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Worst business laws of 2016

February 22, 2017 --

bullard-law2Bullard Law, Portland law firm

We created the Bullard Edge Awards, more popularly known as the BEAs.  Annually the BEAs recognize outstanding or infamous achievement in employment law.  There is not a nomination in every category every year.  It all depends on the year that was.

This morning the BEA committee revealed the nominees for “Worst Employment Law of 2016” live on Employment Law TV (a wholly-owned faux-subsidiary of The Bullard Edge).  Nominations for this coveted BEA went to the City of Portland (CEO Surtax law) and the City of Seattle (Secure Scheduling law).  ELTV Correspondent Max D. Lusion covered the event live in downtown Portland.  Here is his report.

*** Cut to Max D. Lusion in front of Portland’s majestic Black Box Building.  ***

MAX: I am reporting live from Portland for Employment Law TV.  Excitement is building.  You can probably feel it crackling through the screen.  We are just moments away from a major announcement about the Bullard Edge Awards.

Over the past few years, the BEAs have grown in prominence.  They may be slightly less well-known than some of the other major awards, like the Oscars and ESPYS, but it is beyond question that the BEAs have become the most prestigious employment law awards in the SW Market Street region of Portland.

Wait a minute.  There is a stirring in the atrium and I see several familiar figures approaching the podium – Clark Griswold, star of Christmas Vacation, and Buddy the Elf, star of Elf.  ELTV takes you live to the podium now.

*** Camera cuts to the podium, where Buddy the Elf is speaking. ***

BUDDY: So anyway, I apologize for being a minute late.  Papa Elf was trying to give me trip directions.
CLARK: I know a little something about vacations myself, you know.
BUDDY: Of course you do, Clark.  We could go on for hours talking about your vacation to Wally World, but we are here for an entirely different purpose.
CLARK: That’s right, Buddy.  The buzz is that we are here to talk about the BEAs.
BUDDY: — Ouch.  You need to work on your award show patter, Clark.
CLARK: Will do.  — And the first category of nominees is Worst Employment Law of 2016.  Who are they, Buddy?

*** Editor’s note: First nominee is Portland’s CEO Surtax law. ***

BUDDY: Clark, the first nominee is the City of Portland for its recent amendment to City Code section 7.02.500.  This is the so-called CEO Surtax, recently summarized by the Bullard Alert.
CLARK: Buddy, and pardon me as I squint to read the teleprompter, on December 7, 2016 the City Council, by a 3-1 margin, decided to add subsection E to the existing Tax Rate code.  The gist of the amendment is that a 10% surtax will be levied against any publicly traded corporation, above its existing business tax liability, if that company pays its CEO more than 100 times what it pays the median worker.
BUDDY: Moreover, the surtax surges to 25% where a company’s CEO is paid 250 times more than the company pays its median worker.
CLARK: The BEA committee identified two reasons for nominating the CEO Surtax for its Worst Employment Law of 2016 award.

First, the surtax is an ill-conceived attempt to have the tail wag the dog.  According to the “findings” of the Portland City Council, the problem to be addressed is income inequality in the United States.  The Council cites a variety of statistics that it says show that the percentage of total income paid to the top one percent of income earners has been increasing over the course of four decades.  The Council states that this trend is “bad for the economy and bad for democracy.”  To remedy this, the Council expresses its hope that the surtax will help company shareholders to “realize that extreme chief executive officer to median worker pay ratios reduce their profits” and that this realization will lead them to “make changes to their pay structure.”  In other words, the City is self-appointing itself as the assistants to corporate shareholders.

BUDDY: Second, the City Council makes no mention of the potential negative impact that a surtax might have on the local economy.  In a press release, Commissioner Novick states, “The surtax will also benefit the city by generating an estimated $2.5 million to $3.5 million per year.”  That will not be true if the surtax discourages companies from doing business in Portland.  The City Council clearly wants to participate in (even lead) a global discussion about wealth and income, but it may be doing that at the expense of its constituents.

*** Editor’s note: Second nominee is Seattle’s Secure Scheduling law. ***

CLARK: That is heavy stuff, Buddy.  Before we crown Portland the winner of the BEA, though, let’s reveal the second nominee in this category.  The second nominee is the City of Seattle for its adoption of Municipal Code Chapter 14.22, which is known as the Secure Scheduling Ordinance.
BUDDY: On September 19, 2016 a unanimous City Council approved this legislation and sent it to the Mayor, who signed it on September 29, 2016.  The new law, which will take effect on July 1, 2017, is said to be for the purpose of adding stability and predictability to Seattle shift workers’ hourly incomes and schedules.
CLARK: Buddy, as I understand it, the law covers retail and food service employers and requires them to provide employees with a set schedule 14 days in advance.  When the schedule changes ~ shifts or hours added or subtracted ~ the employer pays a small amount to the employee for the inconvenience.  Some would say that sounds like a suitable purpose.  Why was it nominated for the BEA?
BUDDY: Good question, Clark.  The BEA committee identified two reasons for nominating this law.

First, the law is anti-business.  It fails to strike any balance between an employee and employer interests.  Understandably, an employee has an interest in knowing his or her schedule.  However, the reality of the workplace, especially in retail and food service, is that an employer’s needs change.  Note that a 14-day advance scheduling requirement may in practice mean that an employer using two-week schedules will have to project out 28 days ~ a schedule covering January 1 to 14 would have to be posted on December 17.  That is an eternity in the retail and food service industries.  Moreover, when an employee calls in sick, fails to report for work, or quits, the employer will be forced to pay an additional hour of pay to the employee assigned to fill the void.

The Washington Retail Association describes this requirement as “a rigid, unworkable one-size-fits-all government intrusion into employer-employee relations that threatens far more complications and problems than benefits.”

CLARK: Ok.  What is the other reason cited by the BEA committee?
BUDDY: The second reason cited for this nomination is the burdensome recordkeeping required.  Per Municipal Code section 14.22.065 an employer must “retain records that document compliance” with Chapter 14.22 “for a period of three years.”  The detailed written records required include such things as schedules, documentation of employee-requested schedule changes, written communications to employees regarding additional hours, and even documentation regarding discipline leading to a reduction in hours.  Where an employer does not have a record, the law creates “a presumption, rebuttable by clear and convincing evidence, that the employer violated this Chapter 14.22 for the periods and for each employee for whom records were not retained.”
CLARK: That’s harsh.  In making this nomination did the committee cite the requirement that employers engage in an interactive process regarding scheduling?
BUDDY: I was just going to mention that as a hybrid of the anti-business and burdensome recordkeeping concepts.  Per section 14.22.030, an employee has a right to request input into his or her work schedule when hired or during employment.  If the employee’s request is due to a “major life event” such as the employee’s second job, then:
“the employer shall engage in an interactive process with the employee to discuss the request, and may require verifying information from the employee with adequate notice and reasonable time to respond.  The employer shall grant the request unless the employer has a bona fide business reason for denial and shall provide a written response.  In the event of a denial, the employer’s written response shall provide an explanation of the complete or partial denial of the request, and the bona fide business reason for the decision.”
CLARK: Well that is certainly a feature that makes the Secure Scheduling law worthy of BEA nomination.
BUDDY: Clark, those are the two nominees.
CLARK: Yes, and folks wanting to know the winner should watch the award show on ELTV.  I believe Cousin Eddie will be the emcee this year.
BUDDY: I know I will be watching from the North Pole.

*** That is the end of Max D. Lusion’s report. ***

The Bullard Edge notes that voting for the BEAs is open to the public.  Voters may select one of the nominees or write in a candidate.  We look forward to receiving your ballots.

Best regards,

The Bullard Edge 



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