The Heavy Hand of Regulation
We are growing increasingly concerned with the direction of many of the pieces of legislation being considered in Augusta that will impact not only our retail members but all businesses.
Today, for example, we watched a majority of the Labor and Housing Committee vote in favor of LD 857, a bill that will increase the penalties on employers for wage violations. Under current law, the penalties range from $100 for the first violation and $500 for additional violations. Under the proposed bill, the fines will increase to $500 for the first violation, and from $500 and up to $2,500 for subsequent violations. It would also award an aggreived employee 2x back wages and would double the number labor inspectors.
You would think that the problem of wage violations is pervasive, however, the data doesn't back it up. The Maine Department of Labor issued their annual report on wage and hour violations recently and here's what it said:
There are 54,000+ businesses in Maine and the state received 334 complaints in 2018. Of those, 32 were outside the jurisdiction of the Department of Labor. Of the remaining 302 complaints, the department took final action on 100 cases where violations occurred and assessed penalties of just under $45,000 and recovered $261,243 in lost wages to 347 Maine workers. Of the 334 total complaints, 177 did not involve a bona fide violation of Maine's wage and hour laws.
Without question, if Maine's wage and labor laws are being violated, it should be corrected and the employee should be made whole. However, the data does not show a widespread problem that needs increased penalties and new inspectors.
On other fronts, there are more than 20 bills that would change Maine's workers' compensation system and many of them would not only add cost to the system, but they would undo many of the changes to the system that were made in the 1990's. Those changes were the result of a state shutdown over the unsustainable rising cost of workers' compensation and insurers were leaving the state. Since that time, Maine's workers' compensation rates have dropped nearly 60% and our workplaces are safer than ever.
The Taxation Committee is considering a bill, LD 903, that would push Maine into the top 5 states with the highest corporate tax rate. We are already #9 on the list but why be top 10 when you can be top 5? Another bill would have increased Maine's minimum wage to $15 per hour (even though we haven't raised it to $12 yet as the current law dictates).
Lastly, we just got our first look at LD 1345, a restrictive scheduling bill that would require employers to compensate employees with additional hours if schedule changes are made within two weeks of the schedule being set. Employers would have to compensate an employee with one to four hours of additional pay if a schedule change is made with less than 24 hours notice. This is a crazy idea that started in San Francisco and has slowly been spreading to other communities.
We could list a number of other bills (like the one that would require retailers to register with the state to sell balloons), but this would be a much longer post. One of the business advocates recently asked a legislative committee, "Where are the bills that will lower the cost of doing business in Maine?" They seem to be in short supply.