February 2021

Prepared and Distributed by The Midwest Hardware Association, Inc.

MHA Membership Renewals Hello MHA Members!   We would like to thank each and every member for your continued support of MHA, especially this past year with all of the craziness going on. Your Membership is very much appreciated and important to us!   With that being said, here is a quick reminder that it’s time to renew your MHA Membership for 2021! The original deadline was January 1st, but it has been extended to March 1st! Reminders went out in the mail last week, so be sure to check for those.   Thank you again and we look forward to serving you for the rest of 2021!

Electronic Invoicing and Automated Payments Available

Would you like your MHA monthly invoices and statements emailed to you? Simply provide your store name(s), account number(s) and email address(es) to:  [email protected] We also offer automated monthly credit card and ACH payments. Avoid potential finance charges and save time and money on checks, envelopes and postage! Just return the appropriate form (attach CC and ACH authorization form here) to [email protected] or fax to 715-342-9619. Click Here for CC and ACH Authorization Form

The True Cost of Not Providing Employee Training By shiftelearning.com When a lightbulb burns out, we don’t throw out the lamp, right? If you do, then you are either incredibly rich or possibly have a weird thing for new lamps, I guess. But, if you’re like the majority of the lamp-owning world then you likely just replace the bulb, which allows you to save money and enjoy a brighter room too. Unfortunately, when it comes to “fixing” an existing employee, over hiring a new one, managers often throw out the lamp, so to speak. While companies have a pretty clear idea of what it costs to train an employee, they ignore the real question:  what is the cost of not training an employee? Read More

Sales Trends December 2020

Here are the most recent Illinois, Minnesota-Dakotas, and Wisconsin hardware store sales trends, gathered from association members using the MHA's monthly accounting services. The figures derived for each region include sales data from the following number of stores: Illinois - 22 stores Minn.-Dakotas - 13 stores Wisconsin - 79 stores

Minnesota Pharmacies Prepare for COVID-19 Vaccine Rollout

Pharmacies are now the latest place where Minnesota residents can get a COVID-19 vaccine. National drug store chains, including Walmart, CVS Pharmacy, and Walgreens, are just some of the major retailers getting the supplies as a part of the Federal Retail Pharmacy Program. It’s the latest effort from both the federal and state government to get the vaccine out to more Americans. “As of Tuesday night, we scheduled all 8,000 of our appointments for the next couple of days here,” said Jeremy Faulks, the director of specialty pharmacy at Thrifty White Pharmacy. Walmart and Thrifty White will receive more than 16,000 doses across the state of Minnesota. “This is great news for us. As a pharmacy, we’ve been doing vaccinations for a long time so being a part of this and being to expand that access is a really big deal for us,” said Faulks. “We tend to be located in the rural parts of the state in towns where there are between a few thousand up to 80,000 people. For many towns, we are the only health access point for that town.” Local pharmacies are also joining in to help. “This is two-fold. We have a pilot program with 19 pharmacies at the independent level administering vaccines at their local communities,” said Sarah Derr, the executive director for the Minnesota Pharmacists Association. “Then there’s the federal program that you see at large retailers such as Walgreens, Walmart, and Thrifty White. These are two separate programs.” Derr adds the best place to check for available appointments is online, which is what Walmart suggests as well. “If you want to get on to a waiting list, go on to the pharmacy’s website and see, first, if they offer COVID-19 on their website,” said Derr. “If so, then the pharmacy will typically have a COVID-19 appointment system available.” Governor Walz is reallocating 8,000 doses to Walgreens to vaccinate adults 65 and older across the state. His administration has not detailed when they will start.

Illinois' Lame Duck Session Produces Equity-Minded Legislation that Impacts Illinois Retailers By Alec Laird, MHA Illinois Lobbyist and Vice President, Government Relations for the Illinois Retail Merchants Association Illinois held its lame duck session in early January. During the session, the Illinois Legislative Black Caucus (ILBC) introduced a package of bills that represented the four pillars of their platform to address racial inequality including: Criminal justice reform, violence reduction and police accountability; Education and workforce development; Economic access, equity and opportunity; and Health care and human services. The third pillar included language that impacted Illinois employers including, retailers. The ILBC initially filed an omnibus bill on Economic Access, Equity and Opportunity bill that included, employee criminal history provisions, procurement provisions, cannabis equity commission, disparity studies, lead in water service lines, environmental justice permits, equal pay certificate, etc. In order to make it easier to pass and to divide the opposition to the subject matter of the omnibus bill, the bill was divided among four separate bills. While the ILBC’s whole agenda did not pass during lame duck, the criminal history provisions and the equal pay provisions did pass during lame duck in SB 1480. Employee Criminal History SB 1480 Floor Amendment 2 makes it a Human Rights Violation for an employer to use a person’s criminal history to deny someone a job, promotion, or any other employment benefits or take any other adverse action unless there is a (1) “substantial relationship” between the conviction and the job; or (2) the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public. If an employer uses, in or whole or in part, an individual’s criminal history, the employer must proceed through the following steps: Mitigating Factors. The employer shall consider the following factors: (1) the length of time since the conviction; (2) the number of convictions that appear on the conviction record; (3) the nature and severity of the conviction and its relationship to the safety and security of others; (4) the facts or circumstances surrounding the conviction; (5) the age of the employee at the time of the conviction; and (6) evidence of rehabilitation efforts. Preliminary Decision and Employee Notification. The employer shall contain a (1) notice of the disqualifying conviction; (2) copy of the conviction report; and (3) an explanation of the employee’s right to respond to the notice of the employer’s preliminary decision before the decision becomes final. Response Period. The employer shall give the employee 5 business days to respond to the notification. Final Decision. If an employer makes a final decision to disqualify or take an adverse action solely or in part because of the employee’s conviction record, the employer shall notify the employee in writing of the following: (1) notice of the disqualifying conviction or convictions that are the basis for the final decision and the employer’s reasoning for the disqualification; (2) any existing procedure the employer has for the employee to challenge the decision or request reconsideration; and (3) the right to file a charge with the Department. Equal Pay Certificate SB 1480 Floor Amendment 2 and 3 also requires a business with 100 or more employees to obtain an equal pay certification. In order to obtain equal pay certificate an employer must provide the Director of the Illinois Human Rights Commission the following information: A copy of the business’s most recently filed Employer Information Report EEO-1--if currently required. A list of all employees during the past calendar year, separated by gender and the race and ethnicity categories as reported in the business’s most recently filed Employer Information Report EEO-1 A report the total wages paid to each employee during the past calendar year, rounded to the nearest hundred dollar. That the business is in compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act, and the Equal Pay Act of 2003; That the average compensation for its female and minority employees is not consistently below the average compensation, as determined by rule by the Department of Labor, for its male and non-minority employees within each of the major job categories. That the business does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex; That wage and benefit disparities are corrected when identified to ensure compliance with the Acts cited in #1. How often wages and benefits are evaluated to ensure compliance with the Acts cited in #1. The equal pay compliance statement shall also indicate whether the business, in setting compensation and benefits, utilizes: A market pricing approach; State prevailing wage or union contract requirements; A performance pay system; An internal analysis; or An alternative approach to determine what level of wages and benefits to pay its employees. If the business uses an alternative approach, the business must provide a description of its approach. The aforementioned information is required for each county the business is located. A business must obtain an equal pay registration certificate within 3 or the effective date of this Act or within years of commencing business operations and must recertify every 2 years thereafter. Penalties A business is liable for a penalty of 1% of the business’ gross profits if it violates the Act. A business with a state contract may have its contract revoked if it does not obtain a certification or the certification is revoked. The bill passed the House with a vote of 70-43-5 and the Senate on a concurrence vote of 31-15.

WISCONSIN PPP Loan Recipients Could Face Unexpected Taxes Unless Governor Signs Legislations By Misha Lee, MHA Wisconsin Lobbyist Businesses in Wisconsin that received forgivable loans under the federal Paycheck Protection Program (PPP) since the start of the COVID-19 pandemic could face hundreds of millions of dollars in state income tax liability on those loans unless Governor Tony Evers (D) signs legislation (Senate Bill 2) to exempt these loans from state taxes. To the surprise of loan recipients, the DOR issued guidance to tax filers indicating that forgivable PPP loans will be taxable under Wisconsin law even though the loans are not subject to federal taxes. The Paycheck Protection Program was part of the $2.2 trillion CARES Act passed by Congress in March 2020 to help keep small businesses open during the pandemic. Any PPP loan proceeds used for qualifying costs i.e. payroll, health insurance for paid sick, medical, or family leave, mortgage interest payments, rent and utility payments, and 60% of the loan proceeds are used for payroll costs, the federal government will forgive the loan. While a loan does not generate taxable income, a forgiven loan generally does. Congress took steps to address this issue by clarifying that forgiven PPP loans under the CARES Act are not included in taxable income for federal tax purposes. However, some states like Wisconsin still consider a forgivable PPP loan as taxable income, that is unless Governor Evers signs legislation recently approved by the Republican controlled legislature that conforms the state tax code to the IRS code when it comes to federal Paycheck Protection Program loans. According to the nation’s leading independent tax policy nonprofit, The Tax Foundation, under the DOR’s current interpretation, first-round PPP loans from 2020 will not be treated as taxable income, but expenses paid for using those loans will be ineligible for the customary expense deduction. The result is that businesses who took out PPP loans will have a higher level of state taxable income than if they had not tapped into the program. To confuse the situation, the Tax Foundation explains that second-round PPP loans from 2021 may also be taxed by the state, but in a opposite manner - expenses will be deductible, but the loans are treated as taxable income right now in Wisconsin. MHA has joined with a broad group of statewide business organizations that have called on Governor Evers to quickly sign into law legislation that was sent to him to address this issue. Businesses throughout Wisconsin who received PPP loans and related federal assistance should not have to face millions of dollars in new state taxes, especially now in the midst of a global pandemic. For most businesses, it’s fair to say that these loans were never anticipated to be taxable either at the federal or state level. The DOR’s interpretation comes at a time when the state is realizing a significant general fund revenue surplus. The nonpartisan Legislative Fiscal Bureau (LFB) recently estimated a net fund balance in Wisconsin for 2020-21 of nearly $1.77 billion. Because of the healthy financial condition of our state’s general fund balance, the Evers Administration should align the state’s tax code with the federal IRC. Wisconsin should not force more taxes on already struggling small businesses. The businesses who used these loans, some of whom are MHA members, likely saved the state money on government programs and helped stimulate the economy by keeping people employed during the pandemic. Hardware stores throughout the state were deemed essential businesses at the outset of the pandemic and helped keep many people employed during an incredibly challenging economic environment.  The encouraging news is that Wisconsin state lawmakers overwhelmingly approved legislation this week on a bipartisan vote in both the Assembly and Senate to make sure businesses are not hit with these surprise taxes on their PPP loans. It’s now up to Governor Evers to take swift action and sign the bill into law. UPDATE MADISON — Gov. Tony Evers today signed Assembly Bill (AB) 2, providing approximately $450 million in tax relief to Wisconsin businesses and $30 million more in tax relief to low-income families by adopting federal changes to align state tax law. A video of the governor signing AB 2 into law is available on his Facebook here. “This past year has been challenging and unrelenting for so many, but since the beginning of this pandemic, we've been committed to providing economic relief to the folks who've been affected by the pandemic,” said Gov. Evers. “We know business and families across Wisconsin need help now, so I’m proud to be able to deliver $480 million in tax relief for folks across our state.” AB 2, now 2021 Wisconsin Act 1, is available here. In addition to signing AB 2, the governor signed AB 3, now 2021 Wisconsin Act 2, available here.

Background Screening Affordable background screening made easy. Justifacts has been providing accurate, high-quality background screening services for over 35 years and offers MHA Members a variety of employment screening services such as: criminal background checks motor vehicle record checks drug testing employment verification and more Setup for MHA Members is easy. Regardless of how many or few screenings you need, regardless of the duration between each screening, you pay the initial setup fee ONCE. There are no contracts, no recurring fees! Once you are setup with Justifacts, you’re only charged when you use the service. With over 100 different screening options, you have the ability to control your screening costs by choosing only those screenings most beneficial for your circumstance. Need help in choosing what to screen for? With Justifacts, MHA members always have access to a professional representative who can help you decide what screenings are right for you. Testimonial  “I recently used your background checking service JUSTIFACTS. I came away impressed with the personal advice and explanation of the process. The number of checks that it makes in doing just a criminal background check is very complete. Now that I am set up in the service, I will make use of it more frequently!” Thomas Dorn Dorn True Value Hardware & Rental Madison, WI For more information about background screening services available to MHA Members or to get set up with Justifacts, contact Andrea by phone (800-888-1817 ext. 365) or by email ([email protected]).