Wages
Minnesota – Legislation is on its way to the governor that would increase the annual minimum wage adjustment so it’s linked to inflation. Increases would be capped at 5 percent per year. The current law calls for annual boosts of 2.5 percent. The measure is seen as a compromise against a bill calling for a $15/hr minimum wage effective July 1. For context, Minnesota does not have a tip credit. Also included in the bill is pay transparency language, mandating that employers with 30 or more employees disclose salary ranges in job postings. The governor is expected to sign the bill. More details.
King County, WA – The county council passed an ordinance that increases the hourly minimum wage in unincorporated areas to $20.29/hr. As written, employers with 15 or fewer employees and an annual gross revenue of less than $2 million would have an hourly minimum wage rate of $3/hr less ($17.29/hr). The reduction would decrease annually by 50 cents until no reduction remains. Employers with more than 15 employees but fewer than 500 employees would have an hourly minimum wage rate of $2/hr less ($18.29/hr). The reduction would decrease annually by $1/hr until no reduction remains. More details.
Seattle, WA – A city council committee advanced an 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 wage level, 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 at the end of the month. More details.
Paid Leave
Minnesota – The house passed legislation making some technical changes to the state’s paid leave law that passed last year (effective in 2026). The costs of the program are split between employers and employees but among other things, the legislation boosts the current payroll tax rate of .7 percent to .88 percent. The bill now moves to the senate. The 2024 legislative session concludes this weekend. More details.
Labor Policy
Colorado – Legislation is on its way to the governor that would prohibit captive audience meetings. Per the bill language, an employer is prohibited from disciplining or firing an employee for their refusal to attend or participate in an employer-sponsored meeting concerning religious or political matters including labor organizing. The bill allows for a private right of action. More details.
Colorado – Legislation is on its way to the governor that would encourage underage employees to report illegal working conditions to the state by banning employer retaliation, eliminating potential criminal liability for their parents or guardians from Colorado law, and making final orders of a company’s violations public. The legislation also clarifies that employers could be ordered to pay damages to underage workers. Those damages would be on top of civil penalties paid to the state, a maximum of $4,000 per violation or $10,000 for willful violations. For context, in 2023, Colorado enacted legislation that lets underage workers who are injured while working in illegal conditions sue the employer for damages, rather than be limited to filing a worker’s compensation claim like most workers who suffer on-the-job injuries. More details.
Illinois – A house committee will hear senate-approved legislation next week that would prohibit captive audience meetings. The legislation would prohibit employers from firing, disciplining, or threatening adverse employment actions against workers who refuse to attend meetings on political matters, including unionization. Washington recently became the sixth state to enact this type of law. More details.
Vermont – The senate advanced house-approved legislation dubbed the “Vermont PRO Act” which would make it easier for both private and public sector workers to unionize by expanding the right to form a union. The bill also prohibits captive audience meetings and simplifies union elections in the public sector through majority sign-up or “card check.” The house overwhelmingly passed the legislation earlier last week. It is unclear whether Governor Phil Scott, a moderate Republican, will sign the bill; however, it passed the general assembly with enough voters to override any veto. More details.
Labor Activism
Mattos Hospitality – The company which operates the popular Lodi restaurant in New York City’s Rockefeller Center could be the first restaurant operator in the country that must recognize and bargain with a union per the new precedent set in the NLRB’s Cemex decision. The Cemex standard allows the National Labor Relations Board (NLRB) to order a company to recognize and bargain with a union prior to a vote, or even when workers have voted a union down. In the case of Lodi, workers narrowly voted down a union last year. In April, the NLRB Regional Director for the Manhattan office issued a complaint seeking a Cemex order against Mattos Hospitality saying that it engaged in illegal practices to dissuade workers from forming a union. Allegations include surveilling workers’ communications, telling employees that the restaurant would close if a union were formed, and warning undocumented workers that their immigration status would be affected if they unionized. The company denies the allegations. An administrative law judge plans to hear the case beginning June 24, and it could take months for the judge to make a decision. If the judge issues a Cemex order, and forces the company to recognize the union, Mattos Hospitality could appeal the decision to the full labor Board and delay bargaining. More details.
REI – Workers at a store in Santa Cruz, California voted 32-12 in favor of forming a union, affiliating with the United Food and Commercial Workers International Union (UFCW) Local 5. This is the tenth location of the chain that the union has successfully organized. More details.
Alcohol
Colorado – The governor signed legislation that repeals the current sunset of existing statutes that allow licensed businesses to sell alcoholic beverages for delivery or takeout. The current law, initially enacted during the pandemic to help sustain struggling restaurants, is set to expire July 2025. More details.
North Carolina – Omnibus ABC legislation advanced out of a house committee that, among other things, would permanently allow for cocktails-to-go and home delivery of alcohol as well as allow for happy hours going forward. The bill has multiple additional committee stops before going to the floor. More details.
Data Privacy
Maryland – The governor signed comprehensive data privacy legislation into law. The new law limits the collection of personal data to what is “reasonably necessary and proportionate” to provide or maintain a specific product or service, unless the controller obtains the consumer’s consent. It further mandates that a company must establish, implement, and maintain reasonable administrative, technical, and physical data security practices to protect the confidentiality, integrity, and accessibility of personal data and to secure it from unauthorized access. Companies must also provide a mechanism for consumers to revoke consent to the processing of their personal data that is at least as easy as the mechanism for them to have given consent, and to cease processing the data as soon as possible but no later than within 30 days of revocation of consent. Of particular importance, there is no private right of action and the law will be enforced by the attorney general’s office. More details.
Vermont – Data privacy legislation is on its way to the governor that includes, among other things, minimization requirements which significantly constrain what personal data companies can gather and use. It also bans companies from selling consumers’ sensitive data. Of particular note are provisions allowing for private rights of action giving consumers the right to sue companies that mishandle their data. The private right of action will sunset after two years unless the legislature reauthorizes it. It is unclear whether the governor will veto the measure as he opposes the private right of action provisions. If enacted, Vermont would be the 18th state to pass comprehensive data privacy legislation, and the fifth this year alone, along with Kentucky, Maryland, New Hampshire and New Jersey. More details.
Misc.
New Jersey – Onerous franchisee bill of rights legislation targeted at the hotel industry advanced out of an assembly committee. If passed, the bill would require brand improvements such as wi-fi, mobile check-in, breakfast, etc., to be negotiated property by property, potentially weakening brand standards. It would also permit hotel owners to use “comparable” products to those required by brands and force hotels to allow their federally registered trademarks to be used on “comparable products.” A companion bill has been introduced in the senate. While not directly affecting the restaurant industry, any attempts to weaken franchise agreements in any industry segment need to be watched carefully. More details.
Key Takeaways
- Major QSR brands reliance on prison labor was back in the news this week, following a Bloomberg piece. The SEIU’s Union of Southern Service Workers clearly intends to make this part of a larger argument that brands participate in an economic system of oppression in the South. On cue, the union-backed EPI released a study demonstrating that a number of mechanisms in the South, including prison labor, but also extending to other regulatory structures like tax regimes (which are heavily or entirely dependent on sales taxes) by design benefit corporations and high income earners at the expense of brown and black workers. One Fair Wage’s narrative around the tip credit as a vestige of slavery was also mentioned in the report. In short, expect the SEIU to continue linking social and economic justice issues particularly in the South.
- The coordinated pushback against leveraging underage workers has begun in earnest. While numerous red states have eased restrictions on child labor and numerous blue states have tightened them, the “national conversation” on this issue has been somewhat in the background. This week, a new front was opened in that dialogue – the increased vulnerability to sexual harassment that underage workers face. This week, the Wall Street Journal reported on EEOC findings that about a quarter of young workers experience sexual harassment on the job, according to a 2023 study, with some of them as young as 14 years old. Additionally, the agency is receiving dozens of complaints per month regarding sexual harassment of minors on the job. Of particular note for this WSJ piece was that every single employer cited in the article was from the restaurant industry with major industry brands prominent in the reporting. While the industry has “shared” the focus on child labor with the meat processing industry, the sexual harassment angle appears to have fallen directly in our laps. Brands should be watching the further development of this issue very closely.
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.