Wages
Los Angeles, CA – A business-backed ballot effort to repeal the city’s recently passed minimum wage law for hospitality workers failed to get the necessary signatures to qualify for the ballot. The group, the L.A. Alliance for Tourism, Jobs and Progress, submitted more than 140,000 signatures. In response, the powerful hotel workers union, UNITE HERE Local 11, launched an effort of its own encouraging voters to revoke their signatures. The city clerk found around 84,000 signatures to be sufficient, falling 9,000 short of the nearly 93,000 signatures needed to qualify for the ballot. The group has 30 days to challenge the signature certification process. The minimum wage for airport and most hotel workers in the city is now $22.50/hr and will continue to increase until reaching $30/hr in 2028. More details.
San Diego, CA – Next week, the city council will consider a proposal to raise the minimum wage to $25/hr for certain hospitality workers in the city including those at large hotels, convention centers, and amusement parks. Other jurisdictions in the state including Los Angeles and Long Beach have adopted similar ordinances with even higher wage levels. The local chamber of commerce is organizing the business community’s opposition to the measure. More details.
Tacoma, WA – A judge ruled that a proposed ballot measure to raise the minimum wage will proceed to the ballot next Feb. Activists in the city collected 10,000 signatures to place a “Workers’ Bill of Rights” on the ballot, proposing a $20/hr minimum wage for large employers, $18/hr for businesses with 16-500 employees, and $17/hr for those with 15 employees or fewer. The initiative also mandates two-week advance work schedules. The city council had recently voted to send the measure to the Nov. ballot but missed some procedural deadlines causing the delay until early next year. More details.
Labor Policy
U.S. House – A bipartisan group of lawmakers introduced the American Franchise Act which would codify the legal definition of a joint employer, aligning with a traditional interpretation of joint employer liability based on “direct and immediate control.” It would clarify that franchisors may only be considered a joint employer with their franchisees if they “share or codetermine one or more of the employees’ essential terms and conditions of employment” like wages, benefits, and working hours. The joint employer standard has gone through multiple revisions throughout three presidential administrations. In 2015, during the Obama administration, the Browning-Ferris decision set the standard for holding employers like franchisors legally liable for upholding labor standards and regulations, even if the parent company only had “reserved and indirect control” over the employees. According to the National Restaurant Association, “the American Franchise Actcreates a clear ‘joint employer’ standard based on direct and immediate control of the conditions of their workforce’s employment. This permanent definition would encourage entrepreneurship and stimulate economic growth in communities across the country.” More details.
New Jersey – The governor signed legislation extending the prohibition on required employer-sponsored captive audience meetings to include an “employee’s decision to join or support” a “labor organization or association.” It is now unlawful for an employer to fire, threaten to fire, or otherwise discipline or threaten to discipline employees for their refusal to participate in an employer-sponsored meeting meant to discuss union organizing activity or communicate with their employer regarding union organizing activity. The new law provides a private cause of action for employees aggrieved by a violation of the statute. In addition to restraining orders on continuing violations or being required to reinstate employees unlawfully terminated under the act, employers may also be liable for lost wages and benefits, punitive damages, and attorneys’ fees and costs. The law takes effect Dec. 2, 2025. New Jersey is one of 12 states with captive audience laws. More details.
Minneapolis, MN – The city council passed an ordinance revising their paid sick time law to include “know your rights” training for all workers covered under the city’s leave law. The training provision could be utilized as a remedy by the city’s civil rights director if an employer has violated any provision of the underlying paid leave law. The training would be conducted and enforced by the city’s civil rights office and workers would be compensated for the hour-long training by their employers at the employee’s regular rate of pay. The original proposal would have allowed registered third parties to conduct the training – i.e. unions – but the business community, led by the restaurant industry, was able to negotiate that language out of the bill and ensure it was handled by the city. There may be an effort by union allies to reinstall the original language so the industry must remain vigilant.
Food Policy
MAHA – The Administration released its Make Our Children Healthy Again Report published by the MAHA Commission which is chaired by Health and Human Services Secretary Robert F. Kennedy Jr. Among other recommendations and policy reforms, including reviewing chemical additives in food, revising nutrition labels, and defining ultra-processed foods, the report directly calls upon restaurants to participate in improving the health of children. “HHS and USDA will work with restaurants to increase education and awareness of age-appropriate healthy food options for children, consistent with the [Dietary Guidelines for Americans],” the report said. Other food industry-related highlights of the report include new nutrition research spearheaded by the National Institutes of Health, in partnership with the FDA, USDA, and the Administration for a Healthy America, an update to the Dietary Guidelines for Americans and new guidelines for limiting the marketing of unhealthy foods to children. More details.
MAHA – The Administration has withdrawn a government report warning that even small amounts of alcohol could raise the risk of cancer and other health problems. The draft report, entitled Alcohol Intake and Health Study, found that even moderate drinking (one or two drinks a day) could increase the risk of injuries, liver disease, and cancer. A separate report from the National Academies of Sciences, Engineering and Medicine reached a conclusion long supported by the industry – that moderate drinking may be linked to fewer deaths overall and fewer heart attack and stroke deaths compared to not drinking entirely. The action is the latest indication that the Make America Healthy Again (MAHA) agenda will likely not pursue further restriction of alcohol. More details.
Texas – The governor issued an executive order directing the Texas Department of State Health Services and the Texas Alcoholic Beverage Commission to establish rules that will keep hemp-derived products out of the hands of minors. The order states that the agencies’ rules should require age verification by buyers using a government-issued ID. Businesses that don’t comply, could lose their retailer licenses, according to a news release about the order. The order does not stipulate whether a ban on sales to a “minor” means those under 18 or those under 21, like the age restriction for alcohol sales. Abbott has supported setting the age limit for hemp products at 21 years old in special legislative sessions. Industry efforts ensured that the order does not prohibit on-premise consumption. The rulemaking process should begin soon. More details.
Tariffs
Trump Administration – President Trump signed an executive order offering some tariff exemptions to trading partners that have signed trade agreements with the U.S. such as the U.K, EU, Japan, South Korea, and Australia. A country must have a qualifying, signed trade agreement for exemptions to apply. The latest order identifies more than 45 categories for zero import tariffs from “aligned partners” who agreed to trade deals to cut Trump’s “reciprocal” tariffs and duties imposed under the Section 232 national security statute. The exemptions for countries with U.S. trade deals began at 12:01 a.m. this past Monday. Some of the products eligible for exemption include coffee, tea, spices, grains and some seafood products, among others. Brands should be working with their various trade group partners and contract lobbyists to ensure priority items are exempted. More details.
U.S. Supreme Court – The court agreed to hear arguments over President Trump’s sweeping global tariffs, taking up a fast-moving appeal that deals with the centerpiece of the administration’s economic agenda. In the meantime, the tariffs will remain in place while the court hears the case. Trump is pressing the justices to overturn a lower court ruling that found his administration acted unlawfully by imposing many of his import taxes, including the “Liberation Day” tariffs the White House announced in April and tariffs placed this year against China, Mexico, and Canada that were designed to combat fentanyl entering the United States. The case puts a major component of the American economy on the conservative court’s docket. And it raises a fundamental question about the power of the president to levy emergency tariffs absent explicit approval from the U.S. Congress. At issue is whether a 1977 federal law giving the president certain emergency powers allowed the president to levy tariffs on nearly all goods imported into the United States through a series of executive orders. More details.
Key Takeaway
- McDonald’s USA very publicly withdrew from the National Restaurant Association over the industry’s continued support of the tip credit. In public comments, the company’s CEO indicated that the tip credit provided an unfair advantage to McDonald’s competitors. The labor community, including One Fair Wage, quickly seized upon the fact that McDonald’s CEO was, in effect, parroting many of One Fair Wage’s talking points. This development dramatically alters the dynamics around the tipped wage issue. At this juncture, it’s unclear how it may impact policy in the small handful of jurisdictions where changes to the status quo are possible. However, on a moving forward basis (and, on this particular issue), the industry will have to view McDonald’s as an opponent and be prepared for the brand to potentially deploy substantial resources to impact the issue.