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BPAA State Policy Update - January 1, 2021

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COVID-19 Updates and Tracking

 

COVID-19 Updates

  • New Penn. COVID-19 restrictions will be allowed to expire next week, Gov. Wolf says The new COVID-19 mandates that have been in effect in Pennsylvania since the week before Christmas will be allowed to expire next week, Gov. Tom Wolf announced in a virtual press conference on Wednesday. Wolf initially announced the new restrictions on Dec. 10 that most notably prohibited indoor dining at Pa. restaurants for a three-week period. Read more here at WPXI.

 

  • Michigan extends indoor dining ban but allows casinos, cinemas, bowling alleys to reopen Gov. Gretchen Whitmer and state officials have extended a ban on in-person dining at restaurants through Jan. 15, while reopening casinos, bowling alleys and stadiums as well as allowing for in-person learning at Michigan high schools. The casinos, cinemas, bowling alleys and stadiums are allowed to reopen on Monday with restrictions, according to a Department of Health and Human Services document obtained by The Detroit News. Their capacity will be capped at 100 people, food and drink concessions must remain closed and social distancing must be observed. Read more here.

 

  • Some states buck federal vaccine recommendations and prioritize elderly over essential workers Some of the most populous states are shelving federal recommendations and making coronavirus vaccines available to the elderly before providing access to grocery store employees, transit staffers and other front-line workers. Officials are pursuing such strategies in Florida and Texas, where a combined 50 million people live. The divergence reflects differing needs in a highly diverse country where the coronavirus has killed unevenly, but it also highlights an emerging patchwork that could pose obstacles for the nationwide immunization campaign to corral the pandemic.
    • “We are not going to put young, healthy workers ahead of our elderly, vulnerable population,” Florida Gov. Ron DeSantis, a Republican, vowed last week in an address at The Villages, the nation’s largest retirement community.
    • A top infectious-diseases official in Texas, Imelda Garcia, said focusing on adults 65 and older and people with chronic conditions “will protect the most vulnerable populations.”
    • In Ohio, Gov. Mike DeWine, a Republican, is adopting a similar approach but also including school staffers in the early phase, emphasizing the need to return to in-person learning. Read more here at the Washington Post.

 

  • NC adjusts COVID vaccine plan to prioritize older adults and essential workers North Carolina Gov. Roy Cooper said Wednesday he would adjust the state’s vaccination priorities to move up adults 75 and older and health care workers and frontline essential workers who are 50 years old or older. The state received its first rounds of vaccines in mid-December. Under the current Phase 1A of the vaccine distribution, health care workers who interact directly with COVID-19 patients are the first to be vaccinated, followed by those living or working in long-term congregate care facilities, according to the state’s plan that follows guidelines from the Centers for Disease Control and Prevention. Read more at News Observer.

 

  • Biz restrictions ease with new county COVID level Owners and customers of Douglas County, OR bars, restaurants, gyms and other places where fun happens will be ringing in the new year with a little extra joy and enthusiasm on Friday with word that many establishments will reopen for indoor use. The reopenings follow the news this week that Douglas County has had lower counts of the coronavirus over the last couple of weeks, which in turn, prompted Gov. Kate Brown to drop the county from extreme risk to high risk. Under the new “high risk” level, bars, restaurants, gyms, bowling alleys and other businesses can reopen to serve customers indoors up to 25% of their capacity, and a maximum of 50 people inside at any one time. At TenDown Bowling & Entertainment in Roseburg, co-owner Mariah Smith said the bowling alley and Splitz Bar & Grill will open for indoor business Friday. Smith said everyone is excited about the change. Read more here.

 

  • Minnesota Offers $216 Million in Relief to Small Businesses Minnesota took a pass on tax relief for businesses affected by the Covid-19 pandemic, but the state will provide more than $200 million in direct support under legislation that moved through the Legislature late Monday. Both the Senate and the House approved roughly $216 million in aid primarily benefiting restaurants, bars, and other businesses forced to restrict operations during the public health emergency. The bill, S.F. 31, also waives certain business fees and penalties, and extends state unemployment insurance benefits by 13 weeks beginning Dec. 27. The vote in the Senate was 62-4. Late in the evening the House voted 117-13 to support the measure. Read more at Bloomberg.

 

  • Texas AG sues city of Austin over Covid-19 dining restrictions for New Year's weekend The Texas AG sued the city of Austin on Wednesday after local officials placed new Covid-19 restrictions on dining services for the New Year’s weekend. Attorney General Ken Paxton, a Republican, filed a petition for temporary injunction and a temporary restraining order in Travis County District Court against the directive, which limited restaurants to drive-thru, curbside pickup, takeout, and delivery services between 10:30 p.m. to 6 a.m. from Thursday to Sunday.
    • Austin Mayor Steve Adler and Travis County Judge Andy Brown, both Democrats, introduced the new four-day restriction to limit social gatherings over the holiday weekend after the state reported a record number of hospitalizations and new cases.
    • In a letter on Wednesday, Paxton said the new directive violated a previous order by Gov. Greg Abbott and directed both officials to rescind or modify the order. Read more here.

 

Minimum Wage and Labor

  • 2021 Minimum Wage Increases Set to Take Effect Many employers may be eager to put 2020 in the rearview mirror.  But before ringing in the New Year, employers should carefully evaluate whether they need to make any changes to their current practices to ensure that they remain in compliance with state and local laws, including those relating to minimum wage.
    • Florida made headlines in November when voters approved a measure that would gradually increase the state’s minimum wage to $15 per hour by 2026.
    • California, Connecticut, Illinois and Maryland are among the other states that have approved their own pathways to hit $15 per hour over time.
    • As reflected in the chart below, in 2021, minimum wage will increase in more than two dozen states, with most of the changes set to take effect on January 1.  Minimum wage will also increase at the local level in a number of counties and cities.  Accordingly, employers with minimum wage workers should consult with counsel to ensure that their compensation practices are compliant with the laws in all of the jurisdictions in which they operate. See the chart here to view the changes in minimum wage levels for the various states.

 

  • Changes in paid leave provisions Paid leave at work is another area set to see changes — both up and down — in the new year. During the initial response to the pandemic, the Families First Coronavirus Response Act expanded the Family and Medical Leave Act with new paid options for workers of some companies. But those provisions expire at the end of the year and won’t be extended by the latest stimulus deal. As they are set to expire, certain states have announced new paid leave protections. In New York, Governor Andrew M. Cuomo recently announced that New Yorkers can begin using new sick leave benefits on Jan. 1, 2021, which give workers one hour of paid sick leave for every 30 hours they work.
    • “Now, as we continue to beat back COVID and build a stronger New York, we are expanding this fundamental right to all New Yorkers," Cuomo said in a statement.
    • In addition, Colorado approved a ballot initiative in November to create a paid family and medical leave insurance program in the state. The program will create a government-funded program to provide 12 weeks of compensated time off but won’t kick in until 2024.

 

  • N.J. Minimum Wage Increasing to $12 as Critics Cry Unaffordable New Jersey’s minimum wage will rise to $12 per hour on Friday even as businesses are struggling to stay open and critics are saying the higher cost will make a pandemic recovery even tougher.
    • Governor Phil Murphy, though, is standing by the $1 increase, mandated by legislation he signed in 2019, as a positive for employees whose hours may have been cut amid other hardships since March, when New Jersey reported its first Covid-19 case.
    • New Jersey’s minimum wage will rise to $15 in 2024 from $8.85 in February 2019. Twenty-nine U.S. states have minimum pay above the $7.25 federal rate, according to the National Conference of State Legislatures, a Washington-based lobbying group.
    • Of the two dozen states that have scheduled increases in 2021, Virginia rolled back its $9.50 start date to May 1 from Jan. 1, citing economic hardship. In New Jersey, Republican lawmakers in 2019 had argued for an option to delay increases in the event of recession or other fiscal calamity.
    • The New Jersey Business and Industry Association and the New Jersey Chamber of Commerce were among those opposed to the lack of an emergency delay option. Amid the pandemic they argued that businesses were burdened by mandatory closings earlier this year, personal protective equipment costs and reduced hours and indoor occupancy caps.
    • Since March 21, New Jersey has received 1,894,611 initial unemployment claims, according to data released Thursday. For the week ended Dec. 26, the labor department received 20,460 claims, the highest total for the month, as some temporary holiday employment ended.
    • Almost one-third of New Jersey small businesses that were open in January weren’t operating as of Dec. 9, according to data compiled at TrackTheRecovery.org, a project led by Harvard University. Nationally, the figure is 29%. Story from Bloomberg Government.

 

Tax Update

  • New Jersey Lawmakers Approve Corporate Tax-Break Program New Jersey lawmakers have approved a new economic-development incentive program that authorizes $14 billion in corporate subsidies over seven years. Gov. Phil Murphy, a Democrat who campaigned on reining in New Jersey’s tax-credit programs and is up for reelection next year, said he would sign the bill into law. The governor said the new incentives will be better controlled and targeted toward specific economic-development goals, such as innovation startups and brownfield remediation. Critics said the tax credits give up too much potential tax revenue at a time when New Jersey’s budget, like many states’, has been walloped by the coronavirus pandemic. Read more at the Wall Street Journal.

 

  • Bloomberg Tax Virus Briefing: Where Will States Turn for Revenue as They Recover? A number of them are looking to the digital economy—and the likes of Amazon and Netflix. State lawmakers are preparing bills for their 2021 sessions, aiming to provide for levies on streaming services and e-commerce that isn’t already taxed. Maryland could try again to tax digital companies’ gross receipts, and it may try early to override the governor’s vetoes of two bills: a measure that would tax digital giants’ gross receipts and a bill that would apply the 6% sales tax to digital music and books. In Georgia, a House bill would apply state sales tax to most digital products. There will be a push to tax tech companies “in ways that achieve parity with the traditional goods and services economy,” says Carl Davis at the Institute on Taxation and Economic Policy. “The sales tax laws are generally lagging behind.”
    • Just before Christmas Day, four states joined the court case that New Hampshire filed in October against Massachusetts’ taxation of people who are newly working from their New Hampshire homes because of the pandemic, instead of commuting to employer locations in Massachusetts.
    • It isn’t only states. Some cities are dealing with legal action—or will face it later—over worker income taxes on employees who used to work at city locations but now telecommute from elsewhere. Read more at Bloomberg Government.

 

  • New York Among High-Tax States Resuming Workarounds on SALT Cap High-tax states trying to help residents avert the $10,000 federal cap on deductions for state and local taxes are resuming efforts that were largely sidelined during the pandemic.
    • A half-dozen states from New York to California are slated in 2021 to take up workarounds to the cap following IRS approval last month of tax mechanisms that seven states have in place for pass-through businesses like partnerships and S corporations.
    • Some Democrats in Congress have pledged to pursue raising the deduction cap, a move that would likely affect states’ actions. Even working with the new Biden administration, however, the effort will be an uphill fight.
    • Minnesota and Alabama will join in on anti-cap efforts from high-tax states next year with proposed workarounds of their own, and the potential such mechanisms have as much-needed revenue raisers could embolden more states to follow.
    • The workaround approach the IRS approved has limited appeal, since it applies only to owners of pass-through businesses. Still, as other state approaches were struck down by the IRS, pass-through workarounds remain attractive as the sole option blessed by the agency.
    • Each state’s workaround is unique, although they all essentially use an extra, mostly optional, business-level tax on owners of pass-through businesses, which the businesses can pay in exchange for a credit to redeem on their personal income taxes. Since the federal SALT cap only applies to individuals, it doesn’t impact the business-level tax that states created for workarounds. Read more at Bloomberg Government.
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