Top Items – April 5, 2024
Wages
Arizona – The house advanced a measure for the Nov. ballot that would adjust the state’s tip credit law. Under current law, the tip credit stands at a permanent $3/hr. If approved by the voters, the measure would set a tip credit of 25 percent going forward. The effort is in direct response to a pending ballot initiative that would increase the state minimum wage while eventually eliminating the tip credit by 2027. The senate must vote on the measure and if passed, it would go straight to the voters in November bypassing the governor’s office. More details.
California – On April 1, the state’s minimum wage rose to $20/hr for most quick service restaurant workers. The increase was mandated by passage last year of the FAST Act (AB-257) which also mandated the creation of a nine-member FAST Food Council. Fast food workers in California now have among the highest minimum wages in the country, according to data compiled by the University of California-Berkeley Center for Labor Research and Education. The state’s minimum wage for all other workers ($15.50/hr) is already among the highest in the U.S. More details.
Illinois – A house committee advanced legislation to eliminate the tip credit by 2025. The hearing room was well attended by servers and bartenders opposing the bill and despite passage, the sponsor allowed that the bill would go no further until concerns with the bill were addressed. Additionally, there was some Democratic opposition to the language. Once again, a strong showing by the industry has slowed the advancement of the legislation. Timing for next steps remains unclear. More details.
Rhode Island – A senate committee heard a resolution that would create a special legislative commission to study and review the state’s minimum wage. The report would be due no later than May 4, 2025. The legislation was in response to another bill to eliminate the tip credit in the state which has been tabled. Rhode Island’s current minimum wage is $14/hr but the server wage is $3.89/hr. More details.
New York, NY – Mayor Eric Adams and New York City Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga announced that, effective immediately, the city’s minimum pay rate for app-based restaurant delivery workers is increasing to at least $19.56/hr before tips. The new wage reflects the 2024 phase-in rate of $18.96/hr and an inflation adjustment of 3.15 percent. When the rate is fully phased-in on April 1, 2025, workers will earn at least $19.96/hr with an adjustment for inflation More details.
Labor Policy
Pennsylvania – In partnership with the governor, DoorDash is launching a six-month portable benefits pilot program. The company will match 4 percent of participating delivery workers’ pre-tip earnings and deposit it into a benefits account that can go toward retirement savings, paid time off, as well as health, dental, and vision insurance. The company’s delivery workers, known as Dashers, can also contribute money to the account themselves. The contributions will come from DoorDash, and there are no public funds being used for the program. The company says the initiative is the first of its kind and touts it as a way for workers to get both the flexibility of gig work and stability of a traditional job through portable benefits, which are attached to the worker, not the employer. The pilot program will last from April through Sept. More details.
Washington – The governor signed legislation 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 is now the sixth state to enact this type of law. More details
Labor Activism
Starbucks – The national organizing campaign has now eclipsed the 400-store mark. So far, 415 Starbucks stores in 43 states have won union elections with 94 stores losing an election. Workers at 527 stores in 47 states have filed to unionize and dozens of elections are currently pending. More details.
UNITE HERE – Donald Taylor, the president of UNITE HERE, the country’s largest union of hospitality workers, abruptly resigned this week, effective immediately. The organization’s Secretary-Treasurer Gwen Mills will succeed him, becoming the first black woman to lead the union. While overall membership increased significantly during his 12-year tenure, membership numbers have dropped post-pandemic. Of particular note, Taylor had been aggressively increasing the number of organizing campaigns (and membership) in right-to-work states. More details.
Delivery
Florida – The governor signed legislation that requires delivery platforms to obtain written or electronic consent of restaurants before advertising them or picking up orders. The platforms are also now required to remove restaurants within 10 days of a request, and they also can not intentionally inflate or deflate restaurant pricing. Delivery platforms will also be required to itemize costs for their customers. Additionally, customers have unlimited rights to appeal disputed orders and transactions under this legislation. More details.
Key Takeaways
- DoorDash’s Pennsylvania pilot program is important for a few reasons. Perhaps most importantly, the company has found a way to earn the support and partnership of a Democratic governor on its wage and benefit model. For context, the rideshare industry is facing increased criticism and mandates from progressive Democrats (recently in places like Seattle and Minneapolis). The pilot program provides a different policy option (that is workable for the company) and bolsters the brand’s credibility more broadly in this space. Beyond that, a recent study found that 4.3 percent of the country’s labor force participates in app-based work (in some areas of the country, like the coasts, that number is much higher) and some studies have found that nearly 36 percent of the workforce participates in the gig economy. In short, this isn’t some corner of the labor market, and app-based platforms, in many ways, are uniquely suited for scaling and managing benefit pools linked to accounts. The Pennsylvania pilot program could prove to be a consequential test for institutionalizing a new class of workers.
- The negative press this week around the California FAST Act somehow managed to outpace last week’s flood of negative stories, with programs like the Today Show getting in on the action. The general public is on the industry’s side on this issue, and the industry needs to continue to take advantage of this moment to advance its narrative and grow its support base.
Podcast
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