UPDATE ON TAIL PIPE TEST EQUIPMENT MAINTENANCE ISSUES
SUNOCO INCREASING INSURANCE REQUIREMENTS
$15/HOUR MINIMUM WAGE BEING VOTED ON IN TRENTON
NJGCA ADVOCATES FOR SAFETY INSPECTIONS ON UBER VEHICLES
NEW FEDERAL OVERTIME RULES FROM OBAMA ADMINISTRATION
PLASTIC BAG TAX AND MAGNUSON-MOSS WARRANTY ACT

              
All this week I have been trying to get accurate information and clarify the procedure of cancelling the maintenance on your tail pipe test equipment.  Part of my job is to determine all potential positives and negatives of cancelling the maintenance contract, iso that you can make the correct business decision. Members have continued to report to me that, despite what I was originally told by SGS, cancelling the maintenance on your equipment does, in fact, lead to the equipment being rendered inoperable. This is NOT what SGS had intended, and it appears that this is due to the fact that the operation of the equipment is tied together in the software of the entire package.  This was totally unanticipated by MVC, Parsons/SGS, and even me, and as recently as this morning I was assured by SGS that they intend to accommodate us, and allow the maintenance contract to be cancelled without completely shutting you out of the equipment. As more information becomes available to me, I will certainly keep you informed.  
 
Here's where we stand right now. You can still call and cancel the maintenance on your tailpipe test equipment as of June 1st, and save $105/month.  However, contrary to what was originally represented to me, you may not be able to conduct any re-inspections which many arrive at your shop (of which I expect there will be very, very, very few).  This morning, I sent a formal request that this be straightened out, and I am still waiting to hear.  Regardless, the tailpipe test equipment will be turned off on August 1, so cancelling the maintenance on it now will save you $210.  Whether you ultimately can or can't use the equipment, it is my recommendation that you save $210 and cancel your maintenance.  Keeping the machine operational on the off-chance that you will have a need for it, simply is not a profitable business decision.  I'll notify you as I learn new details.
 
For Sunoco lessee dealers, it has been brought to my attention that Sunoco seems to be arbitrarily raising the amounts of insurance coverage that you are required to have on the building you occupy, in case of fire or natural disaster.  I need to hear from any of you who are experiencing this, as I may need to convene a meeting of all Sunoco lessee dealers to determine how we will deal with this issue.  One member has reported that the cost of his insurance increased by $1,400 per year.  I need to hear from you!
 
Now, for our busy week in Trenton... As all small business owners know, it is impossible to be in two places at once. Last Thursday, Eric and I were going between two 10AM Committee hearings: the Assembly Transportation Committee hearing on Uber, and the Assembly Labor Committee hearing on $15/hour minimum wage.  The object was for me to testify at both hearings, and Eric was keeping watch in the Transportation Committee room, while I waited at the minimum wage hearing.  He informed me that I was going to be called next to testify on the Uber legislation, so we quickly switched rooms and he headed over to the minimum wage hearing, which had been dragging on for over 2 hours and 40 minutes hours already.  As luck would have it, at 2 hours and 41 minutes, my name got called in the Assembly Labor Committee, while I was right in the middle of giving my remarks at the Assembly Transportation Committee. Thankfully, Eric took my place at the Labor Committee, and gave my testimony.  You can hear Eric's testimony by clicking HERE.
 
I also have to say, "thank you, thank you, thank you!"  I am so impressed with how many of you responded to the alert that I sent, asking you to send a message about the $15/hour minimum wage to your legislators in the General Assembly. The bill passed in the Assembly 42-31-1, with 7 legislators absent.  However, I want to make two points:

But I will repeat again, I was very impressed by your response, and it certainly suggests how devastating a $15/hour minimum wage will be to each of you, should it become law! 
 
Secondly, for those of you paying attention, it's hard NOT to notice Uber's growth as a means of transportation that is displacing taxi cabs and limousines.  You should also be aware that I have been advocating for the past year that the nearly 15,000 Uber vehicles on the road in New Jersey must be required to undergo the same annual safety inspection that both taxi cabs and limousines are required to undergo. NJGCA has many members that conduct these inspections, and I want that business in your shops!  NJGCA also has members operating taxi, limo and transportation companies who use their service bays and parking lots to properly inspect, repair and house these business operations. Uber represents a real economic threat to my members, and a safety threat to the public. I testified at the Assembly Transportation Committee on Thursday, insisting that Uber vehicles must adhere to the same regulations in ALL aspects that are required of limousines and taxicabs.  You can hear my testimony by clicking HERE and you can read an editorial I wrote which was published in the Daily Record last week HERE.
 
Now, for a federal issue: We've mentioned several times over the past year that President Obama was preparing to take things into his own hands with regard to overtime regulations. He did what he promised, unfortunately, and new overtime regulations were formally adopted the other day.  This is strictly an Executive Action being taken by Obama, and never went thru normal legislative or regulatory channels. Obama is to blame and no one else!  Here's what you need to know:  A memo I received from our friends at SSDA helped us to sum it up as there were strong objections from NJGCA, SSDA and many other small business groups.
 
On May 18, 2016, the Department of Labor (DOL) released the long anticipated final rules defining Overtime Exemption requirements, including guaranteed salary requirements.
 
The key provisions of the final rule are as follows:

1. The new rule goes into effect December 1, 2016.

2. The new guaranteed salary requirement is a minimum of $913.00 per week ($47,476.00 annually). This salary requirement applies to the Executive, Administrative and Professional Exemptions, including salaried managers and assistant managers.

3. For the Highly Compensated Exemption, the new salary requirement is $134,004.00.

4. The final regulation establishes a mechanism to update the salary requirement level every three (3) years.

Of noted importance, and as it relates to the Executive, Administrative and Professional Exemptions (Highly Compensated excluded), is the ability for the employer to apply Non-Discretionary Bonuses and Incentive Payments (including a valid commission payment) to satisfy up to 10% of the guaranteed salary level requirement of $47,476. Non-Discretionary Bonuses and Incentive Payments, such as commissions, must be well defined and meet the DOL's requirements under the regulation.

The DOL did not change any of the White Collar Exemption duties tests. Further, the DOL permits the compliant use of the Fluctuating Workweek Method of Payment which is a pay plan that may be recommended for select positions/cases.

 What Employers Should Do NOW!

1. Assess your organization's current liability by conducting a thorough review of salaried positions. Discuss and confirm appropriate application of the White Collar Exemptions based on the duties test alone. (Your employees are most likely all blue collar.

2. Assess the hours of work performed by those salaried positions of which their current salary is less than the new guaranteed salary requirement. Determine if the position(s) can be limited to 40 hours of work or less per work week.

3. If necessary, and based on if hours worked exceed 40 in a work week (overtime), consider altering the position's compensation structure to ensure compliance:

   • Increase the guaranteed salary to the new required threshold of $47,476.00.00 ($913.00 per week). It is important to note that simply increasing the salary may not make the position exempt from overtime. The position must also meet the duties tests as outlined in the White Collar Exemptions.

   • Change the salary to an hourly rate of pay with overtime (1˝ times the regular rate of pay) for any hours that exceed 40 in a work week.

   • Implement the Fluctuating Workweek Method of payment. This method of payment provides a guaranteed salary per week with a straight time earnings calculation providing half (1/2) time for hours that exceed 40 in a work week.

   • Revise the current pay plan implementing a Non-Discretionary or Incentive element applying up to 10% to the salary threshold.

For Retail Organizations, implement the partial Retail 7i exemption from overtime. This partial exemption requires that the employee earn at least half (51%) or more of the total compensation from a Non-Discretionary Bonus or Incentive pay plan. Further, the position must yield an hourly rate of pay of least one and one half (1˝) time minimum wage (or $10.88/hour) for all hours worked. This partial exemption does not remove the requirement for an employee to maintain a true and accurate time card for all hours worked.
 
Finally, there are two additional small topics that I need to re-visit briefly:
 
1. We were also in Trenton on Thursday to oppose the plastic bag tax that was up for discussion. We submitted written testimony in opposition to the legislation, and although the bill passed this committee, it still has a long way to go.  There is also the possibility that this bill and some other recycling initiatives currently floating around in Trenton might eventually be incorporated into a larger compromise bill reached by the business coalition and the pro-environment community. I will keep you updated with information as it comes in as NJGCA is deeply involved in the negotiations.
 
2. A reminder about the request that I made to members last week regarding the Magnuson-Moss Warranty Act.  I asked you to please let me know if you have had any experience with customers indicating to you that they have not brought their car in for repairs to your shop because they did not want to void their warranty.  This is obviously against the law, and the bill we're working on would raise consumer awareness about their rights and provide clarity and peace of mind that patronizing an independent repair shop would not void a customer's warranty.  Please let us know if customers have voiced these concerns to you so that we can prove to the industry that this is a problem!     
 
Thanks for reading -- See you all next week!

Sal Risalvato
Executive Director

05/26/2016:
Lawmaker: N.J. roads can be fixed without gas tax hike
State Sen. Jennifer Beck announced she is introducing two sweeping bills to free up billions of dollars in the state budget to fund the near-broke TTF for seven years without raising the gas tax.  The two bills, which would overhaul transportation administration in the State and reform public worker health care, are the centerpieces of Beck's plan to bring in money for road, bridge and rail projects.  The TTF will run out of money for new projects this summer.  All existing revenue is already dedicated to paying off debt.  Democrats are expected to seek an increase in the gas tax, though they haven't released a formal proposal. But when Democrats say an increase at the pump is unavoidable, Beck, a Republican, started to put together a plan late last year to prove the trust fund can be replenished without a tax increase. "We're sitting here right before Memorial Day weekend, and I've heard rumblings and conversations about these huge gas tax increases -- 20 cents, 40 cents -- I haven't seen any plans," Beck (R-Monmouth) said at a Statehouse news conference, where she was joined by the conservative Americans for Prosperity. "By the way, even at 20 cents a gallon increase, which is insane ... you're still short. It's not enough." Beck's seven-year, $11.2 billion funding plan relies on $6.8 billion in cash and $4.4 billion in borrowing. It shifts from mostly borrowing in the first years to mostly cash by 2018.
 
05/26/2016:
Name your poison for fixing the roads: a gas tax hike or a property tax hike
Twice last weekend I had to make the dreaded drive from Brick Township to Toms River. The reason it's dreaded is that there's a chokepoint on the primary north-south route between the two townships, Hooper Avenue. Drivers coming from all directions have to squeeze into four lanes, creating perennial gridlock.  The solution is obvious: Widen the road to six lanes. But who will pay for that?  There are two options. Raise the gas tax. Or raise the property tax.  Our Republican governor has spent seven years dodging that decision. A Republican state senator from Sussex County is facing it. Sen. Steve Oroho is a financial planner in his day job.  When I ran into him the other day in the Statehouse he handed me a financial analysis of the TTF, which funds roads as well as mass transit. His numbers show the fund is in the same condition as a family that owes more in credit-card bills every month than it makes in income. "You sit in traffic in northern part of the state and it's like, 'How do people deal with this every day?'"  The gas tax brings in about $750 million a year.  But the debt exceeds a billion a year - right up through 2041.
 
05/24/2016:
Kicking the habit: Adult smoking rate in US is falling fast
The nation seems to be kicking its smoking habit faster than ever before.  The rate of smoking among adults in the U.S. fell to 15% last year thanks to the biggest one-year decline in more than 20 years, according to a new government report. The rate fell 2 percentage points from 2014, when about 17% of adults in a large national survey said they had recently smoked. The smoking rate has been falling for decades, but it usually drops only 1 point or less in a year. The last time there was a drop nearly as big was from 1992 to 1993, when the smoking rate fell 1.5 percentage points, according to Brian King of the Centers for Disease Control and Prevention. The CDC reported the new statistic Tuesday. It's based on a large national survey that is the government's primary measuring stick for many health-related trends. Smoking is the nation's leading cause of preventable illness, causing more than 480,000 deaths each year in the United States, the CDC estimates. Why the smoking rate fell so much in 2015 -- and whether it will fall as fast again -- is not quite clear.  About 50 years ago, roughly 42% of U.S. adults smoked.  It was common nearly everywhere -- in office buildings, restaurants, airplanes and even hospitals. The smoking rate's gradual decline has coincided with an increased public understanding that smoking is a cause of cancer, heart disease and other lethal health problems. Experts attribute recent declines decline to the mounting impact of anti-smoking advertising campaigns, cigarette taxes and smoking bans.
 
05/22/2016:
Ban on flavors would leave some vapers bitter
The thick vapor clouds that wafted over the steps of the State House last week were just a signal of the latest battle over anti-smoking legislation that smoldered inside. The clouds were generated by a group of several dozen vaping enthusiasts who were making the claim that their habit had enabled them to quit smoking tobacco cigarettes while still getting a nicotine hit. Inside the hearing room, however, members of the Senate health committee -- at the urging of public heath advocates who say vaping endangers children -- advanced a bill that would ban the sale of flavored e-cigarettes except for tobacco and menthol flavors.  Other flavors -- such as apple pie and peach, carrying names like “Nimbus” and “Jerry’s Berries” -- have become the flash point in the debate over the fast-growing vaping business in New Jersey. In 2009, New Jersey became the first state in the nation to ban the sale of flavored tobacco cigarettes with the exception of clove and menthol.  Sen. Joseph Vitale, D-Middlesex, chairman of the health committee, said his bill to ban vaping flavors was a logical extension of that earlier legislation.  Vitale said the bill was also prompted by new data from the federal CDC that show the number of young people smoking tobacco cigarettes has declined while the number of young people who are vaping has soared.