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BPAA Biweekly Federal Policy Updates - July 12, 2019

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LABOR & MINIMUM WAGE

  • Bloomberg Government Reports: Minimum Wage Hike Bill Vote Next Week: Democratic Party leaders are confident they have 218 votes needed to get a floor vote for the Raise the Wage Act (H.R. 582), which the House plans to vote on next week. Lawmakers, staffers and lobbyists have been pushing to “educate” members on the bill to get the necessary support, sources told Jaclyn Diaz earlier this week. The federal minimum wage would be increased to $15 an hour from $7.25 by 2025, and then adjusted annually based on median wages, under the bill. It would also gradually phase out separate lower wages for tipped workers, youth, and individuals with disabilities.
    • Tipped Workers: Under the Fair Labor Standards Act (FLSA), workers who make more than $30 a month in tips are paid a cash wage of $2.13 per hour by their employers. If the employee doesn’t earn enough tips to reach the $7.25 per hour federal minimum wage, the employer must cover the difference, called a “tip credit.”
      • The bill would increase the base hourly wage for tipped workers to at least $3.60 for the first year after the bill takes effect. In each subsequent year, it would be increased until it equals the minimum wage in 2027, according to a summary of the introduced version of the measure from the House Education and Labor Committee. At that point, the tipped wage would be effectively eliminated.
      • The base wage for tipped workers hasn’t been increased since 1991. In the past, it was equal to between 50 and 60% of the federal minimum wage.
  • Alexander Acosta stepping down as Labor secretary: Labor Secretary Alexander Acosta is stepping down from his post, just two days after he held a news conference to defend a plea deal that he brokered for wealthy sex offender Jeffrey Epstein while serving as a U.S. attorney in Florida more than a decade ago. Acosta, a 50-year-old Harvard-educated lawyer, came newly under fire for the lenient 2008 plea deal after Epstein was re-arrested July 6 in New York City and charged with sex trafficking. Under the earlier plea agreement, Epstein served only 13 months of an 18-month term and was permitted daily furloughs to go to the office. Epstein also was required to register as a sex offender and to pay restitution to his underage victims. Read more at Politico.
  • Bloomberg Government Reports: Fighting $15, Chamber Urges House to Oppose Minimum Wage Bill: A week before the House is set to vote on a $15-an-hour minimum wage bill, H.R. 582, the world’s largest business organization is urging lawmakers to oppose it. “While the U.S. Chamber of Commerce is willing to work with members of Congress to develop a legislative package that includes an increase guided by economic conditions, $15 per hour is not that number, and the Raise the Wage Act is not that legislation,” the Chamber said in a letter sent to members of the House July 11.
    • The Chamber appears to be targeting House members, especially Democrats, who remain undecided on the bill. There have been concerns among some members that $15 is too high for rural communities and small businesses to handle in just a few years.
    • Neil Bradley, chief policy officer at the Chamber, and Glenn Spencer, senior vice president of the Chamber’s employment policy division, during a press call with reporters cited the Congressional Budget Office’s July 8 analysis of the Raise the Wage Act, which concluded 1.3 million workers could lose their jobs, as indication the bill goes too far. That same report, however, also determined that another 17 million workers would stand to receive higher pay with a $15 wage.
    • The Chamber wants the House to abandon this proposal in favor of a legislative package that “strikes the right balance” between an increase in the wage and some business-friendly measures, the letter said. The provisions sought by the Chamber are essentially a wish list of labor law reforms for the business community, including a proposal to codify the Labor Department’s pilot program for employers to self-report wage and hour violations.
  • Bloomberg Government Reports: Small Business Tax Credit Floated for $15 Minimum Wage Bill: Negotiations continue over House Democrats’ $15-an-hour minimum wage bill, with a new tax credit proposed for small businesses as the proposal moves toward a floor vote next week. The Raise the Wage Act (H.R. 582) is one of the Democratic Party’s signature workforce reforms this year. Some in the party have continued to express concern that the bill goes too far in rural communities and for small businesses.
    • In an attempt to address those concerns, Alabama Democrat Rep. Terri Sewell is floating a proposal that would introduce a tax credit for small businesses to help them absorb the increase to the minimum wage. The credit would be structured in a way that helps small businesses cover the increase in expenses due to higher wages. A business could receive a payment to cover a portion of the increase felt. This could be something businesses receive multiple times a year. It’s unclear whether this would be an amendment to the Raise the Wage Act or stand-alone bill, a Democratic staffer said.
    • House Education and Labor Chairman Bobby Scott (D-Va.) said the proposal has been discussed, but he had many questions as to how the tax credit would work. He said there likely are “serious implementation issues” with the plan based on what he knew of the proposal.
  • Murray, DeLauro Introduce Bill to “Stop Wage Theft and Improve Wage Recovery”: U.S. Senator Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Congresswoman Rosa DeLauro (CT-03) and today reintroduced the Wage Theft Prevention and Wage Recovery Act, comprehensive legislation to crack down on employers who unfairly withhold wages from their employees. This bill would give workers the right to receive full compensation for all of the work they perform, as well as the right to receive regular paystubs and final paychecks in a timely manner. It would also provide workers with improved tools to recover their stolen wages in court and make assistance available to build community partnerships that enhance the enforcement of and improve compliance with wage and hour laws. Read the press release here.
  • Forbes: The Unintended Consequences Of Raising Minimum Wage To $15: A recent study by the Congressional Budget Office, entitled “The Effects on Employment and Family Income of Increasing the Federal Minimum Wage,” was conducted to determine how increasing the federal minimum wage from $7.25 to $10, $12 or $15 per hour by 2025 would affect employment and family income. The conclusion was that increasing the federal minimum wage would have two major impacts on low-wage workers: earnings would increase for many, which would lift some families out of poverty. However, other low-wage workers would become jobless, their family income would drop and it could place them below the poverty threshold. This issue is timely, important and deserves an open and honest conversation, as there will be an upcoming vote in the House of Representatives on a bill to raise the federal minimum wage to $15 an hour by 2024.
    • The idea of raising the minimum wage is noble and commendable, but many of the arguments rely upon raw emotion and neglect sound economic ramifications that will adversely impact the same people it's trying to help. Read the full piece here at Forbes.
  • Minimum wage bill could eliminate 1.3 million jobs, CBO says: Democrats’ signature policy proposal to raise the federal minimum wage would cost roughly 1.3 million jobs nationwide, even as it boosts wages for 17 million workers and lift 1.3 million families out of poverty, according to a report by the Congressional Budget Office released Monday. The report — which offers the most detailed analysis to date of the proposed $15 hourly federal wage — is a mixed bag for House Democratic leaders, who are just days away from putting the legislation on the floor. The Democratic bill, which would phase in the $15 minimum over five years, only recently won enough support from across the caucus to reach a floor vote. CBO’s finding that a $15 hourly minimum would result in 1.3 million jobs lost was a median estimate. CBO's upper estimate of 3.7 million jobs lost poses another test for Democratic centrists, many of whom were skeptical about the impact on local businesses. (CBO's lower estimate was that the number of jobs lost would be "about zero.") Read more at Politico.
  • Justice Department needs to preserve consent decrees that keep music licensing affordable: Tom Zawistowski (Opinion): In 2002, the Ohio-based, Grammy award-winning rock group The Black Keys played their first-ever gig at the Beachland Ballroom & Tavern in Cleveland. Although they were young and nervous, their passion and strong work ethic masked any of the jitters they felt. It wasn’t long before fans started to crowd the Beachland’s concert floor and their fan base grew not just across the state, but throughout the country, as well. However, a decision that U.S. Attorney General William Barr and the Department of Justice will soon make could have a significant impact on the future of Ohio’s local artists and the small businesses who support them.
    • To play or allow for the performance of music, venues have to communicate with the institutions -- known as performing rights organizations -- that handle copyright licenses. Most of it is done through two institutions, the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI), which, together, control 90 percent of the performing rights marketplace. But music licensing is expensive. For Mad Mike’s in the suburbs of Cleveland, it costs approximately $500 a month. Many Ohio-based small businesses are struggling to keep up. Previous reporting from The Plain Dealer found that the problem was growing. Read the full piece here at Cleveland.com.
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