Wages

State Minimum Wage Rates – On July 1, minimum wage rates will increase in numerous states and localities throughout the country including Washington, Oregon, Alaska, California, Chicago, Washington, DC, and over a dozen cities in California. A list can be found here.

Chicago, IL – Mayor Brandon Johnson joined One Fair Wage at a local restaurant to celebrate an increase in the server wage as of July 1. Tipped workers will see a hike in their hourly wage, from $11.02/hr to $12.62/hr. This is the second step up since the law was passed by the city council in 2023. The tip credit will be fully eliminated by 2028. There is currently a proposal before the city council to pause any future increases in the server wage (similar to a proposal under consideration in Washington, DC), but it is unlikely to move. More details.

New York City – The Taxi and Limousine Commission (TLC) approved a 1 percent pay hike for rideshare drivers on top of the 4 percent increase approved in March. The more contentious issue addressed by the commission was a new rule adopted by the TLC that prevents “lockouts.” The issue is somewhat similar to the just-in-time scheduling issue in the retail sector. “Lockouts” are when rideshare platforms like Uber and Lyft arbitrarily kick drivers off the platform in the middle of their workday, sometimes for hours at a time to control compensation paid to a particular driver. Under the rule passed this week, the apps are required to notify drivers of any planned lockouts 72 hours in advance. Further, the rules prohibit any lockouts within 16 hours of a driver logging on to the app. Rideshare companies will be fined $500 for any illegal lockout. More details.

San Diego, CA – A city council committee unanimously advanced to the full council a proposal for a $25/hr minimum wage for workers at amusement parks, event centers, and zoos, as well as hotels with at least 150 guest rooms. It requires two public meetings and the mayor’s signature for approval, and barring any changes, it would take effect Jan. 1 of 2026. Los Angeles just enacted a $30/hr minimum wage for a similar subset of workers, and the business community is working to place a referendum on the ballot to repeal it. The San Diego business community has threatened a similar ballot measure if the proposed wage is enacted. More details.

Independent Restaurant Coalition – The Independent Restaurant Coalition (IRC) announced this week that it opposes the “no tax on tips” proposal under consideration in Washington, DC. The organization, which gained prominence advocating for COVID relief funding, has struggled to find its voice on other issues. The “no tax on tips” concept has earned broad bipartisan support from lawmakers, as well as support from union officials, since its announcement. The IRC, the James Beard Foundation, and a handful of labor groups like One Fair Wage have opposed it in recent months, citing its potential impacts to other programs like Medicaid or its lack of inclusion of back-of-the-house workers. Their opposition to this issue puts them out-of-step with the attitudes of most tipped workers, as well as the general public. More details.

Labor Policy

Labor Department – This week, Labor Secretary Lori Chaves-DeRemer told a meeting of western governors that work visas for specialty occupations such as temporary workers in agriculture, hospitality, landscaping, and construction “are very important to a lot of your respective states and our rural communities.” She went on to say that the Trump administration is planning to make it easier for employers to hire temporary migrant workers and due to the backlog of temporary work visa applications, she is establishing “an emergency agency,” the Office of Immigration Policy, within her office to process the work permits “on the spot.” More details.

New York – Legislation is on its way to the governor that would amend the New York Labor Relations Act to expand the jurisdiction of the Public Employment Relations Board (“PERB”) to essentially step into the role of the National Labor Relations Board (“NLRB” or “Board”) for private-sector employers. If signed into law, the “NLRB Trigger Bill” would permit PERB to certify representation elections and adjudicate unfair labor proactive charges if the NLRB does not “successfully assert” jurisdiction. Without a functioning quorum at the NLRB, it may not be legally possible to assert jurisdiction. This would most likely invite a court challenge on the grounds of federal preemption. The governor has until the end of the year to sign or veto the bill. More details.

Labor Activism

Tacoma, WA – Organizers with the United Food and Commercial Workers Local Union 367 and the Tacoma Democratic Socialists of America submitted signatures for a ballot initiative that could establish a “Worker’s Bill of Rights.” The two groups started the process of getting the initiative on the ballot in Feb., when they submitted a proposal to increase protections for workers in Tacoma with new policies like a $20/hr minimum wage. The signatures now have to be certified by the city clerk. More details.

McDonald’s – From June 24-30, the company will be the subject of a boycott by the Peoples Union USA, “a grassroots movement focused on economic resistance, corporate accountability, and real justice for the working class.” Since Feb., the group has orchestrated boycotts of Amazon, Walmart and Target, as well as periodic “economic blackouts,” during which it says Americans should “avoid shopping, streaming, online orders, fast food, and everything in between,” and rely exclusively on small, local businesses. Earlier this year, the group published a list of core grievances with each targeted company on its website, largely centered around tax avoidance, conditions of workers, and general monopolistic practices. McDonald’s was included in the list for “tax avoidance and known lobbying against wage increases,” issues that have in recent years resulted in significant criticism of the company, as well as legal consequences. The company announced in 2019 that it would no longer oppose wage increases. Another boycott of the company is planned for Aug. More details.

Food Policy

Texas -The governor signed legislation that requires warning labels on food products that contain additives, chemicals, or ingredients “banned in other countries” and establishes a committee – the Texas Nutrition Advisory Committee – to develop nutritional guidelines, examine the impact of nutrition on health, and provide education on ultra-processed foods. The industry was successful in passing significant amendments including one that removed aspartame, high fructose corn syrup, potassium sorbate, saccharine, artificial vanilla, and other agricultural products from the list of ingredients covered under the bill. Additionally, another amendment preempts the labeling requirement if the product is already regulated by the USDA Food Safety & Inspection Service. More details.

Key Takeaways

• New York City held its Democratic primary election for mayor and to the surprise of most observers, a young progressive newcomer named Zohran Mamdani solidly beat the prohibitive favorite, former Governor Andrew Cuomo. His message was a mix of far-left policy proposals including rent control, city-owned grocery stores, and a $30/hr minimum wage by 2030 but interlaced with proposals regarding cutting red tape for new and existing business owners and encouraging startups. The campaign was a classic, progressive grassroots effort going door-to-door and tapping into a great deal of voter angst. While this was only a primary in one blue city and Cuomo could reenter the race as an independent, national Democrats are assessing what elements of Mamdani’s approach should, or could be, a blueprint going forward for a party searching for political relevance across the country.

• The Independent Restaurant Coalition’s (IRC) positioning on the concept of “no tax on tips” is worth the industry’s attention. In its statement, the IRC advocates against the proposal for a few reasons. Primarily, it argues that it’s not equitable for back-of-the-house employees, which aligns with messaging that has come from the Restaurant Opportunities Center and One Fair Wage for years. The IRC goes further to make the point that it works against an industry movement toward service fees and may disincentivize highly compensated frontline workers from matriculating into management. These are all fair points and issues that the industry has wrestled with for some time, and likely will continue to wrestle with for many years to come. And, there are potential solutions for those issues in addition to the “no tax on tips” proposal. At the end of the day, it’s almost impossible to imagine any restaurant owner / manager standing in front of their tipped employees and telling them, “You’re on the verge of getting thousands of additional dollars this year, and for the next few years, and I’m lobbying to stop it and here’s why…” The IRC’s position on this issue is wildly misaligned with the workforce it purports to represent and as such, should ensure that the organization remains a fringe player.

Podcast

Check out our Working Lunch podcast each week that includes further analysis into these legislative issues, policy, politics and much more. You can find Working Lunch on the Restaurant Business online website, SoundCloud, iTunes and Spotify.