Wages
Colorado – Legislation has been introduced that would mandate that every municipality in the state with a minimum wage greater than the state rate offset the difference with a tip credit. That cash wage amount would be in addition to the existing state rate of $3.02/hr. Municipalities would, in effect, add the difference between the state and higher local minimum wage to the existing tip credit, making the tipped minimum the same statewide, currently at $11.79/hr. For example, if passed, Denver, where the minimum wage is $4/hr higher than the state’s, the total tip credit for restaurants could rise to $7.02/hr for each employee. More details.
Michigan – The senate advanced legislation amending the minimum wage law that’s set to go into effect Friday, Feb. 21. The bill changes the annual increase of the minimum hourly wage and tipped wage. The minimum hourly wage would still rise to $12.48/hr on Feb. 21, but it would reach $15/hr by 2027 instead of 2028. Tipped workers would earn 38 percent of the minimum hourly wage, which would increase to 50 percent on Feb. 21, 2031. The pending law would eliminate the tip credit by 2030. The house will consider the bill next week. More details.
New Hampshire – A senate committee will hear legislation next week that would increase the minimum wage to $15/hr and eliminate the tip credit by 2026. More details.
New Mexico – A house committee will hear legislation next week that will increase the minimum wage to $17/hr and eliminate the tip credit by 2026. More details.
Washington – A house committee heard legislation to raise the state minimum wage to $25/hr by 2031 with the first increase of $1.50/hr scheduled for Jan. 1, 2026. No votes were taken. The state’s current hourly minimum wage of $16.66/hr is the second highest in the country, with some local jurisdictions like Seattle setting wages in excess of $20/hr. More details.
Burien, WA – Voters approved an increase in the local minimum wage to $21.10/hr. Late last year, the city had approved a new ordinance mandating businesses with 20 or fewer employees pay $16.66 /hr to employees (the same as the state minimum wage rate). In July, businesses with 21 to 499 employees pay $20.16/hr and businesses with 500 or more employees pay $21.16/hr. The labor community protested the exemptions for smaller businesses and put a provision on the ballot essentially altering and eventually removing all those provisions and setting a blanket wage of $21.10/hr for all businesses by 2031. Under the new terms, the measure removes the carve-out for tips and benefits and changes how businesses are classified. Effective one month after passage, “small” businesses with fewer than 15 employees would have to pay $18.10/hr; “medium” businesses with 15-499 employees total (not just in King County) would have to pay $19.10/hr and businesses with 500 employees or more would pay the full $21.10/hr. The measure also creates a three-year phase-in period for medium businesses and a six-year phase-in for small businesses. By 2031, all businesses in Burien would be held to the same wage standard. More details.
Paid Leave
Michigan – Multiple senate committees heard compromise legislation to amend the states pending paid leave law scheduled to take effect Feb. 21. Additional changes are expected to the bill but a compromise between house and senate leaders looks likely in the next few days. The senate is slated to take action on the bill next week. More details.
Labor Policy
Justice Department – The agency will cease defending the independent status of three consumer and worker protection agencies, according to a letter from Acting Solicitor General Sarah Harris to Senator Richard Durbin (D-IL), the ranking member of the Senate Judiciary Committee. The determination applies to the National Labor Relations Board, the Federal Trade Commission (FTC), and the Consumer Product Safety Commission. Under a 90-year-old Supreme Court precedent, FTC commissioners and members of many other bipartisan independent agencies can only be fired for cause, unlike executive branch agencies whose heads the president can fire at will. The Justice Department will ask the U.S. Supreme Court to overturn that ruling to the extent that it protects regulators who wield “substantial executive power” from being fired by the president, according to the letter. More details.
Alcohol
Alaska – The senate unanimously passed legislation allowing teens as young as 16 years old to work in restaurants, and those as young as 18 be allowed to serve alcohol. It also requires alcohol-selling establishments to post a sign stating that alcohol can cause cancer and is unsafe for pregnant women. The bill now moves to the house. Similar legislation went to the governor last year but was vetoed. More details.
Diversity, Equity, and Inclusion
Missouri – The state attorney general filed a lawsuit against Starbucks, accusing it of engaging in discrimination with its diversity, equity, and inclusion policies and alleging that such initiatives have made the coffee giant’s workforce “more female and less white.” The lawsuit accuses Starbucks of engaging in “systemic racial, sexual, and sexual orientation discrimination” through hiring quotas, advancement opportunities, and board membership. The company disputed the allegations as “inaccurate.” More details.
Misc.
Beneficial Ownership Information – The House passed the Protect Small Business from Excessive Paperwork Act. The one-sentence bill simply postpones the beneficial ownership information reporting deadline for most companies to Jan. 1, 2026. In effect since last Jan., the Corporate Transparency Act aimed to combat terrorism and criminal organizations by going after the shell companies they use to funnel in money. The law requires small businesses to file what is called a beneficial ownership information report to identify the people behind the company. Initially, small businesses formed before Jan. 1, 2024, were required to file a report by Jan. 1, 2025. Businesses created between Jan. 1, 2024, and Jan. 1, 2025, had a 90-day window to file. Any companies formed after this Jan. 1 would have had 30 days to submit a report. However, a series of court orders ultimately led to the Corporate Transparency Act being put on hold. As of this week, companies were not required to file a beneficial ownership information report. The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), the agency enforcing the law, said businesses can still file voluntarily. There is companion legislation pending in the senate. More details.
SEC – Acting Chair of the Securities and Exchange Commission (SEC) Mark Uyeda directed the agency to pause its legal defense of a rule requiring companies to make climate disclosures. The agency’s legal team was ordered to inform a federal appellate court that the regulator was pausing its defense of the so-called climate change disclosure rule. The regulation, adopted last year, is being challenged in court by a number of business groups and state attorneys general. The controversial measure requires companies to identify the impact of their business activities on the climate, in particular, the creation of greenhouse gases that have contributed to the warming of the planet. Companies must provide data in regulatory filings that will help investors quantify the impact and risk to their investment in a company. Companies also must provide information about the financial cost of steps it is taking to minimize the climate impact of its business activities. The decision to tell the U.S. Court of Appeals for the Eighth Circuit to pause any further proceedings in the matter is an indication that the regulator may eventually move to rescind the rule or modify it. More details.
Key Takeaway
- New U.S. Attorney General Pam Bondi issued an internal memo to Justice Department attorneys targeting diversity, equity, inclusion, and accessibility (DEI and DEIA) in the private sector and outlining plans to investigate, eliminate, and penalize private enterprises found in violation of federal civil rights laws. The memo closely aligns with President Trump’s recent executive order regarding federal contractors and their DEI initiatives. The memo does not specify what steps the Justice Department will take to eliminate offending programs in the private sector or how other government agencies that enforce civil rights laws, such as the Equal Employment Opportunity Commission, will be used in this effort. But it is clear that the Justice Department will make use of both criminal and civil enforcement mechanisms to deter DEI and other programs that they feel constitute illegal discrimination or preferences. For brands, the memo confirms that employers’ DEI programs will face enhanced scrutiny. While the ramifications of the memo and the executive order are not yet clear, lawsuits challenging these practices are inevitable. Regardless of how these challenges play out in court, private companies should be aware of possible government investigations over newly “unlawful” diverse hiring practices.