Wages
Maine – The governor vetoed amended legislation that would have set a state minimum wage for agricultural workers. The bill, originally introduced by the governor based on recommendations of an appointed task force, was amended in committee to include a private right of action for alleged violations. The bill passed out of the legislature with that provision still intact despite the objections of the governor. She subsequently vetoed the bill. Based on the voting margin upon passage, a veto override is highly unlikely. More details.
Seattle, WA – The city council president introduced a new ordinance to replace the existing minimum wage law for food-delivery drivers. The new proposal sets a per hour minimum of $19.97/hr for “engaged” time, or when making deliveries. The current law, according to delivery companies, is much higher. It was approved unanimously two years ago but went into effect this past Jan. It requires companies to pay drivers a minimum $.44/minute and a minimum per-mile amount of $.74 while making a delivery, or a minimum of $5/order. DoorDash said the law requires the company to pay drivers in Seattle at least $26.40/hr before tips and pay for mileage – well above the city’s $19.97/hr minimum wage. There is also a per-mile minimum of $.35. The new proposed ordinance, in addition to effectively setting a $19.97/hr cap, eliminates the per-minute rate. The proposal also eliminates the ability for the city to require certain data from the companies related to driver compensation and time worked. It further reduces how long on-demand offers are made available to drivers; calculates pay over an earnings period versus per-offer, and; restricts a rule that gives drivers a private right of action to sue the companies. The proposal could go to a vote next month. More details.
Paid Leave
Connecticut – The house passed legislation to expand the state’s current paid sick leave requirement. Under current law, only employees of large businesses (50 or more employees) accrue paid sick leave at a rate of one hour per every 30 hours worked. Under the legislation, all businesses despite their size would be eventually covered: businesses with 25 or more employees by Jan 1., businesses with 11 or more employees by 2026, and all businesses by 2027. The bill now moves to the senate. More details.
New York – Lawmakers approved the governor’s budget which contains language making the state the first in the nation to offer paid leave for prenatal care. It also outlines more support for postpartum care. The executive budget amends paid family leave to permit up to 40 hours of leave for eligible employees to attend prenatal appointments, without impacting the twelve weeks of paid family leave already on the books. More details.
Labor Policy
FTC – The Federal Trade Commission (FTC) issued a final rule banning non-compete agreements. Under the new rule, existing non-competes for the vast majority of workers will no longer be enforceable after the rule’s effective date (120 days after publication in the Federal Register). Existing non-competes for senior executives (who represent less than 0.75 percent of workers) can remain in force under the FTC’s final rule, but employers are banned from entering into or attempting to enforce any new non-competes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing non-compete that they will not be enforcing it. In January 2023, the FTC issued a proposed rule which was subject to a 90-day public comment period. The agency received more than 26,000 comments on the proposed rule. The FTC found that non-competes tend to negatively affect competitive conditions in labor markets by inhibiting efficient matching between workers and employers. The agency also found that non-competes tend to negatively affect competitive conditions in product and service markets, inhibiting new business formation and innovation. The day after the rule was issued trade groups led by the U.S. Chamber of Commerce filed a lawsuit seeking to block the rule. More details.
Labor Department – The agency issued its final overtime rule increasing salary thresholds for millions of workers. This is the first such increase since the Trump Administration adjusted the standard in 2019 and resembles the Obama standard which was never implemented due to court challenges. Under the new standard, employers will be required to pay overtime July 1 to salaried workers who make less than $43,888 a year in certain executive, administrative, and professional roles. That cap will then rise to $58,656 by the start of 2025. The rule also increases the salary threshold for highly compensated employees (HCE) from $107,432 on July 1 to $151,164 annually by Jan. 1. The exemption level will then be adjusted every three years in accordance with wage data collected and analyzed by the agency. Over 33,000 comments were received from the public during the rulemaking process. More details.
Georgia – The governor signed legislation preventing businesses from receiving state economic incentives if they voluntarily recognize unions through “card check” (a check of signed union cards) rather than through a secret-ballot election. Just last week, the governor signed onto a joint statement with governors in other southern states condemning unionization efforts, particularly from the United Automobile Workers. The new law will almost certainly be challenged in court. More details.
Google – The company said it will roll back requirements that U.S. suppliers and staffing firms pay their employees at least $15/hr and provide health insurance and other benefits, a move that could allow the tech giant to avoid bargaining with unions. The elimination of the 2019 policy, along with other steps such as limiting access by temporary workers and vendors to internal systems, are designed to comply with shifting U.S. and global labor regulations related to contingent workers. The announcement comes after the NLRB ruled in Jan. that Google was a “joint employer” of workers provided by staffing firm Cognizant Technology Solutions and must bargain with their union. Google is appealing that decision. More details.
Labor Activism
Starbucks – The U.S. Supreme Court heard oral arguments in a case brought by the company seeking to neutralize an injunction levied against it for allegedly firing seven pro-union workers in Memphis due to their organizing support. The justices heard Starbucks’s challenge to a federal district court’s 2022 decision to order the company to reinstate a group of seven baristas who claimed Starbucks fired them from a Memphis coffeehouse in retaliation for union-organizing. The company says its move to fire the Memphis workers was within the company’s rights under the law because the workers violated company policy by inviting a TV news crew into the store after-hours. The National Labor Relations Board (NLRB) agreed with the workers’ claim that Starbucks had illegally fired them. At issue is the legal threshold the NLRB needs to meet to obtain a so-called 10(j) injunction from a federal court, an expedited process that allows the agency to reinstate illegally fired workers or other remedies that it typically reserves for the most egregious or time-sensitive cases. Federal circuit courts already have the authority to grant NLRB requests to force companies to rehire union organizers or require other actions like reopening closed stores or bargaining with unions. While no decision was rendered, the majority of the justices across the ideological spectrum appeared to agree with Starbucks that the NLRB wielded too much power in determining the outcome of the Memphis case. More details.
Starbucks – The company and Workers United returned to the bargaining table this week for the first time in nearly a year. Company representatives and 150 representatives from the union met at an undisclosed location in Atlanta to begin negotiating a framework for union contracts for each of the over 400 unionized stores. The last time the two sides sat down was May 23, 2023 and they have spent months blaming each other for the impasse. During that time, workers have staged several strikes and tried to win seats on Starbucks’s board, and the company has sued the union over its use of the Starbucks logo. In Feb., however, the two sides issued a joint statement saying they were returning to the bargaining table. More details.
Alcohol
Delaware – Senate-passed legislation that would allow home delivery of alcohol in the form of wine, beer, and mixed cocktails from restaurants, brewpubs, and taverns advanced out of a house committee. It has an additional house committee stop before heading for likely passage on the house floor. More details.
Key Takeaways
- The Labor Department’s chief attorney indicated this week that she will be pursuing more aggressive tactics in the agency’s fight against child-labor violations. Specifically, she will pursue the policy of “disgorgement” which requires companies to return profits made from illegal conduct. While a frequently-pursued strategy by agencies such as the in cases of financial fraud, it is an uncommon remedy for cases under the Fair Labor Standards Act. Worker advocates and former agency officials say that DOL enforcement is currently the only way to correct child labor violations because the FLSA doesn’t have a private right of action provision allowing workers to bring their own child labor lawsuits for damages. The industry continues to be a major focus for the agency and this year alone, it has pursued cases against franchisees from McDonald’s, Jersey Mike’s and Bojangles among other industry players. With their plans now to actively go after profits as a remedy, the industry is an even more desirable target. Brands should react accordingly.
- A new study published this week says that about half the planet’s plastic pollution is branded and five companies alone are responsible for a quarter of the branded amount. Coca-Cola, Pepsi and Nestle – key industry suppliers – were at the top of the list and food and beverage companies in general were cited as being “disproportionately large polluters.” As more and more states pursue Extended Producer Responsibility (EPR) regimes expanding the onus of responsibility for recycling on consumer-facing brands, expect this and similar studies to be used as rationales for those legislative and regulatory proposals.
Podcast
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