMMITTEE
EMPLOYEE HUMAN RIGHTS “EXPANSION” ADVANCES

This Week in Springfield both Chambers were in session, Tobacco 21 was sent to the Governor, salary history made its way to the Senate for a third year in a row, and committee action started to heat up before the impending deadlines.

CONSUMER LIQUOR HOME DELIVERY PASSES COMMITTEE

SB 54 (Sen. Don Harmon, D-Chicago) expressly allows retailers to deliver liquor to consumers. The retail industry is ever evolving and growing as technology offers more conveniences for consumers.  One innovative step has included the use of mobile phone apps, telephone and internet orders, and curbside pickup to facilitate the purchase of groceries and alcohol.  Illinois currently allows this innovation to thrive and retailers have used various procedures to facilitate liquor delivery either through an independent contractor, employee, third party contractor delivery, or curbside pickup. Safeguards to verify the age and identity of the consumer are required at the point of sale and at the point of delivery.

Inconsistency has arisen as some local municipalities have been prohibiting it while others have been expressly allowing it through ordinance. In order to encourage continued innovation and establish a consistent policy, Sen. Don Harmon brought stakeholders together that include the IRMA, Associated Beer Distributors of Illinois (ABDI), Wine and Spirits Delivery Distributors of Illinois (WSDI) and the Illinois Beverage Association (ILBA) to work on an industry compromise. The legislation allows retailers to continue using the aforementioned delivery methods and ordering platforms while also inserting consumer safeguards.  The legislation also requires the liquor to be delivered during applicable hours of sales from an Illinois retailer to an Illinois consumer within a 30 mile radius.

The legislation passed the Senate Executive Committee by a unanimous vote with the agreement that Sen. Harmon will bring an amendment back to the Committee for consideration.

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TOBACCO 21 TO GOVERNOR

Tobacco 21, HB 345 (Rep. Camille Lilly, D-Chicago/ Sen. Julie Morrison, D-Deerfield), passed the House with a vote of 82-31 and the Senate by a vote 39-16. Tobacco 21 passed the Senate and narrowly passed the House last spring with 61 votes before being vetoed by Governor Bruce Rauner. In the meantime more than 34 Illinois municipalities passed a Tobacco 21 measure.

HB 345 prohibits a licensed Illinois retailer from selling tobacco products to anyone below the age of 21, but removes the penalties for the purchase, possession, selling, or consumption of tobacco for the same individuals. It completely removes the specific prohibition of the possession of tobacco products by a minor.  And it only prohibits a minor from selling tobacco products, as an employee, at a licensed retailer. In fact, the only thing SB 21 penalizes a minor for is using a fraudulent identification.

As a result, since the Illinois statutes would no longer penalize a minor for any of the aforementioned, SB 21 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.  As such, the bill protects unlicensed, unregulated, and, untaxed individuals selling tobacco to minors while prohibiting licensed Illinois retailers from selling tobacco products to anyone below the age of 21.

The legislation has been sent to Governor Pritzker for his signature.  Part of the Governor’s budget relied on vaping and tobacco taxes. As of this writing, there has been no word on how this will impact those revenue estimates. If signed the changes will go into effect July 1, 2019.

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PERSONAL BULK FOOD CONTAINERS AT RETAIL

HB 3440 (Rep. Will Guzzardi, D-Chicago) permits retailers to allow consumers to fill personal containers with dry bulk foods and prohibits counties and municipalities from disallowing the practice.  This practice is already allowed in Illinois but is currently prohibited in Chicago.   IRMA is neutral on the legislation because it is permissive and maintains the current status quo of allowing retailers either to implement or prohibit the practice on their premise.

Most retailers do not currently allow the practice for many different reasons. Currently, Illinois law does not define what may be used for a personal container or who is liable if the consumer gets sick from an unsanitary personal container brought from home. Additionally, most retailers provide a uniform variety of single use containers in the store and the tare weights are pre-programmed into the point of sale and scale system. It would be impractical to allow a consumer to bring a random personal container for which the retailer does not have the weight pre-programmed into the point of sale.  Moreover, if the retailer cannot accurately ascertain the weight of the personal container prior to the consumer adding bulk food, then the retailer cannot accurately charge the correct price or proper tax for the item. This opens retailers up to frivolous lawsuits for imposing an improper tax.  Similar to the plethora of the lawsuits filed during the short run of the ill-fated sugar sweetened beverage tax in Cook County. Hence, the importance of allowing retailers to decide whether or not to allow the practice.

HB 3440 passed the House Energy & Environment Committee by a vote of 25-0-0. IRMA will remain neutral because HB 3440 is permissive and does not change the status quo. That being said, most retailers will continue to avoid the practice due to the aforementioned issues.

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PAY HISTORY PASSES THE HOUSE, AGAIN

HB 834 (Rep. Anna Moeller, D-Elgin) or the “Pay History” legislation passed the House by a vote of 86-28 and now moves to the Senate for consideration.

Two years ago, IRMA stated it would support a proposal prohibiting an employer from asking an employee about previous wage, salary, and other compensation. We proposed the model that was adopted in Massachusetts and supported by the advocates in partnership with the Massachusetts business community. Last year, IRMA stated it would support the legislation if it would just prohibit the question. The offer for compromise is once again before the General Assembly. Unfortunately, HB 834 does not contain either avenue for compromise.

While HB 834 prohibits an employer from asking an employee about previous wage, salary and other compensation, it also unjustifiably erodes the current statutory defenses for Illinois employers while expanding the statutory penalties.  The facts do not justify this approach.

According to Illinois Department of Labor statistics (“DOL”), in the past 13 years (excluding 2010 and 2011 where there are no available data), under the current limited defenses and exorbitant penalties, there have been only 51 recorded violations of the Equal Pay Act. In that same time period, approximately 707 investigations were conducted by DOL. Less than 7.5% of all claims in the last 13 years have resulted in a violation.  Moreover, 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 13 years.  This is a 99.9999575% compliance rate.

The reason is found in the fact that unlike other states, Illinois employers only have four defenses to an unequal wage claim. Those four defenses are: (1) seniority system; (2) merit system; (3) a system that measures earnings by quantity or quality of production; and (4) a differential based on a business necessity that does not include sex or race.  If an Illinois employer is found in violation of an equal pay claim, the employer is liable for damages under no less than seven state and federal statutes. Unlike most states, Illinois does not prohibit a claimant from ‘double-dipping’ in state and federal court.  These statutes include the: (1) Illinois Equal Pay Act of 2003, (2) Illinois Humans Rights Act, (3) Illinois Wages of Women and Minors Act, (4) Illinois Equal Wage Act, (5) U.S. Equal Pay Act of 1963, (6) Title VII of the U.S. Civil Rights Act of 1964, and most recently (7) the Lily Ledbetter Fair Pay Act of 2009.

Given the facts noted above, it is safe to conclude that the current state and federal statutory penalty scheme has served as a more than sufficient deterrent to pay discrimination – at least in Illinois. Hence the need to simply eliminate the question.

Since the facts do not support the need for the extreme measures proposed in HB 834, IRMA remains opposed to arbitrarily restricting Illinois’ employer’s current limited defenses and increasing current statutory penalties.  IRMA does, however, continue to stand behind its pledge to support legislation to prohibit an employer from asking about previous wage, salary, or other compensation.

For these reasons, IRMA stands opposed to HB 834 but stands ready to support HB 834 if genuine, fact-driven compromise is desired.

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SNAP BENEFITS AT RESTAURANTS PASSES COMMITTEE

HB 3343 (Rep. Sonya Harper, D-Chicago) requires the Department of Human Services to establish a Restaurant Meals Program to permit individuals who are elderly, persons with a disability, and homeless individuals to redeem their Supplemental Nutrition Assistance Program benefits at private establishments that contract with the Department to offer meals for eligible SNAP recipients at concessional prices.  HB 3343 passed the House Human Services Committee by a vote of 18-0-0.

IRMA supports the intent of the legislation but was awaiting a conversation with the advocates as to some common-sense changes that would reduce the bureaucratic impact on businesses. IRMA will continue to keep members posted.

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REBATE CARDS DORMANCY CHARGES PROHIBITION PASSES COMMITTEE

HB 2156 (Rep. Theresa Mah, D-Chicago) passed the House Economic Opportunity Committee by a 9-4 vote and SB 222 (Sen. Cristina Castro, D-Elgin) passed the Senate Commerce and Economic Committee by an 8-2 vote. Both bills are intended to prohibit the issuance of product rebate cards that charge dormancy or other post-issuance fees. The language only applies to multi-store cards utilized for rebates after the consumer completes the rebate submission process. It exempts closed-looped merchant cards that are distributed and used at one retailer—also known as “store cards”.

An identical bill (HB 4922) passed the House with a 67-44 vote and the Senate by a 35-17 vote last year. It was subsequently vetoed by Governor Bruce Rauner.  Due to the aforementioned focus of the legislation IRMA is neutral as currently drafted.

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EMPLOYEE HUMAN RIGHTS “EXPANSION” ADVANCES

Currently, the Illinois Human Rights Act only applies to businesses with 15 or more employees. HB 252 (Rep. Will Guzzardi, D-Chicago) expands the coverage of the Act to apply to any business with one or more employees.  HB 252 passed the house by a 74-40 vote. Last year, an identical bill (HB 4572) passed the House by a 64-37 and the Senate by a 33-13 vote before being vetoed by Governor Bruce Rauner.

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