January 2, 2019 by Jon Hurst, President

As we celebrate the New Year and look optimistically at the future, many small business owners are facing 2019 with fear for their profitability, given new state payroll mandates on wages and paid leave.

Effective January 1, small businesses saw the increased mandated payroll costs of a $1 minimum wage hike.  This increase is on top of a $3 increase which was just fully implemented two years ago, and is the first step of a $4 increase over 5 years.  Together, the $7 hike over 9 years represents an 88% increase over a period of time in which the cumulative inflation rate is unlikely to exceed 20%. But it isn’t just the wages of new employees, it’s the compression effect of higher wages right up the ladder, along with the mandated Social Security, Unemployment Insurance (UI) and workers compensation premiums that come with it.  And on July 1, those payroll taxes will also include a new state family and medical leave tax on employers and employees alike.

In the day and age of the smartphone, you can’t just raise prices to cover these new costs and expect consumers to still pay you for your goods and services when they can buy anywhere.   So to balance out the new mandated payroll costs, Beacon Hill should do the following in 2019 to ease costs:

1. Fix the Small Business Health Insurance Crisis.  Massachusetts has the second lowest individual premiums, yet the second highest small business premiums in the country.  At the same time large employers pay far less for far better coverage than do small employers.  That is shockingly unacceptable, and is due to discrimination under the law and in the markets. 
2. Close the Loopholes In The UI System.   Massachusetts is ranked 50^th by the Tax Foundation for unemployment insurance systems.  In short, employers and employees alike abuse the system due to an inadequate eligibility system.
3. Prevent Local Ordinances Affecting Consumer Choices.  Many states by law prevent local ordinances affecting interstate commerce, but MA does not.  So a patchwork on tobacco sales, plastic bag usage, water bottle sales, etc., has emerged across the state due to organized special interest group efforts before 351 cities and towns.  These affect local stores, but unfortunately not the new Internet competition.  For consumer choice and small business competitive reasons, require statewide standards for consumer product sales. 
4. Pass a Teen Wage.  Thirty-nine states have them.  Let’s make sure 14-17 year olds have the learning and earning opportunities they need, and small businesses have the incentives to hire them.

August 7, 2018 By Jon Hurst, President

The so-called “Grand Bargain” was signed into law in late June, and with its’ passage, three initiatives were kept off the November ballot.  One question was RAM’s rollback of the sales tax; and the other two were the $15 minimum wage and the paid family and medical leave payroll mandates. 

Make no mistake about it—without the existence of RAM’s sales tax initiative, the political pressure to remove these two costly labor mandates from the ballot would never have occurred.  The sales tax ballot initiative created the environment and the leverage to move closer to middle ground through compromise, rather than facing near certain voter passage of the labor initiatives.  Neither the Legislature nor the advocates pressing the labor mandates wanted to see a sales tax rollback with a $1 Billion price tag. 

Many factors contributed to RAM’s decision to agree to pull our sales tax ballot initiative in exchange for the agreement.  First, two major court decisions in June rendered our sales tax proposal a much tougher sell with voters.  They included a MA SJC decision eliminating the so-called “Millionaires Tax” from the November ballot, and a U.S. Supreme Court decision on internet sales tax in the SD vs. Wayfair case.  While both decisions were arguably good for our industry and the state, they also made the case for a sales tax cut more difficult without funding a multi-million dollar advertising campaign.

The more important factor leading us to the seek agreement was our ability to mitigate the effects of what would have been a near certain passage of the two payroll mandate initiatives through negotiations.  More reasonable and less costly requirements, with longer phase-in periods were vital objectives.  Movement to the public policy center on phasing out the antiquated, only in Massachusetts retail Sunday/holiday premium pay requirement; more affordable restaurant tip wages; no annual inflation increases and a slower phase-in of the minimum wage; a paid leave law which set fairer wage replacement rates and better distributed costs between employers and employees; and establishment of a permanent sales tax holiday as an important incentive for our consumers to invest their discretionary dollars in our local economy, all weighed in favor of striking a deal.     

May 29, 2018 by Jon Hurst, President

As RAM members know, your association has been working for almost a year to qualify a ballot initiative to roll back the sales tax to the 5% rate last seen in 2009. The measure also authorizes an annual two day sales tax holiday.
Sufficient signatures have been obtained to file with the Secretary of State by the July 3rd deadline to qualify the measure for the November ballot. But important negotiations are underway on Beacon Hill with various ballot measure sponsors in order to achieve middle ground and avoid the questions being placed before the voters. Besides the sales tax question, two payroll mandate proposals are being negotiated: the initiative to raise the minimum wage to $15 over 4 years, and another initiative to create the most costly and extensive paid family and medical leave mandate in the country.
Complicating the negotiations are pending court cases on whether a constitutional amendment to increase the state income tax by 4% for those persons earning $1 Million or more will reach the November ballot. That case is before the MA Supreme Judicial Court. And before the US Supreme Court is the landmark case on whether states can mandate out of state internet sellers to collect the sales tax from local consumers (SD vs Wayfair).
Whether RAM moves forward with the ballot question on the sales tax rollback will be based on a combination of the outcome of those court cases; as well as on the ability of negotiations to produce more reasonable payroll mandate measures; while still giving taxpayers and local small businesses some sales tax relief to incent local consumer spending rather than driving purchases to NH or to Silicon Valley.
In case we do move forward with the sales tax ballot question, investments are being made for a campaign. The 10,792 required voter signatures for the second round of qualification have been obtained and will be held for potential filing. In addition, the Beacon Hill Institute has completed a study which confirms the economic benefits of lowering the sales tax—particularly for lower income consumers and our small businesses—as well as the fact that the tax loss is far less than what opponents might suggest due to increased local investment and jobs.
What links the high and avoidable sales tax and the proposed costly state labor mandates together is that both make it harder for local sellers to attract and retain local consumer spending due to the resulting and obvious higher customer prices.
In the age of the smart phone, we must all adapt. That includes our existing and proposed laws under the purview of our public policy leaders--who are all very quick to say they support small businesses and our Main Streets. To have laws which make local consumer prices far higher than our competitors, whether through a high sales tax or through unaffordable payroll mandates, is simply antiquated, unacceptable and counterproductive state economic policy. In the 21st Century, that fact is certainly crystal clear to anyone that has ever worked to make a payroll, and to attract consumers armed with unlimited spending options.
More than ever, the employer community, labor, and elected officials should all be working together to keep consumer spending--which is 70% of our economy—right here in Massachusetts. The next few weeks will be telling as to whether that cooperation can and will happen.

JAN. 22, 2016 • BY RYAN KEARNEY

The following letter to the editor appeared in the Boston Herald's January 22nd print edition. It was prepared in response to a previously published Herald Op-Ed discussing the inherent flaws of the "Fight for $15" campaign. In addition to the general concerns identified in the Op-Ed, the LTE shines a light on two major outliers in Massachusetts wage law which would result in additional costs to the reatil industry in the event a $15 minimum wage proposal proved successful.

$15 mandate goes too far

The Herald is correct in saying that “the ‘Fight for 15’ campaign is flawed” (“Wage protest on radar,” Jan. 19). Presented as a grassroots social movement, this union-led campaign is designed to accomplish through one-size-fits-all legislation what its leaders could not accomplish at the negotiation table. This approach ignores the negative economic impact to small employers — our primary engine for new job growth — who will struggle to afford new labor costs. The result will be fewer job opportunities for the very workers the campaign claims to support.

JAN. 6, 2016 • BY BILL RENNIE

On December 22, 1982, Governor Ed King signed a bill into law to allow retail stores to open on Sunday. The law required that most retail employees also be paid time and a half wages for voluntary work on Sunday. The minimum wage in 1982 was $3.35. Music fans were shopping in record stores for Michael Jackson’s newly released album, Thriller, on cassette tape.

Times have changed. The economy has changed. There are almost no record stores left and cassette tapes are obsolete. Yet, the Sunday premium pay law lives on. With the Massachusetts minimum wage set to increase to $10.00 on January 1, the minimum wage on Sunday for a 16 year old cashier will be $15.00 an hour, while across the border in New Hampshire the minimum remains at $7.25. By 2017 it will increase to $16.50. Sundays in retail have become unaffordable in Massachusetts.

Retail is the only industry in the Commonwealth required by law to pay a Sunday premium. No other sector – hospitality, government, health care, entertainment – is required to do so, and only one other state, Rhode Island, shares this requirement.

MAY. 19, 2015 • BY RYAN KEARNEY

Yesterday Attorney General Maura Healey announced her decision to issue safe harbor from the Massachusetts Paid Sick Leave Law for employers with existing paid time off policies. The safe harbor provides qualifying employers a six-month transition period before they must bring their policies into compliance with the requirements specified in the law. A copy of the announcement can be found here.

In order to be eligible to take advantage of the safe harbor provision an employer’s policy must be

in place as of May 1, 2015,
provide at least 30 hours of job protected paid time off during the 2015 calendar year, and
available to all workers—full-time and part-time; employers that currently have a policy for full-timers but not part-timers may add part-timers to the existing policy to qualify.
Employers taking the safe harbor will still have to bring their policies into compliance with the requirements of the law by January 1, 2016. Employers not meeting these criteria are required to adopt and implement a compliant policy by July, 1 2015.

JUN. 11, 2015 • BY RYAN KEARNEY

Safe Harbor Update and Model Employer Notification Poster

In May, Attorney General Maura Healey announced her decision to issue safe harbor from the Massachusetts Paid Sick Leave Law for employers with existing paid time off policies. Yesterday, in response to growing concerns from the employer community, the AGO issued an update providing further guidance as to how employers are to comply with the safe harbor provision. The AGO’s clarification may make the safe harbor a viable option to more employers than originally anticipated.

The safe harbor provides qualifying employers a six-month transition period before they must bring their policies into compliance with requirements specified in the law. An employer is eligible to take advantage of the safe harbor if:

MAY. 6, 2015 • BY RYAN KEARNEY

AG Publishes Proposed Paid Sick Leave Regulations

The Office of Attorney General Maura Healey (AGO) recently published draft regulations for the new Paid Sick Leave Law that was adopted by voters at the ballot last November. The regulations attempt to address ambiguous provisions of the law and provide employers guidance as to how they are to comply. For the most part, the draft regulations address RAM’s initial concerns submitted to the AGO. However, the regulations themselves may present additional questions.

As RAM determines whether a second round of comments to the AGO is necessary, all employers are strongly urged to review the proposed regulations and provide RAM with questions and concerns. A summary of the law, a copy of Proposed Regulation - 940 C.M.R. 33.00 - Earned Sick Time, and a schedule of public hearings on the matter can be found on the AGO’s website at the following link: http://www.mass.gov/ago/doing-business-in-massachusetts/labor-laws-and-public-construction/earned-sick-time/