October 2020
Prepared and Distributed by The Midwest Hardware Association, Inc.
Wisconsin Limits Store Capacity - Has It Affected Your Store?

From the time it was issued on October 6, 2020, Wisconsin’s Emergency Order #3 has brought about a great deal of confusion for everyone, including retailers.

First, there has been the legal back-and-forth. The order was issued on October 6 with a “goes into effect” date of October 8. On October 13, a judge temporarily blocked the order. On October 19, a different court reinstated the order. More legal challenges (primarily from bars and restaurants) may be coming.

The order limits the number of people who may occupy a public indoor space to 25% of normal capacity as determined by the local municipality. The order also specifically includes “stores” as a public indoor space. The order also states that public indoor spaces without a capacity limit may only allow 10 people inside.

Each local municipality seems to have their own means and devices for determining indoor capacity. Some will provide it. Others say they are unable to provide it. Still others may say the capacity varies based upon the code you are looking at.

For most MHA members in Wisconsin, it appears the capacity limit mandate set down in Emergency Order #3 has not caused them to substantially alter their operations. We don’t know of any stores that have been cited, or even warned, for violating the capacity rules now in effect. There is enough confusion, and enough variation at the local level on just how to determine capacity limits, that most hardware stores seem unaffected at this time.

If your store has been affected by the Wisconsin capacity limit mandate, or if you had an interesting experience in trying to comply, we’d love to hear your story. Please contact MHA Managing Director John Haka by email (johnh@midwesthardware.com) or phone (715-341-7100 ext. 303).

As it stands currently, the 25% capacity limit mandate on indoor public spaces is set to expire November 6, 2020.
Wisconsin Businesses Now Must Provide UI Information to Separated Employees
From Boardman & Clark Law Firm
The Wisconsin Department of Workforce Development (DWD), the state agency responsible for administering the state’s unemployment insurance program, recently announced a new notification requirement that affects all Wisconsin employers with one or more employees.

Effective November 2, 2020, all employers must individually notify workers about the potential availability of unemployment insurance at the time a “separation from employment” occurs. An employment separation occurs whenever an employment relationship ends or is reduced, including terminations, furloughs with the possibility of recall, or a reduction in hours that results in wage loss. This notice must be provided even if the employee was terminated for misconduct, substantial fault, or if they voluntarily quit. Employers must provide this notice when the employment separation occurs or, if immediate notice is not feasible, as soon as possible.

Providing this notice, however, does not necessarily mean employees will qualify for unemployment insurance benefits. The notice is simply intended to tell employees that unemployment insurance benefits may be available and how to apply. Even if the employer believes the employee will not be eligible for unemployment benefits, the employer should still provide the notice whenever an employment separation occurs and worry about eligibility issues later. If an employee does not receive this required notice from their employer, there are no specific penalties, but the employee might receive additional time from the DWD to file an initial unemployment benefit claim.

The DWD has provided suggested notice language that employers should use when an employment separation occurs. That sample language can be found here. At the time of an employment separation, employers can provide the required notice to employees by email, text message, letter, or by providing a copy of the DWD’s printed poster in person or via mail. Employers should keep a copy of this communication for their records.

Wisconsin employers are already required to display this DWD poster in the employer’s physical workplace in a suitable location (near bulletin boards, breakrooms, time clocks, etc.) where all employees are likely to see it. For remote workers who are not physically present at a job-site or office, the employer should place the poster on the company’s internal intranet, website, or other readily accessible virtual space.

More information from the DWD regarding this notice and Wisconsin’s unemployment insurance program can be found here.
Minnesota Legislature Passes Welcomed Section 179 Conformity
Last week, the Minnesota State Legislature passed a bonding bill, which now heads to Governor Tim Walz’s desk for his signature. The bonding bill is a $1.36 billion package, that also contains tax and supplemental spending provisions.

Of note, the bill contains language supported by MHA regarding Section 179-full expensing and conformity with federal tax laws.

Tax laws generally require businesses to spread deductions for capital expenditures (i.e. computers, fixtures, store equipment, etc.) over the useful lives of the purchased property. Under federal tax rules, businesses may elect to use Section 179 expensing to deduct the entire cost of the purchased property in the year it is placed in service (subject to certain limits), rather than having to recognize depreciation expense on the property over what is generally a 3 to 15-year time period.

Since 2006, Minnesota law has not conformed with federal law in terms of immediate expensing of capital expenditures. Businesses were limited in how much Section 179 expense (i.e. an immediate deduction) they could claim on their Minnesota income tax return in the year they placed the property in service.

If signed into law, the bonding bill would change that by allowing immediate expensing of qualifying capital expenditures at the same levels currently allowed under federal tax rules.

Update
Governor Walz signed the bill into law on Wednesday, October 21.
Well Since You Have to Wear One
From: Retail Dive

Whether it’s disposable, fabric or printed with your favorite sports team’s logo, over the past several months you’ve probably collected your fair share of face masks. They’ve become just as essential as grabbing your phone and wallet when heading out of the house.

Now Minnesota-based Hormel Foods has come up with their solution to make your already-steamy mask experience all the better. Add bacon scent.

Earlier this week, the brand launched the Hormel Black Label Breathable Bacon, a face mask scented with bacon.
“We’re continually focused on innovation—from new products, to marketing and distribution—all in an effort to deliver new and exciting ways to experience and enjoy BLACK LABEL® Bacon,” Nick Schweitzer, senior brand manager for Hormel Black Label Bacon, said in a statement. “In 2020, that means connecting everyone’s favorite bacon scent to the year’s ‘it’ accessory and in doing so, bring BLACK LABEL® Bacon closer to our fans.”

Those interested can enter for a chance to win the truly unique product on www.BreathableBacon.com. But the best part? Hormel said it will donate one meal to Feeding America for every request they receive, up to 10,000 meals.

While nobody needed a meat-scented piece of fabric covering their nose and mouth at least it’s helping a good cause.
Sales Trends August 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 - 25 stores
Minn.-Dakotas - 12 stores
Wisconsin - 75 stores
Lawsuit Filed to Stop Publication of Businesses with COVID Cases
By Misha Lee, MHA Wisconsin Lobbyist

A lawsuit filed earlier this month seeks to prevent Governor Tony Evers and his administration from publishing a list of Wisconsin businesses that have had two or more confirmed cases of COVID-19 among their employees since June. The administration cited legal compliance with open-records requests from the media as their basis for needing to release the information. It’s relevant to point out that Governor Evers had originally stated earlier in the summer that it was his position that the information was not public and keeping it private helps public officials better manage outbreaks of COVID-19.

Wisconsin Manufacturers and Commerce (WMC), along with several other local area chambers of commerce, immediately brought a lawsuit seeking an injunction by the court when it was learned that Governor Evers’ Department of Health Services (DHS) had reversed course and was preparing to release a list of affected businesses. Subsequently, a Waukesha County circuit court judge issued a temporary restraining order stopping the release of the information. The judge’s temporary order will remain in place through the month of November while litigants in the case prepare and make their arguments to the court.

Read the lawsuit here. The legal challenge, in part, argues:

  • The records that the state plans to disclose are protected by patient-confidentiality laws.
  • Even if the information that the defendants plan to release were not explicitly protected by health-privacy laws, the open-records statute would not authorize disclosure of this information.
  • Disclosure would cause the members represented by the plaintiff irreparable harm.

If allowed to be published, the DHS list would include:

  1. Only businesses with 25 or more employees.
  2. The business name and the number of known or suspected COVID-19 cases among employees of the business.
  3. Information only from “closed investigations”, which are defined as businesses that had 2 or more confirmed cases within 28 days of each other, but have not had any subsequent cases within 28 days.
  4. Names of businesses that may have had no employees test positive, but still appear on the list due to being named in the context of contact tracing.

MHA strongly objects to the publication of this list and has urged the administration to reconsider its position. As stated in an email to the MHA membership, “The action taken by the administration does nothing to protect the health of the general public. Further, it undermines the amount of time, effort and expense that Wisconsin’s essential small retail businesses have invested in protecting their employees and their customers during this extremely challenging pandemic.”

The reputational and financial damage this action could cause thousands of business owners, particularly those businesses struggling due to the negative impacts from the pandemic, could be crippling. Identifying the names of businesses that had employees or customers who tested positive for COVID-19 gives the false impression that the employees or customers got the virus at their place of work or at a particular business location - when that is extremely difficult to determine. The release of business names and information could also expose small retail businesses to greater liability for lawsuits. The state Legislature has not acted on legislation that would provide protections for employers from frivolous COVID-19 related lawsuits.

Since the court’s injunction, the Department of Health Services (DHS) has not been able to provide any additional information regarding the list of businesses due to the pending litigation on the matter.
A Look Forward in Illinois
By Alec Laird, MHA Illinois Lobbyist and Vice President, Government Relations for Illinois Retail Merchants Association

In this eHelps edition, we will take a quick look at the 2020 Illinois General Elections and what Illinois lawmakers may have in store for the 2020 Veto Session, the 2021 Lame Duck Session, and the 2021 Spring Session.

Illinois 2020 General Elections
The 2020 General Elections in Illinois are shaping up to be a disaster for suburban Republicans. Currently the House Democrats hold a supermajority with 74 members to the Republicans 44 members and the Senate Democrats hold a supermajority with 40 members to Republicans 19 members. Both the House Democrats and Senate Democrats are expected to increase their supermajorities.

According to recent polls Joe Biden leads Donald Trump by 25-30 points in Illinois. The greatest disparity for Trump in Illinois is in the suburbs where he is trailing Biden by nearly 30 points. Additionally, Republicans are being outspent by a margin of nearly 5 to 1. Due to the President’s sinking numbers in Illinois and the disparity in fundraising and spending, there will most likely be a “blue wave” in the Illinois suburbs.

The House Democrats could potentially expand their supermajority to over 80 members. Luckily for Republicans, there are not too many Senate races this cycle and Senate Democrats are only expected to pick up only 1 seat.

2020 Veto Session
The Veto Session will take place November 17-19 and December 1-3. Veto Session is designed for the General Assembly to consider any vetoes issued by the Governor. Historically, veto session has also been used for other issues as well.

Governor Pritzker did not issue any vetoes for consideration. Generally, Veto Session would be shortened or cancelled if there were not any major issues or vetoes to be considered. This year, in wake of the recent civil unrest, the Illinois Black Caucus is demanding that issues regarding social justice and inequality be considered during Veto Session. Over the last few months, the House and the Senate have been holding hearings regarding the Black Caucus’ agenda that includes the following:

  1. Criminal justice reform, violence reduction and police accountability;
  2. Education and workforce development;
  3. Economic access, equity and opportunity; and
  4. Health care and human services.

Specific language has not been released, but retail theft has been a part of the Black Caucus agenda discussions. In particular, there is an initiative to increase the retail felony threshold from $300 to $2,000. MHA strongly opposes this initiative.

2021 Lame Duck Session
A Lame Duck Session occurs every two years after the General Election. It occurs in early January, usually starting sometime around January 3rd and running through the swearing-in of the new General Assembly on the second Wednesday of January. The Lame Duck Session is generally very active because incumbents who have lost their seats are free to vote without any repercussions from their districts. As such, controversial issues that cannot be passed during a normal session are generally considered.

MHA expects this Lame Duck session to be VERY active. Any Illinois Black Caucus agenda item not considered during Veto Session will most likely be considered during Lame Duck. If the progressive income tax ballot measure fails in November, an income tax increase will most likely be considered during Lame Duck as will other budget measures. Additionally, energy reform, ethics reform, and COVID-19 related issues including, but not limited to, unemployment insurance, workers’ compensation, liquor, and paid sick leave are likely be discussed during the Lame Duck Session. While most of the lame ducks will be Republicans, who are unlikely to vote for tax increases or additional mandates on employers, the Democrats could do something with just their votes on the theory that it gives them a full two years to offset any potential negative outcomes.

2021 Spring Session
As discussed above, there is expected to be a “blue wave” in the Illinois suburbs. There is a potential for Democrats to surpass 80 members in the House. This would leave 36 or fewer Republicans. Keep in mind that only 60 votes are required to pass a bill and 71 votes to override any potential veto. As is the case today, no Republican votes will be needed to pass a bill or a veto proof majority bill.

Regardless of the severity of the Republican losses, the first order of business for the Democrats will be to pass a redistricting bill that will decide the legislative districts for the next 10 years. Additionally, if the progressive income tax measure fails during the General Election, a tax increase will be required. In fact, the Illinois Lieutenant Governor has stated publicly that if the ballot measure fails to pass, Democrats expect to increase the flat tax by 20%. This will not be enough to put the State on sound financial footing. As such, businesses and residents can expect there to be service taxes included in the mix. This will put the Sales Tax Discount earned by retailers for administering and collecting state and local sales taxes squarely back in the crosshairs of the General Assembly. Finally, MHA members in Illinois should expect there to be the normal list of employment and worker-related issues that will include, but are not limited to, paid sick leave, scheduling rules, unemployment insurance, workers compensation, and independent contractor misclassification reform.
Obituaries
Farm & Home Hardware
Waupun, WI

Gasser Hardware
Lancaster, WI
Service Spotlight
Business Forms & Supplies
Remember to make MHA your first contact for business forms and supplies. MHA members can purchase a variety of forms/supplies such as:

  • Gift Certificates
  • Purchase Order/Receipt Books
  • Employment Applications
  • Labels and Tags
  • Personalized Envelopes and Letterhead
  • Checks and Deposit Slips

Testimonial

“MHA makes it so easy to order/re-order checks and envelopes. Within two minutes, I can call the office, tell them my name and store, and ask to order/re-order my computer-generated checks with the self-sealing, dual window envelopes. It doesn’t get any easier than that. I wish the rest of my daily tasks went that smoothly!”

Beth Grill
Gus Bock’s Ace Hardware
Dyer, IN

For more information about MHA’s Business Forms & Supplies, please contact Judy Borski by phone (800-888-1817 ext. 361) or by email judyb@midwesthardware.com.