Wages
New York – In conjunction with the pending minimum wage increase in Jan., the state labor department will begin a public awareness effort about the minimum wage increase and encourage workers to report missing wages. That effort will include digital outreach via social media, newsletters, e-mail communications, and direct outreach to distribute informational flyers with partnering organizations. Minimum wage earners who do not see the increase reflected in their paychecks can file a wage complaint on the New York State Department of Labor’s website. On Jan. 1, New York’s minimum wage will increase to $16/hr in New York City, Westchester, and Long Island, and $15/hr for the rest of the state. More details.
Paid Leave
Cook County, IL – The county unanimously approved a new paid leave mandate that applies to all suburban municipalities. The changes replicate and slightly expand on the Jan. 1 state law, which will require most employers to provide up to 40 hours of paid leave per year. Statewide, time off will be accrued one hour at a time for every 40 hours worked, or employers could front-load that time off. Those standards would be enshrined at Cook County businesses starting in 2024 whether or not the County Board took any action. The county rules go a bit further, however. All workers – except for state and federal employees, students working for their college, and short-term employees of colleges and universities for less than one consecutive calendar quarter – would be covered. Of note, it also has a private right of action provision allowing workers to sue their employers for non-compliance. More details.
Labor Policy
U.S. House – The House Education and the Workforce Committee advanced bipartisan legislation to reauthorize the bill funding the Labor Department’s workforce development programs. The overhaul, backed by Republican Committee Chair Virginia Foxx and top Democrat Bobby Scott, would expand use of “individual training accounts,” worth $5,000 per person, for retraining or other skills development programs. The bill also adds digital literacy to the list of core competencies included in adult education programs, tweaks how the system handles young workers, and increases requirements on states to fund education programs in correctional facilities. More details.
U.S. House – The House Education and Workforce Committee advanced on party lines a joint resolution to utilize the Congressional Review Act in overturning the NLRB’s pending joint employer rule. If the joint resolution were to advance out of the full house, it faces an uphill battle in the senate and a certain Biden veto. More details.
Labor Activism
Starbucks – An NLRB Regional Director filed a complaint against Starbucks accusing the company of violating federal labor laws with the closures of 23 stores and asserting that shuttering the union and non-union shops was part of a union-busting effort. The complaint claims Starbucks closed the stores without providing prior notice to Workers United, the labor union that has already organized several Starbucks locations, and without allowing the union an opportunity to bargain about the decisions. The complaint further states that eight of the shops were unionized at the time of their closure, while the other 15 were not represented by a union. The NLRB is seeking an order from an administrative judge that requires Starbucks to immediately reopen all 23 of the stores, rehire the employees, bargain with unions at stores that have unionized, and provide compensation to workers who lost pay and benefits due to the closures. More details.
Starbucks – A new report by a third-party auditing firm found that the company could have better handled its response to the ongoing unionization effort in multiple ways. But, it “found no evidence of an anti-union playbook.” The report was the result of a review conducted between July and Sept. of all information related to the union drive, with the compilation and analyses performed by an outside firm, Thomas M. Mackall LLC. The research and analysis were commissioned by Starbucks’ board after a majority of shareholders voted at a March 2023 meeting to have a third-party review the labor situation. The report makes many recommendations going forward including integrating a risk assessment plan so it is clear that Starbucks is not only following federal labor law, but is also actively seeking to improve its relationship with the union. The assessment also suggested that Starbucks take “additional steps to prevent interference and coercion, and discrimination or retaliation” in response to lawful union activities, which would greatly reduce the number of NLRB and federal lawsuits against the company. Additionally, the auditors make a strong recommendation that Starbucks redraft its Global Human Rights Statement, or GHRS, or its core policy statement on interacting with all constituents. The report suggests the GHRS be amended to expressly state the company recognizes the rights of employees to communicate with one another about unionizing, without fear of retribution, and to opt for collective bargaining. More details.
Sustainability
U.S. Senate – This week, many large restaurant companies received a letter from Senator Jeff Merkeley (D-OR) pressuring them to move away from single-use plastics and toward more sustainable packaging products. The Senator specifically asked companies if they had an ESG or sustainability team, what are their goals and action plans for reducing plastics, and what their challenges might be to moving in this direction. There is pending legislation in the Senate that he has authored that would make large companies set recycling targets and “take more responsibility for their pollution,” among other things. The bill has little chance of becoming law. More details.
Misc.
U.S. House – Judiciary Committee Chair Jim Jordan (R-OH) subpoenaed The Vanguard Group and Arjuna Capital, seeking additional information for the panel’s investigation of the companies’ environmental, social, and governance policies. The subpoenas come months after the committee asked the companies to turn over documents and communications as part of an effort to determine whether corporate efforts to advance ESG policies have led to “collusive agreements” that may violate U.S. antitrust laws. All brands need to watch this process closely as they navigate this space in order not to become a political football. More details.
Key Takeaways
- A number of franchisees of major corporate brands were pulled into a lawsuit against the Alabama Department of Corrections “work release” program, characterizing the program as providing slave labor for QSRs. This is concerning for many reasons. First, the brands are likely to be pilloried by critics (whether accurately or inaccurately) for not paying standard minimum wages and encouraging the use of “convict leasing.” After fees and taxes are deducted, the workers’ net wages can be as low as $2/hr, according to plaintiffs. (In Alabama, the state typically takes 40 percent, while other fees can be applied for things like transportation.) Of additional importance, the effort is being coordinated by two labor unions – the Union of Southern Service Workers and the Retail, Wholesale and Department Store Union (RWDSU) and the lawsuit will be further leveraged to tarnish employer’s reputations among employees. While brands cannot control hiring practices of individual franchisees, companies need to carefully consider the public affairs aspects of participating in these programs. Workforce development programs involving vulnerable populations can quickly turn from reputation-enhancing exercises to reputational quick sand, depending upon how the programs are conducted.
- This week, One Fair Wage held a celebration in Chicago with Mayor Johnson and several aldermen to celebrate their legislative victory, eliminating the tip credit by 2028. While the event itself is not important, the symbolic backdrop was notable. The event was held at the Museum of African American History and the narrative on the invitation read, “Nearly 150 years after emancipation and 100 years after Pullman car porters won One Fair Wage, women of color tipped restaurant workers [sic] have finally won One Fair Wage in Chicago.” While race has been part of OFW’s narrative for some time, they are now embracing racial inequity as their lead justification for pursuing tip credit elimination. We have seen this play out at recent events in Baltimore, Boston, and Cleveland and the industry needs to brace itself for a vigorous defense against that characterization.
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.