Author: Brian Sanchez

Despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the economy, the law limiting LGBT protections will cost the state more than $3.76 billion in lost business over a dozen years, according to an Associated Press analysis.

Over the past year, North Carolina has suffered financial hits ranging from scuttled plans for a PayPal facility that would have added an estimated $2.66 billion to the state’s economy to a canceled Ringo Starr concert that deprived a town’s amphitheater of about $33,000 in revenue. The blows have landed in the state’s biggest cities as well as towns surrounding its flagship university, and from the mountains to the coast.

North Carolina could lose hundreds of millions more because the NCAA is avoiding the state, usually a favored host. The group is set to announce sites for various championships through 2022, and North Carolina won’t be among them as long as the law is on the books. The NAACP also has initiated a national economic boycott.

The AP analysis (http://apne.ws/2n9GSjE ) — compiled through interviews and public records requests — represents the largest reckoning yet of how much the law, passed one year ago, could cost the state. The law excludes gender identity and sexual orientation from statewide antidiscrimination protections, and requires transgender people to use restrooms corresponding to the sex on their birth certificates in many public buildings.

Still, AP’s tally ( http://bit.ly/2o9Dzdd ) is likely an underestimation of the law’s true costs. The count includes only data obtained from businesses and state or local officials regarding projects that canceled or relocated because of HB2. A business project was counted only if AP determined through public records or interviews that HB2 was why it pulled out.

Some projects that left, such as a Lionsgate television production that backed out of plans in Charlotte, weren’t included because of a lack of data on their economic impact.

The AP also tallied the losses of dozens of conventions, sporting events and concerts through figures from local officials. The AP didn’t attempt to quantify anecdotal reports that lacked hard numbers, or to forecast the loss of future conventions.

Bank of America CEO Brian Moynihan — who leads the largest company based in North Carolina — said he’s spoken privately to business leaders who went elsewhere with projects or events because of the controversy, and he fears more decisions like that are being made quietly.

“Companies are moving to other places because they don’t face an issue that they face here,” he told a World Affairs Council of Charlotte luncheon last month. “What’s going on that you don’t know about? What convention decided to take you off the list? What location for a distribution facility took you off the list? What corporate headquarters consideration for a foreign company — there’s a lot of them out there — just took you off the list because they just didn’t want to be bothered with the controversy? That’s what eats you up.”

Other measures show the country’s ninth most populous state has a healthy economy. By quarterly gross domestic product, the federal government said, North Carolina had the nation’s 10th fastest-growing economy six months after the law passed. The vast majority of large companies with existing operations in the state — such as American Airlines, with its second-largest hub in Charlotte — made no public moves to financially penalize North Carolina.

Shortly after he signed the law, Republican then-Gov. Pat McCrory issued a statement assuring residents it wouldn’t affect North Carolina’s status as “one of the top states to do business in the country.”

HB2 supporters say its costs have been tiny compared with an economy estimated at more than $500 billion a year, roughly the size of Sweden’s. They say they’re willing to absorb those costs if the law prevents sexual predators posing as transgender people from entering private spaces to molest women and girls — acts the law’s detractors say are imagined.

Lt. Gov. Dan Forest, one of the strongest supporters, accused news organizations of creating a false picture of economic upheaval. A global equestrian competition that’s coming to North Carolina in 2018 despite HB2 is projected to have an economic impact bigger than the sporting events that have canceled, Forest said. The Swiss-based group behind the event estimated its spending poured about $250 million into the French region of Normandy the last time it was held — 2014. The organization said the figure came from a study by consulting and accounting firm Deloitte, but the Federation Equestre Internationale declined to release the report.

Forest declined a request for an interview based on AP’s analysis.

“The effect is minimal to the state,” Forest told Texas legislators considering a similar law. “Our economy is doing well. Don’t be fooled by the media. This issue is not about the economy. This issue is about privacy, safety and security in the most vulnerable places we go.”

But AP’s analysis shows the economy could be growing faster if not for projects that have already canceled.

Those include PayPal canceling a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700-plus jobs to the same area, and Deutsche Bank scuttling a plan for 250 jobs in the Raleigh area. Other companies that backed out include Adidas, which is building its first U.S. sports shoe factory employing 160 near Atlanta rather than a High Point site, and Voxpro, which opted to hire hundreds of customer support workers in Athens, Georgia, rather than the Raleigh area.

“We couldn’t set up operations in a state that was discriminating against LGBT” people, Dan Kiely, Voxpro founder and CEO, said in an interview.

All told, the state has missed out on more than 2,900 direct jobs that went elsewhere.

Supporters are hard-pressed to point to economic benefits from the law, said James Kleckley, of East Carolina University’s business college.

“I don’t know of any examples where somebody located here because of HB2,” he said. “If you look at a law, whether or not you agree with it or don’t agree with it, there are going to be positive effects and negative effects. Virtually everything we know about (HB2) are the negative effects. Even anecdotally I don’t know any positive effects.”

An analysis by the state Commerce Department shortly before HB2 was enacted shows state officials expected the PayPal expansion to contribute more than $200 million annually to North Carolina’s gross domestic product — an overall measure of the economy. By the end of 2028, the state expected PayPal to have added $2.66 billion to the state economy.

The same analysis of the Deutsche Bank project estimated a total impact of about $543 million by the end of 2027. The economic model has been used for more than a decade — with some updates along the way — when the state offers major discretionary tax breaks to attract jobs.

State officials said they didn’t run the same financial analysis for CoStar, Voxpro and Adidas, so losses attributed to them were calculated using payroll numbers and other figures from the companies or state documents.

Meanwhile, canceled conventions, concerts and sporting events ranging from the NBA All-Star Game to a Bruce Springsteen show have deprived the state of more than $196 million. The number was compiled through email exchanges and interviews with local tourism officials.

All told, the state will have missed out on more than $3.76 billion by the end of 2028. The losses are based on projects that already went elsewhere — so the money won’t be recouped even if the law is struck down in court or repealed.

By the end of 2017 alone, the lost business will total more than $525 million.

Tourism officials in several cities say the numbers they report represent only a fraction of the damage the law has done. They typically track large conventions but don’t have firm numbers for when groups or tourists cancel smaller deals — or rule out North Carolina before booking.

“The biggest impact is how many times our phones are not ringing now,” said Shelly Green, CEO of the Durham Convention & Visitors Bureau.

When Green’s bureau sought to tally cancellations, it was able to count several large sporting events and conventions that backed out, depriving the city of more than $11 million, she said. But officials found hotels and meeting planners were tight-lipped about other events.

“There are a lot more meetings that have canceled, but we don’t have data on them,” she said.

Elsewhere, tourism setbacks range from an estimated $100 million lost when the 2017 NBA All-Star Game moved out of Charlotte to $36,000 in spending taken elsewhere when the Lutheran Financial Managers Convention backed out of Fayetteville. Seven hundred part-time workers at Raleigh’s PNC Arena lost at least $130,000 in wages because of cancellations by Pearl Jam, Cirque Du Soleil and others.

Other financial signals of disapproval have been more symbolic than clearly harmful.

More than two dozen cities and states, from Honolulu to Vermont, have banned taxpayer-funded visits to North Carolina because of HB2. Most said they couldn’t estimate the money not spent on business travel. But in Providence, Rhode Island, officials refused to spend even the remaining $495 to send three city employees to a Charlotte conference after sponsors picked up most of the costs, city spokesman Victor Morente said in an email.

Dozens of investment firms have urged North Carolina to repeal HB2, but most of those contacted in recent weeks, such as John Hancock and Morgan Stanley, wouldn’t discuss any financial measures they took to penalize the state. Trillium Asset Management, which manages more than $2 billion for wealthy families and foundations, had dozens of clients request that their holdings exclude bonds issued by North Carolina state or municipal governments, Chief Executive Officer Matt Patsky said in an interview.

What impact did selling off several million dollars of municipal bonds have? Impossible to measure, Patsky said.

In September, despite the law, Asheville’s Chamber of Commerce announced that biotech company Avadim was adding 550 jobs. Local officials call it the biggest single job creator in area history.

But HB2 jeopardized another project of similar size for the left-leaning mountain city. Chamber CEO Kit Cramer said last year that another company considering bringing 500 technology jobs was balking because of HB2, adding: “That’s a loss that would be incredibly hard to swallow.” Cramer said in an email in March that the company hasn’t made a decision. She didn’t give further details; that potential loss wasn’t included in AP’s count.

Charlotte, North Carolina’s largest city, has lost projects totaling 2,000 jobs because of HB2, Chamber of Commerce research director Chuck McShane said via email. According to separate documents obtained through public records requests, the majority were in the PayPal and CoStar projects.

CoStar, a real-estate research firm, was entering final negotiations to bring 732 jobs to Charlotte in September when its board backed out because of negative publicity over HB2, according to an email between a chamber executive and a city official. When the company picked Virginia, the reversal cost North Carolina at least $250 million in economic impact over the next six years, according to figures from both states.

“I fear this will be an epidemic outcome for many projects we are still in the running for at this time,” Jeffrey Edge of the Charlotte Chamber wrote in the September email exchange first reported by The Charlotte Observer.

Economic losses also hit smaller towns, such as those surrounding the University of North Carolina. When the San Francisco Symphony pulled out of two concerts scheduled for April 2017, the move had a ripple effect totaling about $325,000, according to Patty Griffin, of the Chapel Hill/Orange County Visitors Bureau.

“Memorial Hall will be empty those two nights and see no revenue for tickets or concessions, and no employees will work,” she said via email. “The attendees for most of them who have dinner, drinks and desserts either before or after the performance will not come out, which impacts local restaurants.”

Green, the Durham tourism official, said, “When you think about it, this whole thing is just such a Dumpster fire, and nobody wants to go near it.”

Go to Source

Despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the economy, the law limiting LGBT protections will cost the state more than $3.76 billion in lost business over a dozen years, according to an Associated Press analysis.

Over the past year, North Carolina has suffered financial hits ranging from scuttled plans for a PayPal facility that would have added an estimated $2.66 billion to the state’s economy to a canceled Ringo Starr concert that deprived a town’s amphitheater of about $33,000 in revenue. The blows have landed in the state’s biggest cities as well as towns surrounding its flagship university, and from the mountains to the coast.

North Carolina could lose hundreds of millions more because the NCAA is avoiding the state, usually a favored host. The group is set to announce sites for various championships through 2022, and North Carolina won’t be among them as long as the law is on the books. The NAACP also has initiated a national economic boycott.

The AP analysis (http://apne.ws/2n9GSjE ) — compiled through interviews and public records requests — represents the largest reckoning yet of how much the law, passed one year ago, could cost the state. The law excludes gender identity and sexual orientation from statewide antidiscrimination protections, and requires transgender people to use restrooms corresponding to the sex on their birth certificates in many public buildings.

Still, AP’s tally ( http://bit.ly/2o9Dzdd ) is likely an underestimation of the law’s true costs. The count includes only data obtained from businesses and state or local officials regarding projects that canceled or relocated because of HB2. A business project was counted only if AP determined through public records or interviews that HB2 was why it pulled out.

Some projects that left, such as a Lionsgate television production that backed out of plans in Charlotte, weren’t included because of a lack of data on their economic impact.

The AP also tallied the losses of dozens of conventions, sporting events and concerts through figures from local officials. The AP didn’t attempt to quantify anecdotal reports that lacked hard numbers, or to forecast the loss of future conventions.

Bank of America CEO Brian Moynihan — who leads the largest company based in North Carolina — said he’s spoken privately to business leaders who went elsewhere with projects or events because of the controversy, and he fears more decisions like that are being made quietly.

“Companies are moving to other places because they don’t face an issue that they face here,” he told a World Affairs Council of Charlotte luncheon last month. “What’s going on that you don’t know about? What convention decided to take you off the list? What location for a distribution facility took you off the list? What corporate headquarters consideration for a foreign company — there’s a lot of them out there — just took you off the list because they just didn’t want to be bothered with the controversy? That’s what eats you up.”

Other measures show the country’s ninth most populous state has a healthy economy. By quarterly gross domestic product, the federal government said, North Carolina had the nation’s 10th fastest-growing economy six months after the law passed. The vast majority of large companies with existing operations in the state — such as American Airlines, with its second-largest hub in Charlotte — made no public moves to financially penalize North Carolina.

Shortly after he signed the law, Republican then-Gov. Pat McCrory issued a statement assuring residents it wouldn’t affect North Carolina’s status as “one of the top states to do business in the country.”

HB2 supporters say its costs have been tiny compared with an economy estimated at more than $500 billion a year, roughly the size of Sweden’s. They say they’re willing to absorb those costs if the law prevents sexual predators posing as transgender people from entering private spaces to molest women and girls — acts the law’s detractors say are imagined.

Lt. Gov. Dan Forest, one of the strongest supporters, accused news organizations of creating a false picture of economic upheaval. A global equestrian competition that’s coming to North Carolina in 2018 despite HB2 is projected to have an economic impact bigger than the sporting events that have canceled, Forest said. The Swiss-based group behind the event estimated its spending poured about $250 million into the French region of Normandy the last time it was held — 2014. The organization said the figure came from a study by consulting and accounting firm Deloitte, but the Federation Equestre Internationale declined to release the report.

Forest declined a request for an interview based on AP’s analysis.

“The effect is minimal to the state,” Forest told Texas legislators considering a similar law. “Our economy is doing well. Don’t be fooled by the media. This issue is not about the economy. This issue is about privacy, safety and security in the most vulnerable places we go.”

But AP’s analysis shows the economy could be growing faster if not for projects that have already canceled.

Those include PayPal canceling a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700-plus jobs to the same area, and Deutsche Bank scuttling a plan for 250 jobs in the Raleigh area. Other companies that backed out include Adidas, which is building its first U.S. sports shoe factory employing 160 near Atlanta rather than a High Point site, and Voxpro, which opted to hire hundreds of customer support workers in Athens, Georgia, rather than the Raleigh area.

“We couldn’t set up operations in a state that was discriminating against LGBT” people, Dan Kiely, Voxpro founder and CEO, said in an interview.

All told, the state has missed out on more than 2,900 direct jobs that went elsewhere.

Supporters are hard-pressed to point to economic benefits from the law, said James Kleckley, of East Carolina University’s business college.

“I don’t know of any examples where somebody located here because of HB2,” he said. “If you look at a law, whether or not you agree with it or don’t agree with it, there are going to be positive effects and negative effects. Virtually everything we know about (HB2) are the negative effects. Even anecdotally I don’t know any positive effects.”

An analysis by the state Commerce Department shortly before HB2 was enacted shows state officials expected the PayPal expansion to contribute more than $200 million annually to North Carolina’s gross domestic product — an overall measure of the economy. By the end of 2028, the state expected PayPal to have added $2.66 billion to the state economy.

The same analysis of the Deutsche Bank project estimated a total impact of about $543 million by the end of 2027. The economic model has been used for more than a decade — with some updates along the way — when the state offers major discretionary tax breaks to attract jobs.

State officials said they didn’t run the same financial analysis for CoStar, Voxpro and Adidas, so losses attributed to them were calculated using payroll numbers and other figures from the companies or state documents.

Meanwhile, canceled conventions, concerts and sporting events ranging from the NBA All-Star Game to a Bruce Springsteen show have deprived the state of more than $196 million. The number was compiled through email exchanges and interviews with local tourism officials.

All told, the state will have missed out on more than $3.76 billion by the end of 2028. The losses are based on projects that already went elsewhere — so the money won’t be recouped even if the law is struck down in court or repealed.

By the end of 2017 alone, the lost business will total more than $525 million.

Tourism officials in several cities say the numbers they report represent only a fraction of the damage the law has done. They typically track large conventions but don’t have firm numbers for when groups or tourists cancel smaller deals — or rule out North Carolina before booking.

“The biggest impact is how many times our phones are not ringing now,” said Shelly Green, CEO of the Durham Convention & Visitors Bureau.

When Green’s bureau sought to tally cancellations, it was able to count several large sporting events and conventions that backed out, depriving the city of more than $11 million, she said. But officials found hotels and meeting planners were tight-lipped about other events.

“There are a lot more meetings that have canceled, but we don’t have data on them,” she said.

Elsewhere, tourism setbacks range from an estimated $100 million lost when the 2017 NBA All-Star Game moved out of Charlotte to $36,000 in spending taken elsewhere when the Lutheran Financial Managers Convention backed out of Fayetteville. Seven hundred part-time workers at Raleigh’s PNC Arena lost at least $130,000 in wages because of cancellations by Pearl Jam, Cirque Du Soleil and others.

Other financial signals of disapproval have been more symbolic than clearly harmful.

More than two dozen cities and states, from Honolulu to Vermont, have banned taxpayer-funded visits to North Carolina because of HB2. Most said they couldn’t estimate the money not spent on business travel. But in Providence, Rhode Island, officials refused to spend even the remaining $495 to send three city employees to a Charlotte conference after sponsors picked up most of the costs, city spokesman Victor Morente said in an email.

Dozens of investment firms have urged North Carolina to repeal HB2, but most of those contacted in recent weeks, such as John Hancock and Morgan Stanley, wouldn’t discuss any financial measures they took to penalize the state. Trillium Asset Management, which manages more than $2 billion for wealthy families and foundations, had dozens of clients request that their holdings exclude bonds issued by North Carolina state or municipal governments, Chief Executive Officer Matt Patsky said in an interview.

What impact did selling off several million dollars of municipal bonds have? Impossible to measure, Patsky said.

In September, despite the law, Asheville’s Chamber of Commerce announced that biotech company Avadim was adding 550 jobs. Local officials call it the biggest single job creator in area history.

But HB2 jeopardized another project of similar size for the left-leaning mountain city. Chamber CEO Kit Cramer said last year that another company considering bringing 500 technology jobs was balking because of HB2, adding: “That’s a loss that would be incredibly hard to swallow.” Cramer said in an email in March that the company hasn’t made a decision. She didn’t give further details; that potential loss wasn’t included in AP’s count.

Charlotte, North Carolina’s largest city, has lost projects totaling 2,000 jobs because of HB2, Chamber of Commerce research director Chuck McShane said via email. According to separate documents obtained through public records requests, the majority were in the PayPal and CoStar projects.

CoStar, a real-estate research firm, was entering final negotiations to bring 732 jobs to Charlotte in September when its board backed out because of negative publicity over HB2, according to an email between a chamber executive and a city official. When the company picked Virginia, the reversal cost North Carolina at least $250 million in economic impact over the next six years, according to figures from both states.

“I fear this will be an epidemic outcome for many projects we are still in the running for at this time,” Jeffrey Edge of the Charlotte Chamber wrote in the September email exchange first reported by The Charlotte Observer.

Economic losses also hit smaller towns, such as those surrounding the University of North Carolina. When the San Francisco Symphony pulled out of two concerts scheduled for April 2017, the move had a ripple effect totaling about $325,000, according to Patty Griffin, of the Chapel Hill/Orange County Visitors Bureau.

“Memorial Hall will be empty those two nights and see no revenue for tickets or concessions, and no employees will work,” she said via email. “The attendees for most of them who have dinner, drinks and desserts either before or after the performance will not come out, which impacts local restaurants.”

Green, the Durham tourism official, said, “When you think about it, this whole thing is just such a Dumpster fire, and nobody wants to go near it.”

Go to Source

RALEIGH, N.C. — Despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the economy, the law limiting LGBT protections will cost the state more than $3.76 billion in lost business over a dozen years, according to an Associated Press analysis.

Over the past year, North Carolina has suffered financial hits ranging from scuttled plans for a PayPal facility that would have added an estimated $2.66 billion to the state’s economy to a canceled Ringo Starr concert that deprived a town’s amphitheater of about $33,000 in revenue. The blows have landed in the state’s biggest cities as well as towns surrounding its flagship university, and from the mountains to the coast.

North Carolina could lose hundreds of millions more because the NCAA is avoiding the state, usually a favored host. The group is set to announce sites for various championships through 2022, and North Carolina won’t be among them as long as the law is on the books. The NAACP also has initiated a national economic boycott.

The AP analysis (http://apne.ws/2n9GSjE ) compiled through interviews and public records requests represents the largest reckoning yet of how much the law, passed one year ago, could cost the state. The law excludes gender identity and sexual orientation from statewide antidiscrimination protections, and requires transgender people to use restrooms corresponding to the sex on their birth certificates in many public buildings.

Still, AP’s tally ( http://bit.ly/2o9Dzdd ) is likely an underestimation of the law’s true costs. The count includes only data obtained from businesses and state or local officials regarding projects that canceled or relocated because of House Bill 2. A business project was counted only if AP determined through public records or interviews that House Bill 2 was why it pulled out.

Some projects that left, such as a Lionsgate television production that backed out of plans in Charlotte, weren’t included because of a lack of data on their economic impact.

The AP also tallied the losses of dozens of conventions, sporting events and concerts through figures from local officials. The AP didn’t attempt to quantify anecdotal reports that lacked hard numbers, or to forecast the loss of future conventions.

Gov. Roy Cooper, a staunch opponent of House Bill 2, said the economic analysis demonstrates the need for the General Assembly to repeal the law.

“North Carolina’s economy stands to lose nearly $4 billion because of House Bill 2. That means fewer jobs and less money in the pockets of middle-class families,” Cooper said in a statement. “We need to fix this now. I remain ready to support a compromise that works to end discrimination and brings jobs and sports back to North Carolina.”

Bank of America CEO Brian Moynihan, who leads the largest company based in North Carolina, said he’s spoken privately to business leaders who went elsewhere with projects or events because of the controversy, and he fears more decisions like that are being made quietly.

“Companies are moving to other places because they don’t face an issue that they face here,” he told a World Affairs Council of Charlotte luncheon last month. “What’s going on that you don’t know about? What convention decided to take you off the list? What location for a distribution facility took you off the list? What corporate headquarters consideration for a foreign company — there’s a lot of them out there — just took you off the list because they just didn’t want to be bothered with the controversy? That’s what eats you up.”

Other measures show the country’s ninth most populous state has a healthy economy. By quarterly gross domestic product, the federal government said, North Carolina had the nation’s 10th fastest-growing economy six months after the law passed. The vast majority of large companies with existing operations in the state — such as American Airlines, with its second-largest hub in Charlotte — made no public moves to financially penalize North Carolina.

Shortly after he signed the law, Republican then-Gov. Pat McCrory issued a statement assuring residents it wouldn’t affect North Carolina’s status as “one of the top states to do business in the country.”

House Bill 2 supporters say its costs have been tiny compared with an economy estimated at more than $500 billion a year, roughly the size of Sweden’s. They say they’re willing to absorb those costs if the law prevents sexual predators posing as transgender people from entering private spaces to molest women and girls – acts the law’s detractors say are imagined.

Lt. Gov. Dan Forest, one of the strongest supporters, accused news organizations of creating a false picture of economic upheaval. A global equestrian competition that’s coming to North Carolina in 2018 despite House Bill 2 is projected to have an economic impact bigger than the sporting events that have canceled, Forest said. The Swiss-based group behind the event estimated its spending poured about $250 million into the French region of Normandy in 2014, the last time it was held. The organization said the figure came from a study by consulting and accounting firm Deloitte, but the Federation Equestre Internationale declined to release the report.

Forest declined a request for an interview based on AP’s analysis.

“The effect is minimal to the state,” Forest told Texas legislators considering a similar law. “Our economy is doing well. Don’t be fooled by the media. This issue is not about the economy. This issue is about privacy, safety and security in the most vulnerable places we go.”

Tami Fitzgerald, executive director of North Carolina Values Coalition, which backs House Bill 2 agreed that the dire economic impact projections are overstated.

“All indicators point to the state’s economy as one of the healthiest and one of the most business-friendly states in the nation,” Fitzgerald said in a statement. “Not one company has left North Carolina because of HB2. In fact, it’s just the opposite: Bank of America, Apple, Google, Corning, CSX, Lance, LendingTree, Pepsi, Yokohama Tire, Braeburn Pharmaceuticals are among hundreds of businesses that expanded, moved or reinvested in their operations here despite some of their CEOs voicing angst over HB2.

“The AP’s 12-year estimate equates to tiny fraction of North Carolina’s estimated GDP of $6.8 trillion over the next 12 years and fails to account for events and businesses that will choose the state because of our privacy protections,” she said.

But AP’s analysis shows the economy could be growing faster if not for projects that have already canceled.

Those include PayPal canceling a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700-plus jobs to the same area, and Deutsche Bank scuttling a plan for 250 jobs in the Raleigh area. Other companies that backed out include Adidas, which is building its first U.S. sports shoe factory employing 160 near Atlanta rather than a High Point site, and Voxpro, which opted to hire hundreds of customer support workers in Athens, Georgia, rather than the Raleigh area.

“We couldn’t set up operations in a state that was discriminating against LGBT” people, Dan Kiely, Voxpro founder and CEO, said in an interview.

All told, the state has missed out on more than 2,900 direct jobs that went elsewhere.

North Carolina Chamber officials declined to comment on the analysis, saying they haven’t reviewed it yet.

Supporters are hard-pressed to point to economic benefits from the law, said James Kleckley, of East Carolina University’s business college.

“I don’t know of any examples where somebody located here because of HB2,” he said. “If you look at a law, whether or not you agree with it or don’t agree with it, there are going to be positive effects and negative effects. Virtually everything we know about (the law) are the negative effects. Even anecdotally I don’t know any positive effects.”

An analysis by the state Commerce Department shortly before House Bill 2 was enacted shows state officials expected the PayPal expansion to contribute more than $200 million annually to North Carolina’s gross domestic product — an overall measure of the economy. By the end of 2028, the state expected PayPal to have added $2.66 billion to the state economy.

The same analysis of the Deutsche Bank project estimated a total impact of about $543 million by the end of 2027. The economic model has been used for more than a decade — with some updates along the way — when the state offers major discretionary tax breaks to attract jobs.

State officials said they didn’t run the same financial analysis for CoStar, Voxpro and Adidas, so losses attributed to them were calculated using payroll numbers and other figures from the companies or state documents.

Meanwhile, canceled conventions, concerts and sporting events ranging from the NBA All-Star Game to a Bruce Springsteen show have deprived the state of more than $196 million. The number was compiled through email exchanges and interviews with local tourism officials.

All told, the state will have missed out on more than $3.76 billion by the end of 2028. The losses are based on projects that already went elsewhere — so the money won’t be recouped even if the law is struck down in court or repealed.

By the end of 2017 alone, the lost business will total more than $525 million.

Tourism officials in several cities say the numbers they report represent only a fraction of the damage the law has done. They typically track large conventions but don’t have firm numbers for when groups or tourists cancel smaller deals or rule out North Carolina before booking.

“The biggest impact is how many times our phones are not ringing now,” said Shelly Green, CEO of the Durham Convention & Visitors Bureau.

When Green’s bureau sought to tally cancellations, it was able to count several large sporting events and conventions that backed out, depriving the city of more than $11 million, she said. But officials found hotels and meeting planners were tight-lipped about other events.

“There are a lot more meetings that have canceled, but we don’t have data on them,” she said.

Elsewhere, tourism setbacks range from an estimated $100 million lost when the 2017 NBA All-Star Game moved out of Charlotte to $36,000 in spending taken elsewhere when the Lutheran Financial Managers Convention backed out of Fayetteville. Seven hundred part-time workers at Raleigh’s PNC Arena lost at least $130,000 in wages because of cancellations by Pearl Jam, Cirque Du Soleil and others.

Other financial signals of disapproval have been more symbolic than clearly harmful.

More than two dozen cities and states, from Honolulu to Vermont, have banned taxpayer-funded visits to North Carolina because of House Bill 2. Most said they couldn’t estimate the money not spent on business travel. But in Providence, Rhode Island, officials refused to spend even the remaining $495 to send three city employees to a Charlotte conference after sponsors picked up most of the costs, city spokesman Victor Morente said in an email.

Dozens of investment firms have urged North Carolina to repeal House Bill 2, but most of those contacted in recent weeks, such as John Hancock and Morgan Stanley, wouldn’t discuss any financial measures they took to penalize the state. Trillium Asset Management, which manages more than $2 billion for wealthy families and foundations, had dozens of clients request that their holdings exclude bonds issued by North Carolina state or municipal governments, Chief Executive Officer Matt Patsky said in an interview.

What impact did selling off several million dollars of municipal bonds have? Impossible to measure, Patsky said.

In September, despite the law, Asheville’s Chamber of Commerce announced that biotech company Avadim was adding 550 jobs. Local officials call it the biggest single job creator in area history.

But House Bill 2 jeopardized another project of similar size for the left-leaning mountain city. Chamber CEO Kit Cramer said last year that another company considering bringing 500 technology jobs was balking because of House Bill 2, adding: “That’s a loss that would be incredibly hard to swallow.” Cramer said in an email in March that the company hasn’t made a decision. She didn’t give further details; that potential loss wasn’t included in AP’s count.

Charlotte, North Carolina’s largest city, has lost projects totaling 2,000 jobs because of House Bill 2, Chamber of Commerce research director Chuck McShane said via email. According to separate documents obtained through public records requests, the majority were in the PayPal and CoStar projects.

CoStar, a real-estate research firm, was entering final negotiations to bring 732 jobs to Charlotte in September when its board backed out because of negative publicity over House Bill 2, according to an email between a chamber executive and a city official. When the company picked Virginia, the reversal cost North Carolina at least $250 million in economic impact over the next six years, according to figures from both states.

“I fear this will be an epidemic outcome for many projects we are still in the running for at this time,” Jeffrey Edge of the Charlotte Chamber wrote in the September email exchange first reported by The Charlotte Observer.

Economic losses also hit smaller towns, such as those surrounding the University of North Carolina. When the San Francisco Symphony pulled out of two concerts scheduled for April 2017, the move had a ripple effect totaling about $325,000, according to Patty Griffin, of the Chapel Hill/Orange County Visitors Bureau.

“Memorial Hall will be empty those two nights and see no revenue for tickets or concessions, and no employees will work,” she said via email. “The attendees for most of them who have dinner, drinks and desserts either before or after the performance will not come out, which impacts local restaurants.”

Green, the Durham tourism official, said, “When you think about it, this whole thing is just such a Dumpster fire, and nobody wants to go near it.”

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Local media have reported that shortly before rising an conflict that killed 4 people including a policeman nearby Britain’s council in executive London, Khalid Masood sent an encrypted summary around Whatsapp. PHOTO: AFP

LONDON: British Prime Minister Theresa May wants record firms to assistance law coercion agencies benefit entrance to messages sent regulating their platforms if needed, though how they do that is adult to a companies themselves, her orator pronounced on Monday.

“These are companies that have fanciful technical expertise, are universe leading, and where they can do some-more to support we would like them to do so,” a orator told reporters.

New detain over London conflict as govt eyes WhatsApp

“If there are resources where law coercion agencies need to be means to entrance a contents, they should be means to do so. How that is achieved, we think, is a matter for a talks after in a week.”

Earlier on Sunday, British interior apportion Amber Rudd pronounced end-to-end encryption of messages offering by services like Whatsapp are “completely unacceptable” and there should be no “secret place for terrorists to communicate”.

Local media have reported that shortly before rising an conflict that killed 4 people including a policeman nearby Britain’s council in executive London, Khalid Masood sent an encrypted summary around Whatsapp.

WhatsApp finally enables confidence underline we were all watchful for

“That is my perspective – it is totally unacceptable, there should be no place for terrorists to hide. We need to make certain organisations like Whatsapp, and there are copiousness of others like that, don’t yield a tip place for terrorists to promulgate with any other,” Rudd told a BBC’s Andrew Marr show.

“We need to make certain that a comprehension services have a ability to get into situations like encrypted WhatsApp.”

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The Zambia Information and Communications Technology Authority (ZICTA) has directed Zambia Electricity Supply Corporation (Zesco) to cut access to unlicensed international data transit operators illegally offering services to ISPs in Zambia using the Zesco infrastructure. The regulator said the unlicensed international transit operators included PCCW Global, Telecom Namibia, Wananchi Telecom, West Indian Ocean Cable Company (WIOCC) and Gilat Satcom. The authority has already issued fines against Zesco, Wananchi Telecom, WIOCC, PCCW Global and Gilat Satcom for violating the law requiring a

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Craig Bernier had only been bagging grain at Harbor Point Minerals in Utica for a few months when the company started sending him inside its silos to “walk down” the grain to help it flow to the bottom.

Bernier, 24, was claustrophobic and hated being in the dark, closed structure, but Harbor Point told him he would have to go back in, his father said.

“He told his mother, ‘I don’t want to go to work,” Daniel Bernier recalled. “If he had to, he wanted to quit, he felt so bad. But I always told him, go find a job — have a job before you quit a job. And so he ended up going to work that day anyway.”

On May 11, 2011, the animal feed gave way under Craig’s feet, swallowing him in the grain and suffocating him.

A subsequent investigation by the Occupational Safety and Health Administration cited Harbor Point for 21 violations, including four for knowingly failing to comply with the law or acting with indifference to worker safety. Regulators imposed $155,200 in fines.

“He wasn’t trained for the job,” his father said, “they just made him do it.”

The Berniers sued Harbor Point in a New York state court in 2012. The company paid a $79,000 settlement, according to the family.

Bernier’s death did not disrupt the stream of state subsidies to Harbor Point.

The year he died, the company received $110,028 in tax breaks thanks to its ongoing participation in the state’s Empire Zones program, which at the time was New York’s largest subsidy program, intended to promote investment and job creation in economically distressed areas. Harbor Point received at least an additional $71,593 through the program in the two years following Bernier’s death.

Harbor Point is one of 74 companies in just one sector — involving the farming, manufacturing and distribution of food — that received more than $100 million in state and local subsidies over the past decade despite a recent history of regulatory violations, according to an analysis of data obtained through a joint reporting project by Investigative Post, ProPublica and the Columbia University Graduate School of Journalism.

Such subsidies are a linchpin of New York’s strategy to revive the sluggish upstate economy. New York state and local economic development agencies dished out cash grants, tax breaks, discounted power and other subsidies worth $8.6 billion statewide last fiscal year. That figure has grown under Gov. Andrew Cuomo despite a scandal involving one of the state’s biggest economic development programs — and even though some recipients of the largesse have violated federal safety, environmental, labor or consumer protection rules.

Even with the significant sums of money involved, state economic development authorities and local industrial development agencies do not comprehensively vet companies applying for assistance. By contrast, the economic development agencies of neighboring New Jersey and Connecticut conduct more thorough inquiries. Also, New York law does not prohibit the awarding of subsidies to firms with a history of regulatory violations or provide a mechanism to suspend or claw back subsidies if companies are cited by regulators once the money has started flowing.

Harbor Point Vice President Kevin Crane maintained Bernier’s death was an accident.

“The financial burden from the fines made it harder for us to grow,” he said.

Companies in other sectors have also garnered subsidies despite running afoul of federal regulators.

For example, International Paper’s plant in Ticonderoga was fined $211,000 after a worker died of burns sustained in 2015.

The cement company LaFarge North America incurred $647,211 in penalties from the EPA for violations of the Clean Water and Clean Air Acts between 2012 and 2016 in Ravena, near Albany.

Both companies were fined while receiving benefits — including discounted power, property tax abatements or the use of lower cost municipal bonds — without interruption.

And last March, Gov. Andrew Cuomo announced an award of up to $200,000 to Super Sweep Inc. through the Excelsior program, only to discover through media reports that the company was spun off from a firm that was barred from state projects.

International Paper said in a statement that its “team members remain committed to their own safety and the safety of their coworkers and their community.” A LaFarge North America spokesperson said the company is “committed to full compliance with all environmental regulations.” Super Sweep did not respond to a request for comment.

“I don’t think taxpayers should be rewarding corporate misbehavior. If there is a pattern of wage theft or pollution or discrimination, I think that should disqualify a company,” said Greg LeRoy, executive director of Good Jobs First, a nonprofit that tracks local and state economic subsidies.

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Our analysis tracked subsidies awarded to food companies from seven major state programs and those administered by locally controlled industrial development agencies. It focused on the food industry because it provides a representative cross section of the types of businesses, from manufacturing to retail, that participate in subsidy programs across the state.

It found that, over the past decade, 74 food companies received $108 million in state and local subsidies within three years of being cited for violations of federal health, labor and environmental regulations. Collectively, these companies were fined over $3.1 million by regulators and required to pay $717,853 in back wages.

The analysis considered the enforcement records from 2006 to 2016 of the Environmental Protection Agency, the Food and Drug Administration, the Department of Agriculture, the Department of Labor, and the Occupational and Safety Health Administration. Citations by comparable state agencies were unavailable.

During this period, food companies were certified for $80.3 million in assistance through the Empire Zones program, which is being phased out amid criticism of its ineffectiveness. Its successor, the Excelsior program, has awarded $55.1 million in corporate tax credits to food companies, contingent on them meeting job goals or other objectives.

Locally controlled industrial development agencies provided at least $22 million in tax abatements to food companies, and discount power programs managed by the New York Power Authority have provided discounted electricity with a minimum estimated value of $7.6 million.

Some well-known firms receiving large subsidies — including Wegmans Food Markets and Chobani, the maker of Greek yogurt — rank among those companies most heavily fined by federal regulators, the analysis found.

Development agencies “should look at compliance with various state and federal laws, and if they’re not good citizens, that should be taken into account,” said Brian McMahon, executive director of the New York State Economic Development Council, a lobbying group for local economic development agencies and related service providers.

But a different standard should be applied to companies which incur an occasional violation than to those with a “pattern of major, willful violations,” he said.

“There has to be some common sense,” McMahon added. “There’s not a big company in the county that doesn’t have some OSHA or minor environmental penalty levied against them.”

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A review of state law and the practices of state and local economic development agencies found there’s nothing akin to a complete background check on subsidy recipients to determine whether they have a history of violating federal and state laws intended to protect workers, consumers and the environment.

“Not having a robust vetting system is an invitation for abusing taxpayers funds,” said John Kaehny, executive director of Reinvent Albany, a good government group active in subsidy reform issues.

Officials at Empire State Development, the state’s primary economic development authority, provided only limited comment. A spokesman said the authority “is obligated to administer the program based on the existing law and regulations.”

Unlike in several neighboring states, companies applying for subsidies in New York are not required to disclose regulatory violations or active lawsuits against them. The New York State Consolidated Funding Application for tax breaks doesn’t ask applicants about previous violations or legal actions.

The pre-application for discounted NYPA power also fails to ask about violations. IDA applications for tax incentives can vary between localities but even the recommended application from the New York State Economic Development Council does not ask about a company’s regulatory history.

By contrast, the New Jersey Economic Development Authority’s incentive application contains 11 background questions related to company violations and legal actions. Since 2010, its compliance measures have flagged approximately 250 applicants for closer examination by a development officer and the state attorney general. Of these, about 10 percent were subjected to a debarment analysis that was reviewed by the authority’s board.

The Connecticut Department of Economic Development’s pre-application, while not as thorough as New Jersey’s, does ask about citations from the EPA and OSHA, as well as any litigation against the applicant. Officials perform additional checks on their own.

Laws governing the current major economic development programs in New York only require a company to certify that it is in “substantial compliance” with all environmental, worker protection, and local, state and federal tax laws before tax incentives are awarded. But New York’s laws and regulations governing subsidy programs do not outline how an agency should determine whether a company is in compliance or what “substantial compliance” means in practice.

It’s unclear what economic development agencies in New York do to determine the “substantial compliance” spelled out in the law. Jason Conwall, an Empire State Development spokesman, said in an email statement that the state considers a company to be in compliance if it has no outstanding fines levied against it by regulators. Thus, a history of violations would not be held against a company if it had paid its fines.

Violations are not considered when companies are admitted to Empire State Development programs, Conwall said, although checks are made if and when they qualify to receive tax credits under the Excelsior program.

Practices vary among other economic development agencies, including the New York Power Authority and assorted IDAs. Their research at its most stringent involves checks of online databases maintained by federal regulators and, in some instances, inquiries to selected state agencies.

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New York’s economic development agencies are not alone in failing to vigorously vet companies with a history of regulatory violations.

“It’s not common for economic development agencies to pay attention to these issues. Some do, but it is far from a widespread practice,” said Phil Mattera, research director at Good Jobs First.

There are, however, examples of agencies in New York that screen companies doing business with the government and hold them accountable for regulatory violations.

Kaehny, of Reinvent Albany, questioned why the state doesn’t have a process comparable to the Vendex system used by New York City to vet vendors, including companies awarded subsidies through its economic development agencies.

“You have to disclose your ownership, any legal or regulatory violations you’ve had, prior contracts — basically everything about you as a business. The state should have at least as good of a system as New York City’s,” he said.

In addition, the state Department of Labor imposes consequences for contractors cited for significant violations of labor law. Firms can be barred from receiving state contracts for up to five years.

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Subsidy programs have benefitted several well-known companies that have a history of significant regulatory violations.

Wegmans Food Markets, founded in Rochester, is considered among the best grocery chains in the nation, and consistently ranks among the best companies to work for in America. The privately held company has gained influence beyond the grocery business, with the governor appointing CEO Danny Wegman as co-chair of the Finger Lakes Regional Economic Development Council.

The company operates 46 stores in Western and Central New York and received $4.8 million in subsidies between 2009 and 2014, primarily tax abatements from five IDAs. Only four companies in the food industry statewide received more assistance, based on data obtained for this analysis.

Wegmans received the subsidies even though it had been hit with $561,855 in fines — more than any company in the state’s food industry included in this analysis. The fines, mostly related to OSHA violations, were later reduced to $416,915. OSHA usually reduces fines on appeal based on factors that include the company’s size and efforts to address violations.

Most of the fines imposed by OSHA were for safety violations at its corporate bakery and distribution center in Rochester. In 2011, the company was cited for serious and repeated safety violations of its machine maintenance procedures. In March 2015, a worker lost the tip of his finger to a conveyor belt and another suffered a first-degree burn from a steam valve. That December, a woman’s hand and arm were pulled into a conveyor belt and crushed.

The safety violations continue. Another Wegmans supermarket in Rochester was fined $24,942 for its handling of woodworking machinery and flammable liquids in January of this year. (These violations were not included in the data analysis involving fines and subsidies from 2006-16.)

Wegmans officials declined to comment.

The governor thinks highly enough of Chobani Inc. that he made Greek yogurt the official state snack in 2014. A year later, Cuomo included the company’s founder and CEO Hamdi Ulukaya in his entourage that visited Cuba on a trade mission.

Only one food company received more in subsidies between 2006 and 2016 than the $17.7 million that went to Chobani, which is headquartered in Chenango County, northeast of Binghamton. Its $269,000 in federal regulatory fines ranked third highest in the industry; the fines were later reduced to $206,900.

In 2011, the company was fined $75,000 by the EPA. That year and again in 2012, the company was awarded $11.2 million in benefits through the Empire Zone program and $4.2 million from local IDAs. The company was also fined $194,000 by OSHA in 2012. The Excelsior program later issued $696,915 in tax credits to Chobani in 2012 and 2013.

“Chobani’s early days were marked by extraordinary demand and extraordinary growth,” a company spokesman said in an emailed statement. “In instances where errors or mistakes occurred, the company took every possible action to address them and [is] working closely with state agencies to drive improvements that often exceeded their requirements.”

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Nature’s Bounty is headquartered in Long Island with operations on four continents and some 13,000 employees. The company manufactures, markets and sells a wide range of health products, including vitamins and dietary supplements. The company was publicly traded until it was bought in 2010 by the Carlyle Group, a private equity firm, for $4 billion.

Nature’s Bounty is no stranger to federal regulators — or state economic development officials.

In 2004, the Department of Labor cited Nature’s Bounty for 702 violations of the Fair Labor Standards Act and ordered it to pay $122,380 in back wages for overtime pay. The company was not fined.

Two years later, the Islip Industrial Development Agency approved the last of three tax abatement deals with the company. When asked about the 2004 labor violations, William Mannix, the administrative director of the Islip IDA responded: “All I can say is that we were unaware of it.”

OSHA imposed fines on Nature’s Bounty of $144,025, which were later reduced to $81,675, mostly for machine operation hazards between 2007 and 2015. Throughout this period, the state power authority and local IDAs awarded the company $3.5 million in tax breaks and discounted electricity.

In October of 2010, for example, OSHA imposed $111,000 in fines for violations that exposed workers to dangers when servicing machinery. Two months later, the Federal Trade Commission ordered the company and its subsidiaries to repay $2.1 million to customers for false claims about its Disney-themed children’s vitamins. Nevertheless, the next year, the Town of Babylon’s IDA approved a package of sales and property tax abatements worth $264,209 over the first four years of the agreement.

More recently, in May of 2015, an employee at Nature’s Bounty was hospitalized for severe lacerations sustained to her right hand while cleaning machinery.

Nature’s Bounty officials declined to comment.

Mannix, in an emailed statement, said the company “consistently met and exceeded their hiring goals related to their multiple Islip IDA projects.”

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Awarding subsidies after regulators cite a company for violations leaves the state open to criticism for supporting questionable practices. Take, for example, Zemco Industries, owned by Tyson Foods.

In August of 2010, Tyson recalled 380,000 pounds of deli meat produced at its plant in Buffalo. Within two months, the U.S. Department of Agriculture suspended the plant’s operation, putting 480 people out of work for 10 days. That year, Tyson received $115,712 in tax exemptions from the Erie County IDA.

Food recalls and OSHA violations continued after the processing plant resumed operations. In 2013, OSHA fined the company $121,720 after determining Tyson was exposing workers to safety hazards. The fines were later reduced. The following year, Tyson recalled another 106,800 pounds of meat due to misbranding and an undeclared allergen.

Tyson’s public relations manager Caroline Ahn said in an emailed statement: “There is no connection between financial incentives from the state of New York and our product recall/OSHA citation.”

From 2010 to 2014, the company received over $409,534 in tax abatements from the Erie County IDA and 4,500 kilowatts of discounted electricity of an undetermined value from the state power authority.

Tyson closed the plant in July 2014, eliminating 300 jobs.

“I’m sure Tyson didn’t want to have a listeria breakout, that was probably the last thing that they wanted to have happen,” said David Friedfel, director of state studies for the Citizens Budget Commission.

“That’s something that happens in private business, and it’s something that the state should try to insulate itself from as far as economic development spending.”

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It’s been nearly six years since Craig Bernier died on the job at Harbor Point Minerals, a privately owned company that makes and sells animal feed.

Investigators concluded Bernier was not given adequate training or required safety equipment and the grain elevator was left running while he was inside so seed could continue to flow out the bottom.

The OSHA report on the incident said there was reason to believe company officials were aware of the dangers.

After making changes to prevent future accidents, the company’s penalty was reduced to $124,000. Crane said state economic development officials did not contact him following the accident or the OSHA fines, both of which were reported by local media. Instead, the subsidies kept coming.

Berniers’ parents said businesses that receive incentives should be held accountable.

“As for them getting the money, I don’t believe they should’ve. Why should they get a slap on their hands then get something good behind it?” asked Daniel Bernier.

Sean Campbell is a student at the Columbia University Graduate School of Journalism with a specialization in data. His Twitter address is @Sean_Kev.

Investigative Post and The Times Union of Albany are co-publishing the New York Subsidies series in its entirety. You can read other articles at investigativepost.org and timesunion.com.

If you are interested in viewing the raw program data for our New York State Subsidy Tracker app, please visit the ProPublica Data Store.

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TOKYO —

Moves by Japan’s major corporations to reduce overtime work are still coming slowly, with only one in four companies saying they plan to introduce a cap, a recent Kyodo News survey showed.

In the survey of 104 companies’ employees and hiring plans, 98 firms said they have a labor-management agreement to allow workers to work beyond the upper limits they set.

Long working hours have drawn renewed attention in Japan after the suicide of an overworked employee of Dentsu Inc in late 2015 and a consequent labor bureau crackdown on the major advertising group came as a fresh reminder of the country’s notorious ethos of overwork as well as on the shrinking working population.

Of those 98 firms, 40 said their cap on monthly overtime work is set above 80 hours, a level said to cause serious health consequences. Some 12 companies allowed overtime of 100 hours or longer per month, with the longest being 135 hours, according to the survey conducted between late February and mid-March.

Some 24 companies said they will lower the cap while 20 said they have no plan to review their work hour cap, suggesting a large portion of the surveyed firms are cautious about changing their overtime rules before the government finalizes its labor law reform to change the country’s deep-rooted culture of working long hours.

Of the surveyed firms including such major corporations as Sony Corp, Takeda Pharmaceutical Co, Toyota Motor Corp and Mitsubishi UFJ Financial Group Inc, 99 said they are taking measures to reduce their employees’ working hours, although 31 said the government’s labor reform could negatively affect their business.

Companies in Japan are under pressure to improve working conditions for their employees also out of need to attract talent amid the shrinking population.

A government study has shown that the country’s working population in the age group of between 15 and 24 years is set to drop to 4.85 million in 2030 from 9.00 million in 1994.

Among 78 firms which have already made their hiring plans for the business year starting in April 2018, 21, or 27%, said they plan to recruit more new graduates than they have for the upcoming business year starting April 1.

In the previous survey a year ago, 24% said they would increase their hiring of new graduates for the year beginning next month.

The companies hoping to hire more new graduates in 2018 include Canon Inc, Kyocera Corp and door-to-door parcel delivery provider Yamato Holdings Co whose unpaid overtime wages and review of labor-management contract have become a high-profile social topic highlighting labor shortages particularly in service industries.

© KYODO

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NEW DELHI: India has offered to waive interest liability in a fresh attempt to settle income tax cases such as those involving Cairn India and Vodafone plc, provided the principal amount is paid.

The Central Board of Direct Taxes has issued a circular for waiver of interest in disputed tax demand in different scenarios, including the cases arising due to the controversial amendment to the law with retrospective effect.

In cases where tax liability arose because of retrospective amendment to the law or a court ruling, the interest payable on the demand will be waived, it said.

“However, no reduction or waiver of such interest shall be ordered unless the principal demand… stands fully paid or satisfactory arrangements for payment of the principal demand have been made,” CBDT said in its guidelines to chief commissioner of Income Tax and director general of Income Tax.

The guidelines come weeks after the Direct Tax Dispute Resolution Scheme announced by Finance Minister Arun Jaitley in the budget last year closed on January 31.

The scheme promised to waive interest and penalty if the principal amount involved in retrospective tax cases is paid and all appeals against the government challenging constitutional validity of back-dated amendment to income tax laws are withdrawn.

Neither Vodafone nor Cairn India came forward to settle dues under the scheme. Vodafone International Holdings BV, Vodafone plc, Nokia Oyj, Cairn Energy plc and Vedanata Resources plc have already send notices to the government under the Bilateral Investment Protection and Promotion Agreements India has entered into with other countries, raising the validity of tax demand by India.

The tax department had in October 2010 imposed a tax liability including interest of Rs 11,218 crore on Vodafone International Holdings BV (VIHBV) for its $11billion acquisition of Hong Kong-based Hutchison Whampoa’s 67% stake in India mobile phone business in 2007.

In January 2012 the Supreme Court set aside the order, but the government amended the act retrospectively to validate the demand. A fresh tax notice was issued to the company in January 2013.

The tax department asked UK’s Cairn Energy plc to pay Rs 10,247 crore in principal due for the capital gain it made in 2006 when it transferred its India business to a new subsidiary, Cairn India, and listed it on stock exchanges. Income tax appellate tribunal this month upheld the `10,247 crore capital gains tax on Cairn Energy plc.

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