NRF in Washington: Advocacy update October 2023

Congress narrowly avoided a government shutdown by passing a continuing resolution that will keep the government funded through mid-November. While Congress works toward a long-term funding solution and electing a new Speaker of the House, NRF remains committed to advocating for the retail industry’s interests. Even with a divisive Congress, there remain opportunities to advance key policy priorities.

Combating Organized Retail Crime Act

According to NRF’s recent National Retail Security Survey, retail crime accounted for over $112 billion in industry losses in 2022, up from $93.9 billion in 2021. Retailers are reporting not only an increase in theft and organized retail crime activity, but violence as well. In response, they are reallocating resources to address the risks: Of the surveyed retailers, 34% have increased internal payroll to support their risks, while 46% have increased the use of third-party security personnel. Over half (53%) have increased their technology and software solution budgets in the past year.

With violence one of the most concerning risks, 54% have increased or are increasing employee workplace violence training. More drastic actions include closing a specific store location (28%), reducing operating hours (45%) or reducing or altering in-store product selections (30%).

The impact of ORC on retailers and their employees and customers is why NRF strongly supports the Combating Organized Retail Crime Act of 2023 (H.R. 895/S. 140). The bipartisan legislation would increase coordination and the sharing of information and resources between law enforcement agencies at all levels to bring criminal gangs to justice. Congress must act to curb rising organized retail crime, which threatens retailers and the communities they serve.

Credit Card Competition Act

Credit card swipe fees, most retailers’ second-highest operating cost after labor, continue to rise. In fact, the credit card duopoly of Visa and Mastercard is raising and implementing new fees this month, resulting in an additional cost of $502 million annually for merchants.

Lack of competition in the credit card routing market drives these excessive fees — Visa and Mastercard control 80% due to their anti-competitive partnerships with the nation’s largest credit card issuers. The networks’ market control forces every American business that accepts credit cards as payment to pay unnecessarily high swipe fees without any recourse and limited transparency.

After years of failed attempts to bring the networks to the negotiating table and stalled court cases, there is finally a solution in Congress — the Credit Card Competition Act (H.R. 3881/S. 1838).

The bipartisan legislation would inject competition into the credit card routing market by simply requiring the largest financial institutions to enable a second network to route transactions on the credit cards they issue. Contrary to false claims made by the bill’s opponents, the legislation would not end credit card rewards, would not solely benefit big box retailers and would be a win for consumers.

Retailers and other American businesses are being crushed by high swipe fees. It’s time for Congress to step in and correct this broken and anti-competitive market.

Labor and workforce issues

The Biden administration celebrated Labor Day by issuing a host of new employment regulations. First, the Wage & Hour Division of the Labor Department released a Notice of Proposed Rulemaking altering overtime pay regulations under the Fair Labor Standards Act. The proposal would increase the threshold at which workers cannot be exempted from the FLSA from $36,500 to $55,068.

NRF will oppose this rule, as it will hinder retailers’ ability to proffer the most tailored, flexible compensation plans for salaried employees. NRF recently led 107 trade associations on a letter asking for additional time to comment on the proposal.

Secondly, the Occupational Safety and Health Administration issued its notice of proposed rulemaking regarding the “Worker Walkaround Representative Designation Process.” The proposal allows employees to authorize third parties, including labor union organizers and/or community organizers, to accompany an OSHA Compliance Safety and Health Officer during a facility inspection when they are “reasonably necessary” to aid in the inspection.

NRF will file extensive comments in opposition to this rule, as it violates our members’ right to control their own private properties.

Lastly, the Labor Department sent its Final Rule on Independent Contractor status to the Office of Information and Regulatory Affairs at the White House for final review. NRF opposes changes to this important area of employment law, as the current rules regarding independent contractor status clearly define the difference between employees and independent contractors. The rule should be issued within the next few weeks. NRF will consider our legal options upon the release of the final rule.

Immigration reform

The current situation at the U.S. southern border has thrust border security and broader immigration into the spotlight. NRF has long supported meaningful and comprehensive immigration reform that produces a modernized immigration system that meets the needs of the American economy. Retailers, which rely on eligible and legal workers, continue to face workforce shortages and need Congress to find middle ground and overhaul our dysfunctional immigration system to foster legal immigration pathways to the country.

While border security is an important part of the conversation, NRF continues to advocate for common-sense solutions to improve visa programs, streamline the employer verification system and provide certainty to DACA recipients.

The retail industry, and the American economy as a whole, rely on a diverse set of workers of all skill levels. While the politics surrounding immigration reform are challenging, NRF maintains that congressional action to improve the immigration system is much needed and long overdue.