Dear WH&LA Lodging Member:

In addition to the major threat on the use of Room Tax revenue in our state (see Friday's Capitol Insider), which needs considerable calls and emails from members to all state legislators within the next three days to stop or at least slow it down for now, we also have two other also important issues needing action.   

Joint Employer Liability

This relates to a recent National Labor Relations Board (NLRB) decision that redefines "joint employer" in a way that greatly expands the potential liability of franchisors (and those contracting services) for employment actions of their franchisees (and contracted firms). This expansion could considerably shift how these relationships work. We are seeing efforts made at both the federal and state levels to try to return either the definition or the liability to the way it has been so that a franchisor or someone contracting services does not have to get engaged in more active oversight of employment practices of franchisees and contracted service providers. 

• FEDERAL LEVEL: AH&LA and the Coalition to Save Local Business are working on an effort to include language in the end of the year omnibus spending bill that would block the NLRB's decision and would restore the former definition of "joint employer" to protect the small business and franchise models. They are asking the  lodging industry to contact your Congressman to ask for their support. Especially important is for those in House Speaker Paul Ryan's district - but additional voices of support are needed too to ask for the support of all Congressional Representatives to add restoring the previous definition of "joint employer" in the omnibus bill to avoid destroying the current franchise and contracting models for businesses that are so successful. Contacts are needed by tomorrow!
• STATE LEVEL: Last Thursday, State Sen. Chris Kapenga introduced SB 422 as an attempt to diminish the effect of the joint employer ruling from a different angle. This bill excludes a franchisor as the employer of a franchisee for certain laws relating to employment, such as worker's compensation, unemployment insurance, employment discrimination, minimum wage, and wage payments. Exclusions are provided if the franchisor has agreed in writing to assume that role or if the franchisor has been found to have exercised a type or degree of control over the franchisee that is not customarily exercised by a franchisor for the purpose of protecting the franchisor's trademarks and brand. This bill was assigned to the Senate Committee on Labor and Government Reform. WH&LA will keep members advised if a hearing is called or if a call to action is needed. We do recommend, however, that if there is an opportunity to express your support of this bill to your State Senator, that will help the bill to gain more support.
  

"Residential Dwelling" Rentals

LRB-3993/1 was routed late last week for co-sponsors in the state legislature by bill sponsors State Sen. Frank Lasee and State Rep. Scott Allen, with a very tight turn around so that this could have a hearing quickly in Committee. This bill is very close to a bill introduced in 2012 by Sen. Lasee, except that bill was revised at WH&LA's request to remove the major components, and the bill was stopped in Committee. This bill, supported by the Realtor's Association, does make a limited amount of improvements to the original objectionable components, and thus is a little better overall, but still does not require uniform licensure and leaves more up to local government rather than the state. The following are the key components: 

• The rental of a "residential dwelling" that always rents for seven consecutive days or longer may not have local ordinance restrictions that prohibit such rental, regulates the duration or frequency of, or unreasonably restricts this rental.
• "Residential Dwelling" is defined as any building or structure or part thereof that is primarily used and occupied for human habitation or is intended to be so used.
• A residential dwelling exclusively rented for seven consecutive days or longer would not be subject to lodging regulations required for all properties licensed under the jurisdiction of the DHS (i.e; hotel, bed & breakfast, tourist rooming house)
• Language was added this time that nothing in the statute can limit the authority of a city/town/village/county to enact an ordinance in any of the following areas: inspections, inspection fees, annual license fees, imposed room taxes, and nuisances related to residential dwellings.
  

STATUS: We anticipate that this bill will be introduced as soon as tomorrow, and we just learned that when the bill number is established, this bill will be added to the schedule of a Public Hearing of the Assembly Committee on Housing and Real Estate slated for 10:00 am in room 400 Northeast of the state Capitol. There are currently three other bills scheduled for this hearing, so the duration of the hearing and the sequence of which bills will be heard in what order is unknown at this time. There is also a chance that the Committee may vote on the bill immediately after the hearing - a sign that they have strong Committee support lined up already.

WHAT CAN YOU DO? 1) Contact your State Senator and State Representative to ask them to not support this bill (now called LRB-3993/1) as it stands, explaining the impact to your property and your community. 2) WH&LA will send out another Insider once we have the bill number. Be ready to send an email to the Committee members that we provide in the same Insider.