Wages
No Tax on Tips – The week, the 30-day public comment period ended on the rule-making process for the new law that would allow tipped income to be deducted up to $25,000 per year. (The tax benefit phases out for those with a gross income of more than $150,000, or $300,000 for joint filers.) Earlier this year, the Internal Revenue Service (IRS) outlined a list of 68 classes of tipped workers who would be eligible to claim the deduction. Concerns remain over potential conflicts with some state laws that will likely result in some workers being shut out, further exacerbating inequities between front- and back-of-the-house workers. In New York, for example, tip pooling is not allowed so back-of-house workers would not be allowed to deduct tips, leaving a huge swath of workers without the tax benefit. The Labor Department will have to consider the comments and make any changes to the rule before the Jan. 1, 2025 effective date. More details.
Florida – Legislation was reintroduced that would allow employers to legally pay certain types of workers less than the state minimum wage of $14/hr if the worker themselves signed a waiver opting out. Under the proposal to be considered during the 2026 state legislative session that begins in Jan., workers would be able to voluntarily accept pay below the minimum wage when employed in “work-study, internship, PR apprenticeship, or other similar work-based learning opportunity.” A similar proposal (HB-541) was filed by the same sponsor last year but died in committee in both chambers. Per a constitutional amendment approved by voters in 2020, Florida’s minimum wage is set to increase to $15/hr next Sept. and rise with inflation thereafter. More details.
Labor Policy
NLRB – Earlier this month, California Governor Gavin Newsom signed legislation empowering the state to resolve labor disputes between union workers and their employers if the National Labor Relations Board (NLRB) can’t or won’t swiftly resolve them. AB-288 expands the Public Employment Relations Board (PERB) powers over private sector labor disputes like unfair labor practice charges and enforcing collective bargaining agreements. The bill, which applies to all workers covered by the National Labor Relations Act as of Jan. 1, 2025, would allow PERB to step in if the NLRB does not respond to unfair labor practice challenges, issue bargaining orders, or respond to certification petitions within six months. The National Labor Relations Board has now filed a lawsuit against the state seeking declaratory and injunctive relief, alleging that AB-288 “unlawfully usurps the NLRB’s authority by attempting to regulate areas explicitly reserved for federal oversight, creating a parallel regulatory framework that conflicts with the NLRA.” A similar legal scenario is unfolding in New York but California’s law goes much further and allows the state to issue civil monetary penalties of $1,000 against employers per labor-law violation and order parties to submit to mandatory arbitration to complete a CBA after more than six months of negotiations – far beyond federal law and thus more vulnerable to the agency’s federal preemption arguments. More details.
U.S. Senate – The Senate Health, Education, Labor, and Pensions (HELP) Committee held a second hearing on federal labor law reform. The title of the hearing was, “Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward.” The hearing follows the committee’s hearing last week which addressed current legislative proposals, including the “Protecting the Right to Organize Act” (PRO Act) and the “Faster Labor Contracts Act.” This hearing made clear the committee’s intent to address political spending by organized labor, “frivolous” unfair labor practice charges and the impact of illegal immigration on the workforce. More details.
New Jersey – The state attorney general sued Amazon this week charging that they violated state labor law by failing to properly pay delivery drivers due to misclassifying them as independent contractors. The lawsuit claims Amazon avoided paying overtime and skipped required contributions to New Jersey’s unemployment and disability insurance funds by classifying Flex drivers as contractors rather than employees. The company defended its Flex practice, saying the service allows drivers personal breaks, and that those employees are offered the minimum dollar amounts allowed for delivery blocks. That money, the company said, is still earned even if a driver completes a route early. Through the Flex service, delivery drivers use their personal vehicles to bring Amazon packages to both commercial and residential locations, but drivers typically bear the costs they accrue, such as gas, insurance, tolls, and maintenance expenses. The suit contends that mislabeling Flex deliverers as independent contractors also created instances where the state has doled out unemployment benefits to ineligible recipients in its workforce. More details.
Amazon – Last month, the Equal Employment Opportunity Commission (EEOC) halted cases built on the long-standing legal doctrine of “disparate impact,” which holds that neutral workplace policies can still disproportionately harm certain groups. Civil rights and worker-side advocates said the move strips employees of a vital remedy and is already disrupting cases. This week, a female Amazon driver filed a lawsuit in the U.S. District Court for the District of Columbia against the EEOC and acting Chair Andrea Lucas arguing that Amazon’s policy of denying bathroom breaks to delivery drivers had a disparate impact based on gender. According to the complaint, the driver was “denied the benefits of a full EEOC investigation, which could have uncovered helpful evidence; was prevented from receiving a determination by the EEOC as to whether there was reasonable cause to believe discrimination occurred, and; was unable to benefit from an EEOC-facilitated conciliation process that she would have received if there were a determination of reasonable cause.” More details.
Food Policy
Trump Administration – Health & Human Services (HHS) and the Department of Agriculture will soon release the final 2025–2030 Dietary Guidelines for Americans which is expected to encourage more consumption of foods with saturated fats like butter, cheese, milk, and red meat despite long-held medical recommendations advising against it. The American Heart Association (AHA), which HHS Secretary Kennedy accused of being “co-opted by the food industry” in a U.S. Senate hearing earlier this year, recommends limiting saturated fats to only 6 percent of one’s diet. Kennedy himself ascribes to what he says is “basically” the carnivore diet, which calls for eating only meat, poultry, eggs, seafood, fish, dairy products, and water. More details.
California – The governor signed legislation making California the first state to require restaurant chains to disclose major food allergens on their menus. The law will take effect on July 1, 2026. The law, SB-68, applies to food facilities that are already subject to federal menu labeling requirements under the Food, Drug, and Cosmetic Act and its implementing regulations (restaurant chains with 20 or more locations operating under the same name and offering substantially the same menu items). Those establishments will be required to disclose the presence of any of the nine major food allergens (milk, eggs, peanuts, tree nuts, fish, shellfish, wheat, soy, and sesame) that are known or reasonably should be known to be present in each menu item. Restaurants may comply by listing allergens directly on the menu, adjacent to each item, or providing the information digitally, such as through a QR code linking to an online allergen menu. If using a digital format, restaurants must also offer a non-digital alternative, which may include an allergen-specific menu, chart, grid, booklet, or other written materials. The law does not apply to compact mobile food operations, nonpermanent food facilities, or prepackaged foods already covered by federal allergen labeling requirements. More details.
Misc.
Illinois – Oral arguments were heard on the banking industry’s motion for summary judgement in their lawsuit challenging the Illinois Interchange Fee Prohibition Act. The law, passed in 2024, prohibits charging interchange fees on the tax or gratuity portion of a credit or debit card transaction in Illinois. Originally set to take effect on July 1, 2025, the law’s implementation was delayed by one year, and its new effective date is July 1, 2026. At the crux of plaintiffs’ argument is that the IFPA keeps card issuers, including banks and credit unions, from being fully compensated for the services they provide, including transaction authorization and fraud detection, because the IFPA exempts interchange on sales tax and tips. Attorneys for the defendant, the Illinois Attorney General’s office, asked the court to deny the plaintiffs’ challenge to the IFPA, arguing that the law does not severely crimp interchange revenues, as tax and tips make up a small percentage of a card transaction. A decision is likely before the end of the year. More details.
Ohio – The house passed heavily-amended legislation that advanced out of the senate last Feb. that would ban the sale of hemp edibles with more than 2mg THC per package in all groceries and convenience stores while also legalizing 10mg THC beverages. The bill has lain dormant for months but two weeks ago, citing legislative inaction, the governor issued an executive order blocking sales in the state for 30 days until either the legislature acted or his own administration could promulgate rules. Last week, a district judge temporarily blocked the governor’s order from banning intoxicating hemp products in the state, including hemp-based beverages, amid a lawsuit. As currently written, the bill allows for on-premise consumption of hemp-based beverages with 5mg or less of THC. The bill now goes back to the senate for concurrence. More details.
Key Takeaway
- On Nov. 1, New Mexico will become the first state in the nation to offer universal childcare which could have far-reaching impacts on employment. The new program was overwhelmingly approved by the voters as an amendment to the state constitution in 2022 and will be free to every family in the state. Because the program is funded by oil and gas company royalties, there will be no fees to pay and no income limits to sign up. Currently about 27,000 children across the state get childcare, and officials think another 12,000 children will join the program when it becomes universal. From a political perspective, the program was framed not as a progressive policy priority but as a front-end extension of the state’s existing – and very popular – free pre-kindergarten programs for three- and four-year-olds. From an employment perspective, the pandemic forced a disproportionate number of women to leave the workforce citing the availability and cost of childcare as the number one reason and many have not returned. This program could reverse some of those losses providing employers – especially entry-level employers – more access to workers easing the upward pressure on wages that worker shortages can cause.