It has been more than four months since the conclusion of the 2019 legislative session, and the LCRCC government affairs team has been making good use of that time to best serve you in the second half of our current legislative biennium, starting in January. In this legislative and government update we will cover:
- New changes announced for minimum wage, overtime rules, and employee misclassification rules including an opportunity for no-risk reviews.
- An update and opportunities to engage with policymakers on 3-acre stormwater permits.
- The latest in the continued push for carbon taxes in the state.
- Proposals from Burlington and out-of-session legislative engagement on housing issues.
- Continuations of legislative discussions on noncompete agreements, an innovation service tax, and single-use plastic.
New Minimum Wage
The Vermont Department of Labor recently announced an increase to the State’s minimum wage beginning January 1, 2020, of $0.18, or 1.7%, from $10.78 to $10.96. The calculation for this increase is determined by the Department of Labor’s Economic & Labor Market Information Division by calculating the rate of inflation using the Consumer Price Index (CPI). This adjustment also impacts the minimum wage of “tipped employees.” The Basic Tipped Wage Rate for service or tipped employees equals 50% of the full minimum wage or $5.48 per hour starting January 1, 2020. The minimum wage will continue to increase each year with inflation as calculated by the Department of Labor.
Legislation creating a new minimum wage scheme will undoubtedly be a topic of debate in the coming session, as the Democratic party failed to deliver on one of their largest goals last session.
Housing Meetings Statewide
The Senate Economic Development, Housing, and General Affairs Committee has hit the road in the months leading up to the next legislative session to discuss housing issues. The committee has already hosted two of these meetings in Hartford and Rutland. The next meeting is in Franklin County on Tuesday, October 29th from 10:30-12:30 in the City Council Chamber Room of St Albans City Hall. Expect a Chittenden County meeting sometime in the second week of January.
These meetings come after a legislative session in which housing permeated into almost every legislative conversation around the major priorities. In response, the Senate Committee on Economic Development, Housing, and General Affairs explored a $50 million housing bond, however, shelved the plan after concerns from the Treasurer about the effect on the state bond rating continued to gain attention.
Burlington Housing Changes
This month, the City Council of Burlington unanimously passed a resolution to further explore the proposals put forth by the Mayor around the City’s housing needs. The proposals involve:
- Energy efficiency in rental housing: Updating standards for energy efficiency in rental housing in order to support the City’s climate goals and reduce renters’ utility costs.
- Accessory Dwelling Units: Making it easier for people to create Accessory Dwelling Units (ADUs), which offer more flexibility for families to age in place, offset housing costs for homeowners, and create additional neighborhood-scale housing options throughout the City.
- Short-term rentals: Implementing new regulations for short-term rentals like Airbnb that help us reduce impacts on long-term housing availability and neighborhoods while balancing the economic benefit to hosts.
- Parking minimums: Reforming requirements for building new parking in residential developments in the downtown and along key transportation corridors.
- Housing Trust Fund: increasing the level of funding for the City’s Housing Trust Fund.
These issues are all issues that legislators in Montpelier will need to grapple with in the coming session making this a process to watch over the next few months.
Noncompete Stakeholder Meeting
LCRCC convened member businesses potentially affected by restricting covenants not to compete. LCRCC and representatives from member businesses are working to codify existing case law and build employee protections to prevent the misuse of these tools while allowing businesses using them reasonably to continue to do so. If you have an interest in participating in this process, or have experience with using noncompetes in your business, please reach out to our advocacy team.
Innovation Service Tax
Last year, the legislature considered a proposal to tax software accessed remotely with an Innovative Service Tax, which is sometimes referred to as a cloud or SaaS (software as a service tax) tax. Whatever the name used to describe it, LCRCC and its members are concerned with the effects of pouring cold water on Vermont’s tech innovations when they are only heating up. What kind of message would our state be sending when trying to incentivize remote workers while at the same time taxing software that is accessed remotely?
The proposal passed the House as part of a water quality bill only to be removed from the bill in the Senate and we expect it to be a topic of debate again this year. As such, LCRCC’s advocacy team facilitated a meeting with the Vermont Department of Taxes and some of our members in the tech sector to get a better understanding of the effects such a tax would have on Vermont’s innovation. What we heard didn’t necessarily put our minds at ease.
The boundaries between “platform as a service” versus “software as a service” versus. “infrastructure as a service” are opaque. This is important because of the three listed, only SaaS would be considered taxable under the proposed legislation. We will be exploring what services will and will not be taxed in the coming months. Do you use prewritten software accessed remotely on the internet for your point of sale, task management, or have a product you worry might be taxed under a new Innovation Service Tax? Please contact our advocacy team.
Employee Misclassification Changes and Assistance
The Vermont Department of Labor announced this month the adoption and implementation of new Employment Security Board Rules that establish the Unemployment Insurance Division’s appeals process pertaining to misclassification findings, debarment decisions, and penalties. The new rules went into effect on October 1, 2019; however, the Department will not begin to issue penalties or debarment decisions until November 1, 2019.
Additionally, the Department of Labor is announcing the creation of a short-term, no-risk review that will allow employers to request a review of their wage reporting practices without penalty. This program will be in effect between October 1, 2019, and March 31, 2020. Employers interested in taking advantage of this program may contact the Department.
New Overtime Rules Coming
The U.S. Department of Labor released a New Overtime Final Rule this month that becomes effective January 1, 2020, and is expected to make 1.3 million American workers newly eligible for overtime pay. DOL has updated their website with informational resources that provide details related to the rules change. They also maintain a more in-depth Small Entity Compliance Guide that provides plain-language explanations and examples. For the .pdf version of the regulation in the public register, click here.
Carbon Pricing Pushed at Local, State, and Regional Level
Burlington’s Mayor made waves last Friday when he endorsed a statewide carbon tax and unveiled research his office had done on the effect of carbon pricing on the state of Vermont. Additionally, the Mayor outlined a new plan for the City of Burlington to begin pricing carbon internally when making acquisition decisions.
At the regional level, the state’s already involved in the Regional Greenhouse Gas Initiative, or RGGI, and has been working on developing a cap-and-invest program that would apply a price on emissions from transportation in New England, dubbed the Transportation and Climate Initiative (TCI). This group released an update for the public’s consideration this month which included a proposed policy framework document and an expanded timeline for the process that would eventually see all New England states collectively participating in a cap and invest/trade market for transportation emissions. The new information can be found at this link and the Vermont TCI team will hold a meeting to engage the public on October 22nd at 6 pm via Skype Meeting or in the Pavilion Auditorium at 109 State St., Montpelier. Throughout this whole process, you can comment using the regional online form. If you have more questions, please contact LCRCC’s advocacy team.
3-Acre Stormwater Rule Letters
Properties across the state received rather vague letters this month informing them of the need to file a notification of intent to bring the property into compliance with a new 3-acre general stormwater permit. These letters were delivered to recipients because they were either under a permit that predated 2002, now meet the new threshold for stormwater permitting, or are municipalities.
Draft General Permit 3-9050 is on public notice until November 8th. There are four opportunities for public comment.
- October 28, 2019: Rutland Free Library, Fox Room at 10 Court Street, Rutland City, 2:00 – 3:30 PM
- October 29, 2019: Montpelier Pavilion Auditorium, at 109 State Street, Montpelier, 2:00 – 3:30 PM
- October 31, 2019: Milton Municipal Building, Community Room, at 43 Bombardier Road, Milton, 2:00 – 3:30 PM
- Online before November 8th through the DEC Environmental Notice Bulletin (ENB).
Did you receive one of these letters? If so, we want to hear from you what the state can do to clarify the guidance, how you intend to comply with timing allotted, and what options you’ve explored to comply.
Single-use Plastic Bags
As we reported during and after this past legislative session, Act 69 created a plastic ban targeting single-use plastic straws, stirrers, and bags as well as expanded polystyrene (EPS) in the foodservice industry. The study committee Act 69 established is currently looking at what to apply extended product responsibility (EPR) to, outside of what the state already does, as well as other single-use products they see as deserving of prohibitions. If you have concerns, please feel free to contact our advocacy team and engage with the committee, details of which can be found here. The next meeting of this committee will be Tuesday, October 22nd at 12:30.
What's new for LCRCC's advocacy team
› BYP Survey Take-Aways
By now you’ve probably seen the results of the Burlington Young Professionals survey, however, as we move into the coming legislative session, LCRCC’s advocacy team has been digging into what can be done about the bleak results. What the survey showed, summarized in one term is the “opportunity chasm” this demographic is facing. Many Vermonters experience issues in finding opportunities in housing, childcare, mid-level career opportunities which contribute to the issue of general affordability, however, for a young professional, the lack of opportunities in all these areas come at a confluence.
Vermont is not alone in these issues. As highlighted in a report by the Congressional Joint Economic Committee, our nation is seeing significant rural to urban flight and “brain drain” as larger metropolitan areas continue to be the winners in what seems to be a winner take all competition for talent and people. It’s not necessarily because these cities are trying, but that people are flowing to areas of densest opportunity.
One way LCRCC believes the state can bridge the opportunity chasm for young professionals is by addressing their student debt through state tax policy that incentives businesses who assist employees with student loan payments. Has your business explored this? If so, we’d like to hear from you.
› Building new capacity for a new session
Since the conclusion of the last legislative session, LCRCC’s advocacy team has been hard at work reaching out to members on issues we expect in the new legislative session and building capacity to better handle these issues. Do you have an issue that you are worried about in the coming session? Would you like to be more engaged in our advocacy work? Let us know – [email protected].
We look forward to working with you this session.
The Lake Champlain Regional Chamber of Commerce Advocacy Team