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Alert to Minnesota HFA members; Deadline nears

Minnesota furniture retailers have until Dec. 21 to ask to be included in a free and voluntary product-testing program for regulated flame retardants. The offer was issued in October by state government’s Chemicals in Products Interagency Team.

“The CPI Team is offering assistance with testing a selection of your products for levels of restricted flame retardants in advance of a July 1, 2019, deadline that those flame-retardants be under 1,000 parts per million in furniture and children’s products sold by retailers in Minnesota,” the state notice said. 

Four chemicals deemed to be potentially hazardous are covered.

The benefits of seeking the testing, according to the state, include verifying compliance of some products before the July 1, 2019, deadline, and generating “positive word-of-mouth from customers to potential future customers.”

Test results would be considered public records, Michelle Gin with the Health Risk Intervention Unit of the Minnesota Department of Health told the HFA. Results would not be posted on a state website, she said, but they would be made available to anyone upon request.

Retailers who request testing should consider whether they would want the results to be made public.

For more information about the program, or to apply, they can contact Michelle Gin of the Minnesota Department of Health at 651-201-4825.

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Despite trade truce, retailers remain uneasy

By Robert Bell

Global markets might be breathing a sigh of relief this week after President Trump and his Chinese counterpart, Xi Jinping, agreed to a cease-fire in their escalating trade war, but HFA members are not so confident. Many say the truce only delays the inevitable: Another tariff increase.

Under the handshake agreement , which came at the close of the Group of 20 summit in Buenos Aries late Saturday night, Trump won’t raise tariffs while negotiations continue and China will purchase more energy and agricultural products from the United States, according to a White House statement.

The truce between the two leaders means Trump is essentially backing off his threat to raise U.S. tariffs on $200 billion worth of goods from 10 percent to 25 percent on Jan. 1.  Those goods overwhelmingly include many household items including furniture and furniture components such as metal coils and fabric.

But that truce might not last long. Both leaders agreed to a 90-day moratorium, hoping the extra time will allow for a resolution to be found. And in a series of Twitter posts Tuesday morning by Trump, that agreement appeared to be further eroding. Trump again threatened to slap a range of import penalties on Chinese import penalties if they did not make major changes in their economic relationship with the United States.

“President Xi and I want this deal to happen, and it probably will,” Trump wrote. “But if not remember, I am a Tariff man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power.”

The president’s latest tweet only reinforces retailers and industry experts’ skepticism that an agreement can be reached, saying the time frame is ambitious given the unresolved issues between both countries.

HFA member Matt Schewel, director of store operations at Schewel Furniture, said Saturday’s announcement “merely postpones the uncertainty for U.S. furniture retailers.”

Schewel once covered trade policy as a journalist In Washington before joining the family business. “Having witnessed previous trade negotiations, I find it highly unlikely that China will agree to massive structural reforms to its economy within three months,” he said.

Already the United States has slapped tariffs on $250 billion of Chinese goods, or about half of all imported products from China. Beijing responded by imposing similar tariffs on about $110 billion of American merchandise, or roughly 85 percent of all U.S. imports.

The moratorium was of little solace to Irwin Danto, the third-generation leader of Danto Furniture in Detroit. “I was hoping for some sanity to all this, but nothing’s really changed,” he said. “Call it what you want, a tariff or a tax but it’s coming.”

Danto does a substantial amount of business in Chinese-import lines like Ashley, Coaster and Furniture of America. Ashley and FoA are transitioning their manufacturing to Vietnam in anticipation of the tariff increase.

Danto said the tariffs won’t affect pricing on his current inventory, but future invoices will reflect the tariffs. He’s not sure a price increase will be as damaging as many retailers first thought. He said millennials might not be as driven by price as older consumers, and that consumers are driven by the discount rather than the price.

Still, said Danto, he would like to see the tariffs go away. “The economy can be so much better for both countries,” he said.

Chris Andersen, the Home Furnishings Association’s chief lobbyist in Washington, said retailers should not read too much into the handshake agreement. “The reality is this deal could have been made months ago by both sides so, really, nothing has changed except Dave agreed to continue talking,“ said Andresen.

Andresen said China has felt the greater pain from the exchange of tariffs, in part because it relies more on exports. “Trump still has the leverage here, but whether he can make something happen is very much in doubt.”

Cal/OSHA Update: More “paperwork” required for larger furniture retailers

By Doug Clark
Content Manager, Home Furnishings Association
 

It’s not a suggestion anymore. Cal/OSHA, California’s occupational safety and health agency, now requires that many employers file summaries of work-related injuries and illnesses electronically by December 31. Furniture retailers are among the covered businesses.

 

The rule applies to companies with 250 or more employees, except for those exempted here and those with 20 to 249 employees in categories listed here. Home furnishings stores are included.

 

The form is 300A, an annual summary of incidents. The filing covers the 2017 calendar year and requires employers to list the numbers of work-related deaths, injuries, skin disorders, respiratory conditions, poisonings, cases of hearing loss and all other illnesses at their facilities. They also must report total numbers of lost workdays or incidents leading to job transfers or work restrictions.

 

The federal Occupational Safety and Health Administration mandates this reporting, but Cal/OSHA, which administers worker safety programs in California, did not before now. California businesses that didn’t comply faced no penalty from state enforcers. Now they could receive a citation if they don’t have the 300A on file – but likely only if an inspection is triggered by a serious accident or employee complaint, according to Frank Polizzi, a public information officer for the state’s Department of Industrial Relations.

 

Covered employers are directed to file the form 300A through the federal OSHA portal, which can be found here. Those who need help should call Cal/OSHA’s Consultation Line at 800-963-9424. Operators can talk them through the process, Polizzi said.

 

Why is the extra electronic “paperwork” necessary? Employers have reason to wonder, especially since they already meet other OSHA reporting requirements. Federal OSHA documents say the agency uses injury and illness numbers to trigger comprehensive worksite inspections, the Seyfarth Shaw LLP law firm wrote October 22 on its Workplace Safety and Environmental Law Alert Blog. But Polizzi, with the California Department of Industrial Relations, said that won’t happen in the Golden State. Rather, inspections respond to serious incidents and employee complaints, he said.

 

The annual reports will be public records, making it easier for consumers, competitors or the media to see covered businesses’ workplace safety data.

 

The California reporting mandate technically covers only the 2017 calendar year – for now. The state is pursuing a permanent requirement and will seek public comments and hold a public hearing before finalizing the rule. The details aren’t available yet but will be posted here, Polizzi said.

 

Employers who object to the additional reporting should watch for the chance to express their concerns.

US Supreme Court Overturns Quill

BREAKING NEWS: US Supreme Court Overturns Quill

Today the U.S. Supreme Court handed down its decision in the South Dakota v. Wayfair case–South Dakota (and brick-and-mortar retailers everywhere) won. This means states can require retailers to collect sales tax regardless of physical nexus–all retailers are equal.

Here’s the Court’s decision. It was a 5-4 decision written by Justice Anthony Kennedy, joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch. Chief Justice John Roberts and Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented.

The HFA has been working on leveling the playing field for furniture retailers for several years now–decades if you consider the work started in the 1980s against trans-shippers. Marketplace Fairness has been the hot topic of every advocacy fly-in and many calls to action. Your voices were heard! Thank you to all of the members and the members of the Government Relations Action Team for your tenacity and diligence on this issue.

We’ll be looking at the decision in more detail and discussing next steps and how this unfolds so stay tuned!

Sincerely,
Sharron
HFA CEO, Sharron Bradley

What you need to know about complying with the EPA’s formaldehyde rule

EPA Formaldehyde Rule:

The Environmental Protection Agency published its rule covering formaldehyde emissions in composite wood products in 2016. Most of the main requirements were scheduled to be implemented by December 2017.
These requirements were delayed until December 2018 by the Trump Administration. Consequently, The Sierra Club and Earth Justice filed a lawsuit in California seeking to vacate that extension ruling following that delay.

The court ruled in Sierra Club’s favor in mid-February. This established a new implementation timeline. Current California regulations only apply to products distributed in California. The new EPA rule applies to retailers nationwide.
Most importantly, retailers must maintain bills of lading, invoices, or comparable documents for three years. In addition, they will need a statement of TSCA Section VI compliance under the EPA rule.
This chain-of-custody is critical for compliance purposes.

CARB Phase II Compliance:

All domestic & imported composite wood products containing formaldehyde need to be labeled as CARB Phase II Compliant, beginning in June 1, 2018. From June 1, 2018 through March 22, 2019 CARB Phase II compliance (labeled) will equal EPA TSCA Title VI as long as the Third-Party Certifier (TPC) is recognized by both CARB and EPA. After March 22, 2019, imported and domestic composite wood products will need to have the EPA TSCA Title VI label. CARB is still relevant in California, but the EPA will cover everyone else.

Be Sure Your Products are Compliant:

While the vast majority of composite wood products are currently CARB Phase II compliant, CARB Phase II compliant labels on product being sold should be checked by retailers. Finally, for retailers outside of California with no possibility of selling in to California, make sure you understand and retain your chain of custody documents (invoices, bills of lading, or comparable documents with a statement of TSCA Section VI compliance).