Wages

Connecticut – The governor announced that the state’s minimum wage will rise to $15.69/hr in Jan. under the first annual adjustment required by a 2019 law tying the wage to the employment cost index. Lawmakers voted to gradually increase the minimum wage from $10.10/hr in 2019 to $15/hr as of June, but they also approved increasing the rate every year based on the ECI. Connecticut’s current server wage of $6.38/hr for wait staff and $8.23/hr for bartenders will increase by an equivalent 4.6 percent rate. More details.

Florida – The state’s minimum wage will increase Sept. 30 to $12/hr. The minimum wage is set to increase annually by $1/hr until it reaches $15/hr by 2026. The server wage will increase from $7.98/hr to $8.98/hr. The $15/hr wage rate was approved by 61 percent of Florida voters via a 2020 ballot initiative. More details.

Montgomery County, MD – Legislation was introduced in the county council that would eliminate the tip credit by raising the server wage annually until it is in line with the current $15/hr county minimum wage by July 1, 2028. Montgomery County was the first jurisdiction in Maryland to vote to raise the minimum wage to $15/hr in 2017, following the District of Columbia which did so a year earlier. The county is again seeking to follow D.C. where last year, voters chose to eliminate the tip credit. The bill would also ensure that the change does not inadvertently increase a restaurant’s rent (which could happen in leases where rent payments are tied to a percentage of sales). A companion bill was also introduced which would require owners to be transparent about service charges, explaining to patrons how owners are spending dollars from those fees. The tip credit elimination bill is scheduled to be debated in a public hearing Oct. 10. More details.

Prince George’s County, MD – Mimicking neighboring Montgomery County, county council member Edward Burroughs announced he will introduce legislation this session to phase out the tipped minimum wage, acknowledging however, a tough road to passage. No hearing has been scheduled. In June, county leaders and One Fair Wage, in partnership with Capitol One bank, announced a new grant program called “Keep Restaurant Workers in Prince George’s County,” and aims to help local restaurateurs phase out the tipped minimum wage. An estimated 20 to 30 establishments will receive a grant valued between $5,000 to $7,500 each and while the money is not expected to pay the workers’ full wages, it will “help restaurateurs transition to the new model.” More details.

Chicago, IL – The city council’s Committee on Workforce Development advanced a proposal to phase out the minimum wage for tipped workers (currently $9.48/hr) over five years. Under the plan, businesses would be required to increase tipped workers’ wages by 8 percent annually until they’re paid the same minimum wage as other employees in the city ($15.80/hr). Workers could still accept additional tips. The proposed ordinance was revised in a deal hammered out between Mayor Brandon Johnson, aldermen and the Illinois Restaurant Association (IRA) and is expected to be approved by the city council. More details.

Long Beach, CA – The city council approved placing a proposed minimum wage measure on the March 2024 ballot that would set a $23/hr wage level for hotel workers with progressive increases over the next five years. If approved by voters, the measure would amend a previous ballot initiative approved by voters in 2012. The measure would only apply to hotels with 100 or more guest rooms but hotel operators are allowed to opt out if they enter into a negotiated union contract with different terms than those laid out in Long Beach’s proposed ballot measure. The ballot measure, if approved, would also give the city council future authority to make changes to the proposal – including changes to the wage schedule after the voter-approved five year schedule takes effect – without voter approval. More details.

Bank of America – The company announced that it will raise its minimum hourly pay rate to $23/hr next month. Two years ago, the Charlotte-based bank said it planned to increase the minimum hourly wage in the U.S. to $25/hr by 2025. The company has raised the minimum hourly wage five times recently – to $15/hr in 2017, $17/hr in 2019, $20/hr in 2020, $21/hr in 2021 and $22/hr last year. With the latest increase, hourly full-time employee base pay is nearly $48,000 a year. More details.

Labor Policy

Labor Department – The Government Accountability Office (GAO) determined that Acting Secretary of Labor Julie Su can remain in the position as “acting” secretary for as long as President Biden wants her to stay. Essentially, the GAO said the specific Labor Department provision that allows the deputy secretary – which Su was – to step into the role takes precedence over the more general government-wide Vacancies Act, which typically limits “acting” positions to about 210 days. Su was nominated to be the new Secretary of Labor in late February when her predecessor Marty Walsh left the job to take over the NHL players union; she has been serving as “acting” secretary ever since. GAO opened the review in July in response to a request from House Education and the Workforce Chair Rep. Virginia Foxx (R-N.C.), one of the most vocal critics of Su and the Biden administration’s labor agenda. More details.

Montgomery County, MD – The same councilmember sponsoring legislation to eliminate the tip credit also introduced FAST Act-like legislation. The bill seeks to establish a wage commission to study chain restaurants with 30 or more establishments nationally. It will report recommendations to the county council regarding wages and working conditions. This commission would consist of seven members, including two representatives of organized labor, two representatives of industry, two members of the public, and the Chief Labor Relations Officer. A public hearing on the bill is scheduled for Oct.10. More details.

Sustainability

Massachusetts – The governor announced that she will issue an executive order prohibiting all state agencies from purchasing any products containing single-use plastics. Her order will make Massachusetts the first of the 50 states governments to officially stop purchasing single-use plastic bottles. The order will be effective immediately upon issue. More details.

Key Takeaways

• The tipped wage “compromise” in Chicago is troubling on many fronts. The political dynamics in the city certainly favored One Fair Wage, but the manner in which local industry leaders negotiated an outcome puts the issue itself in a very different – and more precarious – position in other challenging political environments. And, the industry’s position and messaging around the compromise will impact the issue far beyond the city of Chicago. While the industry focus was on tactical issues such as length of the phase-in (5 years vs. the original 2 years), the focus of the proponents was on inequality and the perceived “racist” history of tipping. Our “compromise” did not adequately push back on those narratives and industry antagonists such as One Fair Wage are already advertising that, by nature of this compromise, the industry has publicly endorsed elimination of the tip credit and passively acknowledged its history and inherent inequality. This has untold ramifications for the issue nationally and other jurisdictions will be leading with those messages.

• Many brands have viewed fights around the FAST Act copycat legislation and tip credit elimination separately. And, the industry, in many ways, has approached managing those issues independently. Montgomery County, MD demonstrates that both of those issues are likely to appear in problematic jurisdictions (in this case, concurrently). The industry would be wise to quit viewing them as a QSR issue or a table service issue, and proactively focus resources on building firewalls on both issues in labor-friendly venues. 

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.