Wages

U.S. Senate – Legislation was introduced to provide a tax deduction for overtime pay. The overtime tax break would be capped at $10,000 for individuals and $20,000 for married couples and it includes income limits. The legislation could be included in President Trump’s “big, beautiful” tax-and-spending bill that Republican lawmakers are assembling. Proposed language would limit the overtime-pay break to people who get at least 1.5 times their normal pay rate, either under the Fair Labor Standards Act or an agreement with their employer. The break would be an above-the-line income tax deduction. That means workers can claim it whether they itemize deductions or take the standard deduction. They would still pay payroll taxes on the income. More details.

Florida – Legislation that would allow employers to pay below the minimum wage for employees involved in a “work-study, internship, pre-apprenticeship, or other similar work-based learning opportunity” died with the adjournment of the session. Under current law, employers in Florida are already allowed to pay sub-minimum wages to certain workers, such as people ages 19 and younger during the first 90 days of employment and to students working part-time in vocational training programs. More details.

Los Angeles, CA – A city council committee advanced a proposal that would increase the minimum wage for hotel and airport workers, with the goal of providing them $30/hr by 2028. Under the plan, hotel and airport workers would receive $22.50/hr beginning in July, followed by a $2.50/hr increase in each of the following three years. The workers would earn $25/hr in 2026, $27.50/hr in 2027 and $30/hr in 2028 when the Olympic and Paralympic Games arrive in the L.A. region. Employers would also be required to provide a new $8.35/hr payment to cover health care, but the committee agreed to push that requirement to Jan. 1, 2026, instead of July when the first wage hike would begin. The city is expected to establish a public housekeeping training requirement as well, similar to policies in Santa Monica and West Hollywood, but it would only affect hotels with more than 60 rooms. More details.

Washington, D.C. – Mayor Muriel Bowser unveiled her 2026 budget plans which includes a provision that would repeal Initiative 82, the voter-approved law that is phasing out the tipped minimum wage. District voters passed the measure with 74 percent of the vote in 2022, when the minimum wage for tipped workers was $5.35/hr. The measure incrementally increases the tipped wage until it’s on par with the full minimum wage in 2027. It’s currently $10/hr. Instead of the base wage for servers, bartenders, and other tipped workers increasing to $12/hr in July, the Mayor’s proposal would revert the wage back to about half that. The D.C. Council repealed a similar ballot initiative in 2018, but D.C. Council Chairman Phil Mendelson says a repeal may not have the support of council members this time around. More details.

DoorDash – This week, dozens of drivers were on Capitol Hill lobbying members to include independent contractors in pending legislation to eliminate income tax on tipped income. The existing No Tax on Tips legislation excludes independent contractors. The bill currently is estimated to cost around $200 billion over 10 years and the inclusion of independent contractors would significantly increase that price tag. More details.

Labor Policy

Labor Department – The agency announced that it will no longer enforce a 2024 Biden-era independent contractor rule under the Fair Labor Standards Act (FLSA). While this announcement does not formally rescind the Biden-era rule, the agency explained that it will be reconsidering the rule, and it is virtually certain that they will dramatically change or replace the rule when its review is completed. While their review and reconsideration of the rule continues, the Field Assistance Bulletin notes that, effective May 1, 2025, the DOL will enforce the FLSA in accordance with Fact Sheet #13 (from July 2008, not March 2024). More details.

Cleveland, OH – The city council passed an emergency pay transparency ordinance to address pay disparities based on gender and race. Under the new rules covered employers must provide the salary range or scale in job postings and must not inquire about a job applicant’s current or prior salary. The ordinance will take effect in early Nov. pending the mayor’s expected signature. The specific effective date will be six months from the signing date. The ordinance applies to private employers (as well as units of the city and certain employment agencies) that employ 15 or more persons within the city. Covered employers will be prohibited from inquiring about the salary history of an applicant and screening an applicant based on their current or prior salary history, including requiring that an applicant’s prior salary history satisfy minimum or maximum criteria. Additionally, employers will be required to provide the salary range or scale for potential employment in the notification, advertisement, or other formal posting that offers the opportunity to apply for employment. More details.

Washington, D.C. – U.S. Immigration and Customs Enforcement Homeland Security Investigations agents visited more than 100 businesses in the Washington, D.C. area, including a number of high-profile restaurants. The agency said it was part of a broad effort to conduct “worksite enforcement across the nation to ensure businesses are following U.S. immigration and employment laws.” No arrests were made. Federal law enforcement officials visited dozens of restaurants, carry-out spots, and bars across several neighborhoods in D.C., including U Street, 14th Street, Chinatown, Dupont Circle, and Mount Vernon Triangle. The visits spanned a wide range of establishments, from fast-casual spots to fine-dining restaurants and luxury cocktail bars, reflecting the breadth of the operation. At many restaurants, agents distributed information and pamphlets requesting to see I-9 forms to verify the identities and employment authorizations for all employees dating back one year and some restaurants were told federal officials would return in three days. A coalition of activists had warned delivery drivers and restaurants of the planned enforcement the day before they began. More details.

Misc.

South Carolina – Just prior to the close of session, statehouse negotiators reached an agreement on a liquor liability insurance reform package offering the state’s hospitality and food and beverage industry increased protection from joint and several liability lawsuits. The new language essentially creates a tailor-made joint and several liability reform law specific to bars and taverns. Per the bill, bars and restaurants would be liable for only up to 50 percent of a plaintiff’s actual damages in drunk driving cases and would only pay damages commensurate to their percentage of fault. It mandates reduced insurance coverage requirements for venues where alcohol makes up less than 40 percent of sales and requires training for bartenders and servers, with reductions in required insurance coverage amounts for bars that comply. The governor is expected to sign. More details.

Key Takeaways

• The issue of Universal Basic Income has recently resurfaced in the national conversation as a tool to alleviate poverty. The concept of basic income programs took off following a 2019 experiment in Stockton, CA. where 125 individuals received $500 per month for two years, which researchers found improved their financial stability and health. While dozens of basic income pilot projects have since been pursued in cities across the country, the issue has largely remained a local one. Last week, more than 20 Democratic lawmakers from 17 states launched Legislators for a Guaranteed Income to advocate for statewide programs that provide direct, regular cash payments to lower-income residents. Their new group joins an existing network of almost 250 mayors and county officials – Mayors for a Guaranteed Income – pursuing these policies. So far this year, 25 such bills have been introduced in 11 states. If real momentum gets behind this approach, it will bring additional energy to the ongoing conversation around low-wage jobs, the working poor, and ultimately, their employers.

• A new research paper out of Indiana University Law School is generating some buzz among labor community activists. It argues that the current Administration efforts to either disassemble or neutralize both the National Labor Relations Act and the National Labor Relations Board could be a boon to union organizing. Per the authors, “the dismantling of the National Labor Relations Act could create a viable approach for the rebirth of the labor movement because it creates the conditions for strife, disruption, and a new labor insurgency that organizers can channel toward seeking state and local collective bargaining laws.” They argue that a perceived lack of federal worker protection could likely be a spark to reinvigorate the labor movement and also that if a federal apparatus is deemed unconstitutional by the current Supreme Court, nothing would then preclude states from taking action.

Podcast

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