Hawaii – Legislation to eliminate the tip credit by 2028 was deferred and appears to be dead for the year. Hawaii has a minimal tip credit and their current minimum wage is $14/hr with a server wage of $12.75/hr. A similar measure failed last year as well. More details.
Kansas – The governor signed a bill to eliminate subminimum wages for disabled employees in the state. Under Section 14(c) of the Fair Labor Standards Act, companies and businesses can apply for 14(c) certificates that allow them to pay disabled employees below the state or federal minimum wage. The new law makes Kansas the 16th state to eliminate subminimum wages for disabled workers. More details.
Maryland – Legislation that would eliminate the tip credit by 2027 was withdrawn. The bill sponsor has indicated that he will refile the bill as a constitutional amendment that, if approved by a supermajority of the legislature, would appear on the 2024 ballot. Proponents have had a difficult time earning support and late-filed legislation (such as this) faces significant procedural hurdles in addition to earning supermajority support. The original bill also included a provision requiring the state labor commissioner to establish the High Road Kitchen Program as a recognition program for restaurants that have voluntarily opted to not utilize the tip credit. This is a program that is oft-promoted by One Fair Wage. Similar legislation was defeated last year. More details.
Virginia – House-passed legislation to incrementally increase the minimum wage to $15/hr by 2026 advanced out of the senate on a 51-49 party line vote and is headed to the governor’s desk. It is unlikely – but as yet unclear – that the governor will sign the bill. At a recent event, the governor indicated that he is unlikely to support the measure saying, “market forces are working.” More details.
Renton, WA – Voters passed a measure to raise the minimum wage to 19/hr by July 2024. In Dec., the city council defeated the same proposal. The vote was taken in an effort to head off the ballot measure that had previously been approved for the Feb. ballot. The measure won with nearly 60 percent of the vote. More details.
New Jersey – Legislation expanding the state’s existing paid leave program advanced out of the assembly and is headed to the senate. Currently, the law applies to employers with 30 or more workers. Under this legislation, the threshold would drop to 20 immediately upon the signing of the law, drop to ten employees a year after that, and then down to 5 employees another year later. The bill leaves untouched current provisions that employees must have worked at least 20 weeks, earning no less than $283 weekly, or earn at least $14,200 in the first four of the five quarters preceding their benefits claim. More details.
New Mexico – Legislation that would provide up to 12 weeks of paid family and medical leave for care of newborns or spouses, and relatives facing serious medical conditions was defeated in the assembly. If passed, the program would have exempted employers with fewer than five employees, as well as those who offer similar or better self-funded benefits packages that don’t wish to participate. Similar bills have failed in previous sessions. But, this year’s version included a number of changes, such as expanding potential beneficiaries to include relatives of military members on active duty or who are about to be called to active duty, adding a requirement for an actuarial consultant to analyze how the program is working, and capping employee contributions at the same level as Social Security. This was a major setback for the governor. More details.
South Carolina – The house unanimously passed legislation that would allow but not require paid leave insurance products to cover at least two weeks of paid time off for workers who need to care for family members, including newborn children. The measure authorizes life and disability insurers to create the policies, and the insurers would be subject to a 1.25% tax on total premiums written. A companion bill is working its way through the senate. The state becomes the latest to adopt a private market solution to the paid leave issue. More details.
Michigan – The state’s new law repealing its right-to-work status took effect this week. As such, it will no longer be illegal in Michigan for collective bargaining agreements in the private sector to contain union security clauses mandating all bargaining unit employees pay dues as a condition of employment. Last year, Michigan became the first state in over sixty years to repeal a right-to-work law. More details.
Colorado – One Fair Wage held a launch event this week and announced plans to introduce tip credit elimination legislation. Legislators worked as servers at the event. Colorado’s current minimum wage is $14.42/hr and the server wage is $11.40/hr. The $3.02/hr tip credit is frozen. More details.
One Fair Wage – The chairman of the U.S. House Committee on Oversight & Accountability James Comer (R-KY) sent a letter to IRS Commissioner Daniel Werfel directing the agency to turn over all correspondence with One Fair Wage (OFW), the labor group working to eliminate the tip credit. The letter is part of a larger Congressional investigation into claims the labor group is getting illegally favorable tax treatment. Under federal law, 501(c)(3) nonprofits are under strong lobbying limitations when engaging in political advocacy but OFW has been blatantly highlighting their lobbying activities as well as organizing ballot initiatives across the country. It is unclear whether the agency will comply in a timely manner. More details.
Starbucks – The Strategic Organizing Center, a labor union coalition, is calling on the company to fully disclose the cost of its “aggressive opposition” to employee organizing. It estimated the cost to be at least $240 million. The SOC submitted a letter to the Securities and Exchange Commission criticizing what it calls a failure by Starbucks to appropriately inform shareholders of the legal and liability costs of its anti-union crackdown. Starbucks has repeatedly denied wrongdoing and has said that it adheres to labor law while opposing employees’ unionization. It has also previously pointed to an outside review it commissioned released in December that found no evidence of an “anti-union playbook.” More details.
Trader Joe’s – Last month, a federal judge threw out the company’s claims that the union, Trader Joe’s United, had violated its trademarks with the union’s name and logo. The judge went so far as to say that the company’s attorneys nearly deserved sanctions for even filing the lawsuit. This week, the company filed an appeal in hopes of keeping the lawsuit alive. The company is trying to force the union to stop selling merchandise like tote bags, t-shirts, and mugs that have the name Trader Joe’s United on them. This is the latest salvo in a feud that is potentially re-branding Trader Joe’s reputation as an employer. More details.
Uber / DoorDash – Thousands of Uber, Lyft and DoorDash drivers turned off their apps on Valentine’s Day demanding better pay and working conditions. The organizers said its members did not accept rides to or from airports in 10 cities including Austin, Chicago, Hartford, Miami, Newark, Orlando, Philadelphia, Pittsburgh, Providence, and Tampa. More details.
- House Republicans’ scrutiny of One Fair Wage this week provides ammunition for those questioning the credibility of the industry’s most vocal opponent. One Fair Wage, like its predecessor the Restaurant Opportunities Center, has often played fast and loose with facts, mischaracterized the industry, and operated as 501c3 in a questionable way (at least, according to the Oversight Committee). Brands and industry associations should work to ensure policy makers at all levels of government are aware of this development and are questioning any association with One Fair Wage.
- The restaurant industry’s unrealized potential to be a major political force was on full display in Annapolis this week. Legislators supporting a proposal to eliminate the tip credit backed down in the face of fierce opposition from servers, organized by the state restaurant association. The bill sponsor even noted that One Fair Wage’s weak turnout put him in an impossible position to earn support. The lesson here is that a vigorous grassroots effort levels the playing field and gives the industry a fighting chance to win and secondly, that no jurisdiction is too labor-friendly in which the industry can’t compete politically if they turn out.
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