The 2008 Maryland General Assembly session adjourned on April 7th. The following information is a summary of some of the issues RAM tracked and lobbied on behalf of our industry. Thanks to all RAM members who contributed to our success this year by contacting legislators about important industry issues. Several narrow victories this year would not have been possible without the help of RAM members. If you have questions about these or other issues, call Melvin in the RAM office at 800-874-1313. To get more detailed information about this legislation, visit the Maryland General Assembly website at http://mlis.state.md.us.
HB 40/SB 344 – Flexible Leave Act:
PASSED
This legislation, sponsored by Delegate Ann Marie Doory (D-43 Baltimore City) and Senator Rob Garagiola (D-15 Montgomery), requires employers who offer paid sick leave to allow their employees to use such leave to care for a sick parent, spouse or child. RAM strongly opposed this bill because it would have a greater impact on small businesses with fewer employees, as employers would likely resort to hiring additional temporary staff or force other employees to work overtime without prior notice. Before final passage, the bill was amended to exempt employers with fewer than 15 employees.
HB 40 passed the House on 3/20/08 by a vote of 90 to 46. HB 40 passed the Senate on 3/29/08 by a vote of 31 to 16. If signed by the Governor, the new law becomes effective on October 1, 2008.
HB 81 – Task Force to Study the Regulation of Artificial Trans Fat:
FAILED
This bill, sponsored by Delegate James Hubbard (D-23A Prince George’s), would have created a task force to study trans fat and make suggestions about how to best phase out the use of trans fat in foodservice establishments. The restaurant industry as well as other food-related and retail industries would have been represented on the task force. RAM supported this legislation because it was much better than an outright ban. Last year, Delegate Hubbard tried to pass a statewide trans fat ban. RAM opposed that legislation, which failed.
HB 81 passed the House on 3/14/08 by a vote of 120 to 13. HB 81 failed in the Senate Finance Committee on 4/1/08 by a vote of 5 to 6.
HB 613/SB 998 – Maryland Education Fund (unredeemed Gift
Certificates/Cards):
FAILED
This bill, sponsored by Delegate Joseline Peña-Melnyk (D-21 Prince George’s) and Senator Catherine Pugh (D-40 Baltimore City), would have required that unredeemed gift certificate/gift card balances be considered “abandoned property” after expiration and remitted to the State Comptroller for use in public education funding. This forfeiture of unredeemed revenue to State government is commonly known as “escheatment.” Gift certificates/cards without expiration dates were not subject to the provisions of this legislation. RAM strongly opposed this bill because many smaller restaurants use the revenue from unredeemed gift certificates/cards to underwrite the costs of their certificate/card programs. Moreover, Federal and Maryland tax code requires that unredeemed gift certificate/card revenue be reported and taxed as income after two years. Because most businesses continue to accept expired certificates/cards, it was unclear if businesses would be reimbursed by the State for the value of gift certificates/cards that are redeemed after such abandoned property has been remitted to the State. (Note: Effective July 1, 2006, all gift certificates/cards sold in Maryland may not expire sooner than four years after the date of sale).
HB 613 never received a vote in the House. An amended version of SB 998 passed the Senate Finance Committee on 3/26/08 by a vote of 6 to 5. The bill was also referred to the Senate Education, Health and Environmental Affairs Committee, which voted unanimously (on 3/27/08) to reject the Senate Finance Committee amendments and support the original bill. Unable to resolve differences, the Senate Finance Committee effectively killed the bill by reporting “No Recommendation.”
HB 627/SB 328 – Unemployment Insurance Eligibility –
Part-Time Work:
FAILED
This legislation, sponsored by Delegate Herman Taylor (D-14 Montgomery) and Senator Delores Kelley (D-10 Baltimore County), would have allowed laid off part-time employees to qualify for unemployment benefits while they searched for new part-time work. Currently, such employees are eligible for benefits only if they are seeking full-time work. RAM strongly opposed this bill because a recent survey of our members indicated that 85 percent oppose unemployment benefits for those seeking part-time work. Moreover, broadening the eligibility requirements in this manner would have increased the number of people applying for benefits, accelerated the depletion of the trust fund (which could potentially increase rates for all employers), negatively affected employer experience ratings and increased the amount of time that employers spend contesting bogus benefit claims. After passing the Senate, this legislation seemed destined to become law. However, thanks to RAM members who contacted their lawmakers, this bill failed in the House on the last day of Session.
SB 328 passed the Senate on 3/18/08 by a vote of 25 to 22. SB 328 failed in the House Economic Matters Committee on 4/7/08 by a vote of 10 to 10.
HB 654 – Labor and Employment – Shift Breaks :
FAILED
This bill, sponsored by Delegate Roger Manno (D-19 Montgomery), would have required that employers with 50 or more employees provide a 30-minute shift break to employees who work more than five consecutive hours. RAM strongly opposed this legislation. While smaller employers were exempted in this bill, this legislation would have made compliance difficult for many larger restaurants, chain restaurants and caterers. On busy nights when dining rooms are full, it would be difficult for many restaurants to ensure adequate service to customers if forced to comply with such a mandate. Moreover, most restaurant servers arrive at 4pm to work through dinner service. Providing servers with a break after five hours would put most shift breaks in the middle of dinner service, which is the busiest time of the night.
HB 654 passed the House Economic Matters Committee on 3/28/08 by a vote of 12 to 10. Because of strong lobbying efforts by RAM and our members, this legislation was never scheduled for a House floor vote, which effectively killed the bill.
HB 872/SB 852 – Public-Private Health Care Programs:
PASSED
This legislation, sponsored by Delegate Shane Pendergrass (D-13 Howard) and Senator Edward Kasemeyer (D-12 Howard), allows local public-private partnerships to provide basic health care services to the uninsured. RAM expressed several concerns about this legislation. Our primary concern was that such a public-private health care program would siphon employees away from employer-sponsored plans. Under Maryland’s current small group market program, a health carrier may deny group coverage to an employer if less than 75 percent of the employer’s eligible employees elect to participate in the employer’s group plan (excluding those employees already covered under a spouse’s plan or another employer’s plan). If the public-private health care programs certified through this legislation siphon small group participants from employer plans, many small businesses may find it difficult to maintain the 75 percent participation rate that is required to keep their health carriers. Moreover, this could reduce the overall number of employees participating in Maryland’s small group market, which could lead to increased costs. Legislators agreed to amend this legislation to address our concerns. While not perfect, the bill now includes language that restricts the eligibility of applicants who voluntarily terminate their employer-based plans. Such public-private partnerships must also establish procedures to determine if the program has encouraged employees of small employers to drop insurance coverage.
SB 852 passed the Senate on 3/21/08 by a vote of 47 to 0. SB 852 passed the House on 3/27/08 by a vote of 138 to 0. If signed by the Governor, the new law becomes effective on June 1, 2008.
HB 904, HB 1310/SB 562, SB 232 – Alcohol Tax Increase:
FAILED
All of these bills, introduced by Delegate Ana Sol Gutierrez (D-18 Montgomery), Delegate William Bronrott (D-16 Montgomery), Senator Richard Madaleno (D-18 Montgomery) and Senator Jennie Forehand (D-17 Montgomery) respectively, would have substantially increased alcohol taxes. RAM strongly opposed all of these bills because increasing alcohol taxes on top of the recent sales tax increase would have amounted to an unfair double hit on the restaurant and bar industry.
These bills never received Committee votes.
HB 1137/SB 599 - Force-Feeding Birds – Foie Gras Ban:
FAILED
This legislation, sponsored by Delegate Tanya Shewell (R-5A Carroll) and Senator Joan Carter Conway (D-43 Baltimore City), would have banned the production, transport and sale of foie gras (fatty duck or goose liver) statewide. As a result of strong lobbying efforts by RAM and member chefs, this bill was withdrawn by the sponsors. The withdrawal of this legislation was a critical win for restaurants because banning foie gras would have set a precedent for animal rights activists to push for banning other menu items for ethical reasons.
This bill was withdrawn.
HB 1235 – Payment of Overtime – Calculation:
FAILED
This bill, sponsored by Delegate Brian Feldman (D-15 Montgomery), would have required overtime to be calculated based on an 8-hour workday, if such a calculation exceeded wages paid using the traditional 40-hour workweek computation method. RAM strongly opposed this bill because it did not take into consideration unique scenarios in our industry that may require employees to work additional hours on some days and fewer hours on other days, provided that no more than 40 total hours are worked within a week. In the restaurant business, a server may work five hours on a slow weekday, but work 10 hours on a busy weekend day. Moreover, Federal overtime rules have long been based on a 40-hour workweek. To change the rules in Maryland would have confused both employers and employees.
This bill never received a Committee vote.
HB 1580 – Unemployment Insurance – Maximum Benefit Increase:
FAILED
This legislation, sponsored by Delegate Hattie Harrison (D-45 Baltimore City), would have increased the maximum unemployment insurance weekly benefit to $500 by the year 2010. The current maximum weekly benefit is $380. RAM opposed this legislation because the purpose of unemployment insurance is to provide enough of a benefit to cover the cost of basic needs, but not to provide so much of a benefit as to discourage recipients from finding new jobs as soon as possible. Moreover, with a weakening economy, it was the wrong time to pass legislation that could accelerate the depletion of the unemployment insurance trust fund.
This bill never received a Committee vote.
