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Employment Regulations On Ballot

By Joanne Deschenaux

This coming Election Day, voters in 18 states will decide 76 citizen-sponsored initiatives, which is the second-highest total number of initiatives on the ballot in the last 100 years, according to the National Conference of State Legislatures (NCSL).

Of particular concern to employers on Nov. 7 will be the flurry of proposals to raise the minimum wage, which are on the ballot in Arizona, Colorado, Missouri, Montana, Nevada and Ohio. Kathleen A. Coulombe, state affairs specialist at the Society for Human Resource Management, notes that people in these states will likely head to the polls in November in larger numbers than would otherwise be the case to decide the fate of these minimum wage proposals. The NCSL expects most or all of them to pass.

The minimum wage, instituted by the federal government in 1938, is the lowest wage that can be paid to most workers. It was last increased in 1997 to $5.15 per hour and $2.13 per hour for workers who receive tips.

States can set a higher minimum wage. According to the NCSL, as of August 2006, 23 states and the District of Columbia had adopted a minimum wage higher than the federal minimum wage. Government figures provided by the NCSL show that wages are not keeping up with inflation. Raising the wage from $5.15 to $6.85 an hour would boost a worker's annual pay from $10,712 to $14,248.

Currently four states—Florida, Oregon, Vermont and Washington—annually index their minimum wage to reflect changes in the cost of living. All of the proposals on state ballots would similarly index the minimum wage.

Arizona: Arizona currently has no state minimum wage law, so employers in the state must comply with the federal minimum wage rate of $5.15 per hour. Proposition 202 would establish a state minimum wage law and raise the minimum wage to $6.75 per hour beginning Jan. 1, 2007. The state minimum wage would be increased each Jan. 1 to reflect changes in the cost of living.

Colorado: Amendment 42 proposes a change to Article XVIII of the Colorado Constitution, which would raise the minimum wage from $5.15 per hour to $6.85 per hour and adjust the wage annually for inflation. The minimum wage for workers who regularly receive tips would go from $2.13 per hour to $3.83 per hour and would be subject to the annual adjustment by the same dollar amount as the minimum wage for non-tipped workers.

Missouri: Proposition B would increase the state minimum wage rate to $6.50 per hour, or to the level of the federal minimum wage if that is higher, and adjust the state minimum wage annually based on changes in the Consumer Price Index (CPI).

Montana: Initiative 151 would raise the state minimum wage, currently equal to the federal minimum wage, to the greater of either $6.15 an hour or the federal minimum wage and would add an annual cost-of-living adjustment. This measure, which would take effect Jan. 1, 2007, does not change the $4-an-hour minimum wage for a business whose annual gross sales are $110,000 or less.

Nevada: Ballot Question 6 would amend the Nevada Constitution and require employers to pay Nevada employees $5.15 per hour if the employer provides health benefits or $6.15 per hour if the employer does not provide health benefits. The rates are to be adjusted by the amount of increases in the federal minimum wage over $5.15 per hour, or, if greater, by the cumulative increase in the cost of living measured by the CPI, with no CPI adjustment for any one-year period greater than 3 percent. This measure was passed in the November 2004 election, but, in Nevada, constitutional amendments must be passed in two consecutive general elections before they may take effect.

Ohio: Issue 2 would raise the minimum wage to $6.85, effective Jan. 1, 2007, and would require an annual increase to be determined by the rate of inflation according to the CPI. Tipped employees must receive at least half of the minimum if the employer is able to demonstrate that the tips received by the employee combined with the wages paid by the employer are equal to or greater than the minimum wage rate.

Smoke-free workplace

Also of interest to employers are the proposals requiring smoke-free workplaces, on the ballot in Arizona, Nevada and Ohio. In all three states, there are actually two different proposals before the voters. One would prohibit smoking in almost all enclosed public spaces and places of employment, and one would result in a less restrictive ban with additional exceptions.

Arizona: Currently, state statutes provide that smoking tobacco is prohibited in certain areas and most state buildings. Proposition 201 would prohibit smoking in all public places and places of employment, except for limited exceptions including retail tobacco stores, veterans and fraternal clubs when they are not open to the public, hotel rooms designated as smoking rooms, and outdoor patios.

Proposition 201 would not prohibit or repeal more restrictive city, town or county laws.

Proposition 206 would make an additional exception for bars--including parts of restaurants, hotels and other establishments that sell alcoholic beverages and are physically separated with a separate ventilation system--and would pre-empt all city, town and county laws relating to smoking in bars and retail tobacco stores.

Nevada: Ballot Question 4 would prohibit smoking tobacco in most public places and places of employment. Smoking tobacco would continue to be allowed at casinos and other gaming areas, bars, retail tobacco stores, hotel and motel rooms, and private residences that are used as office workplaces.

Ballot Question 5 would prohibit smoking tobacco within public places and indoor places of employment, including some bars and parts of casinos. The proposed amendment would also allow a county, city or town to adopt tobacco control measures stricter than those provided in the text of the Question itself.

Ohio: Issue 4, which is a proposed constitutional amendment, would prohibit smoking in enclosed areas except tobacco stores, private residences or nonpublic facilities, separate smoking areas in restaurants, most bars, bingo and bowling facilities, separated areas of hotels and nursing homes, and racetracks. The amendment would invalidate retroactively any ordinance or local law in effect, and would prohibit the future adoption of any ordinance or local law to the extent such ordinance or law prohibited smoking or tobacco products in any place exempted by the amendment.

Issue 5 would enact a new chapter of the Ohio Code to restrict smoking in places of employment and most places open to the public.

If both initiatives pass, the constitution would be amended in conformance with Issue 4, but the Ohio Code would not be amended to conform with Issue 5.

Also on the ballot

Other employment-related ballot initiatives include:

• A referendum in Colorado to increase state income taxes owed for some businesses that deduct wages or other compensation paid to unauthorized aliens (Referendum H). Beginning Jan. 1, 2008, a business would be required to disclose the amount of wages or other compensation paid to unauthorized aliens that it has deducted as an expense on its federal income tax return. Its taxable income then would increase by this amount, resulting in a higher state income tax bill.
• An attempt to repeal a cut in workers' compensation benefits in Ohio (Issue 1).
• Arizona’s Proposition 103, which would make English the official language of the state.
• In the city of San Francisco, a proposal to require employer-paid sick leave for private-sector employees (Proposition F). After a three-month probationary period, every private-sector worker would earn one hour of paid sick leave for every 30 hours worked, starting in February 2007. Required leave would be capped at nine days for employers with more than 10 employees and five days for businesses with fewer than 10 workers.

Joanne Deschenaux, J.D., is senior legal editor for HR News.

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