Capitol Hill has been very active since the 111th Congress convened earlier this year.
The Coalition of Franchisee Associations (CFA) which DDIFO is a member of has also been active. A number of high priority CFA issues have already been reintroduced including the Employee Free Choice Act (“Card Check”), the Arbitration Fairness Act and the Credit Card Fair Fee Act.
As these issues begin to move on the Hill, be sure to stay tuned for Action Alerts and updates from DDIFO.
FEDERAL ISSUES
Employee Free Choice Act – “Card Check”
The “Card Check” fight is heating up and may become the most contentious issue debated before the August recess. In May, Democratic Senators Feinstein (CA), Carper (DE) and Webb (VA) all publicly stated that they will not vote for cloture on the bill. This would eliminate the chance of a cloture vote – that is, a vote to end all debate on the topic and cast a vote.
As a result, lawmakers have been looking for other alternatives to satisfy both parties. One option is to have quicker elections – approximately 10-14 days. Another is to increase access for unions to enter work sites. Senator Specter (PA) proposed the use of mail-in union authorization cards in place of secret ballot elections as well as the continued use of binding arbitration. The business community has publicly opposed these options.
In the absence of a compromise, Senator Tom Harkin (IA), a key proponent of Card Check, indicated that he may bring the original bill to a vote as early as this month if a compromise is not reached.
If you haven’t already done so, please visit “Take Action” to urge your Members of Congress to vote AGAINST the Employee Free Choice Act.
Health Care
On May 18, the Senate Finance Committee issued a report describing various options for healthcare reform. In particular, the Committee discussed potential reforms to ERISA, and “pay or play” requirements for employers. The “pay or play” suggestion would require employers with greater than $500,000 in total payroll to offer health insurance to full-time employees (30 hours or more) or pay an excise tax per employee based on gross receipts.
Both the Senate Finance Committee and Senate Health, Education, Labor and Pensions (“HELP”) Committee are crafting the language for a health care bill that they hope will be introduced this month. Several business groups have been advocating on issues including employer obligations, tax treatment of employer provided benefits, and possible taxes on soda and alcoholic beverages as potential revenue sources.
President Obama has publicly stated that health care reform is the number one priority on his domestic agenda and that he would like a vote in the Senate before the August recess.
Credit Card bills
Credit Cardholder’s Bill of Rights
On May 19, the Senate passed the Credit Cardholder’s Bill of Rights by a vote of 90-5. It was signed by President Obama on May 22. The law focuses on consumer-related credit card issues. More specifically, it prevents creditors from adjusting annual percentage rates on preexisting balances and outlaws providing a credit card to an individual under the age of 18.
CFA, as part of the Merchant Payments Coalition, supported an amendment which would have allowed retailers to provide discounts for lower-cost transactions and have the ability to promote such offers. The amendment was ultimately not included in the final bill but may be included in a later credit card bill.
Credit Card Interchange Fees Act
On May 13, Representatives Peter Welch (VT-AL) and Bill Shuster (PA-09) introduced the Credit Card Interchange Fees Act of 2009. Similar to the proposed amendment discussed above, the bill allows merchants to offer discounts to customers who pay with lower cost payment types. It allows merchants to decline the use of certain cards that have high fees, set minimum prices for credit card purchases and choose their own financial routing networks.
Credit Card Fair Fee Act
On June 4, Judiciary Committee Chairman John Conyers (MI-14) introduced the Credit Card Fair Fee Act of 2009. As you may remember, this legislation is similar to the bill supported by CFA last year which allows merchants to negotiate their interchange fee rates with credit card companies and their issuing banks. If either side refuses to come to the table, the Attorney General would assume oversight of the negotiation process.
As a member of the Merchant Payments Coalition, CFA continues to support this bill.
Take Action to support the Credit Card Fair Fee Act
Arbitration Fairness Act
On February 12, Representative Hank Johnson (GA-04) re-introduced the Arbitration Fairness Act, whose companion bill was introduced by Senator Russ Feingold (WI) on April 29. On the day of the Senate bill’s introduction, CFA attended a press conference in support of the bill and served as a spokesman on behalf of franchisees. CFA also drafted a position paper in support of the bill which was included in all “leave behind” packets for attendees.
As you may recall, the Arbitration Fairness Act voids all pre-dispute binding arbitration clauses in franchise agreements. CFA recently became a member of the “Fair Arbitration Now” Coalition which supports the bill’s passage.
Immigration
On April 30th, the Department of Homeland Security (DHS) issued a press release regarding immigration. It noted that its new enforcement tactics would focus more on employers rather than on unauthorized workers. DHS stated that its updated materials reflect a “renewed Department-wide focus targeting criminal aliens and employers who cultivate illegal workplaces by breaking the country’s laws and knowingly hiring illegal workers.”
While it is unclear whether any additional official announcement will be made, franchisees should be prepared for additional policies and enforcement.
STATE ISSUES
Paid Sick Leave
California – Legislation that would have provided mandatory paid sick leave for California workers has died at the Capitol, along with hundreds of other proposals that would have increased the burden on the state budget. Assembly Bill 1000 required small-business owners to provide up to a week per year of paid sick leave. Small-business advocates strongly opposed the proposal as overly burdensome on the state’s business community. “Small businesses can breathe a sigh of relief today as it appears that the state legislature can take a hint,” said John Kabateck, California executive director of the National Federation of Independent Business. “With a current unemployment rate of 11 percent and a state budget that is bleeding red ink, now is not the time for additional costly mandates to be placed on struggling small businesses.”
Connecticut – Last month, the state House of Representatives passed a bill which requires that employers with 50 or more employees provide paid sick leave accruing at a rate of one hour for each 40 hours worked. Once employed for 120 days, employees are eligible to use the time and may use up to 52 hours of accrued sick leave per year. This bill applies to all employees, whether part-time, full-time, or seasonal. It now sits in the state Senate, where it awaits a hearing.
State Menu-Labeling
Oregon – Lawmakers passed a law on June 1 which would require chain restaurants throughout the state to post calorie counts on menus, menu boards and drive-thru signage beginning in 2011. Beginning Jan. 1, 2010, restaurants with 15 or more outlets nationwide must also make information regarding carbohydrates, saturated fat, trans fat and sodium available upon request. Violators would face fines of up to $1,000.
Fortunately, the bill also contains language which preempts local labeling regulations and includes liability protections for franchisees. The measure is expected to go to Gov. Ted Kulongoski’s desk within about two weeks, and he is expected to sign the bill.
Connecticut – A menu-labeling bill that passed the legislature in early June now sits on the Governor’s desk for approval. Similar to the Oregon bill, Connecticut’s version would also require restaurant chains with 15 or more units to post calorie counts on menus and menu boards, including drive-thrus, starting in July 2010. It is unclear whether Governor M. Jodi Rell will sign it into law.
Maine – A statewide menu-labeling bill has passed the House of Representatives. LD 1259 would require chains with more than 20 stores worldwide to list the nutritional information of all their entrees, appetizers and desserts on the menu. According to the Maine Restaurant Association, the real fight is in the Senate, where the bill recently passed the First Reading in the Senate by a vote of 18-17.
Massachusetts- The Massachusetts Public Health Council approved rules requiring major chain restaurants to provide calorie information for menu items offered for more than 30 days.
Food establishments with 20 or more locations in Massachusetts will be required to provide calorie information at the point of purchase — either on the menu board or on the restaurant’s menu. The new rules, which will take effect in November 2010, will cover approximately 50 chain restaurant companies, representing more than 5,000 locations in Massachusetts.
Delaware – New menu labeling legislation has been introduced in the state Senate that would mandate chain restaurants (10 or more locations nationally) to list calories, grams of saturated fat, carbohydrates and sodium for all items on the menu for 30 days or more. Restaurants using a menu board would be permitted to list only calories as long as a sign noting ‘additional information available upon request’ was posted. The bill (SB 81) has been referred to the Senate Small Business Committee.
Tennessee – Governor Bredesen’s “Healthful Menu Act” (menu labeling) was sent to “summer study committee” by the House Public Health subcommittee. This bill included state preemption of local labeling standards but also included varying “LEAN-style” proposals mandating some level of nutritional disclosure statewide. Sending this bill to summer study committee has the effect of tabling the bill for the year but not killing it; it can still be considered next session (2010).
Immigration
Rhode Island – The Rhode Island House of Representatives passed the E-Verify bill requiring private employers to electronically verify the citizenship of new hires. The proposal, which has now passed the House for the third consecutive year, succeeded on a 38-33 vote that came after nearly two hours of debate. Supporters cheered the approval as a powerful first step toward curbing illegal immigration problems in the state. A year ago, the same bill passed muster in the House by a much larger, 53-17 margin. The E-Verify proposal now heads to the Senate where it has died in committee in each of the past two years and is expected to face similar challenges this time.
Minimum Wage
Rhode Island – A bill (S.659) to provide for automatic annual increases in the minimum wage was approved by the Senate Labor Committee last month. The state’s minimum wage has stood at $7.40 an hour since Jan. 1, 2007. Under the version now headed for the full Senate, the state would use the Consumer Price Index for urban wage earners and clerical workers to adjust the rate annually, starting in January 2011. The rate could be raised by the percentage increase in the CPI up to, but not more than 3 percent.
