Wages
Florida – Legislation that would allow employers to pay below the minimum wage for employees involved in a “work-study, internship, pre-apprenticeship, or other similar work-based learning opportunity” has been tabled at least temporarily. Under current law, employers in Florida are already allowed to pay sub-minimum wages to certain workers, such as people ages 19 and younger during the first 90 days of employment and to students working part-time in vocational training programs. More details.
Nebraska – A compromise that would break an ongoing filibuster has been reached on an amended legislative proposal that would cap future increases to the state minimum wage rather than allowing the automatic increases voters approved in 2022 based on an annual cost-of-living adjustment after 2026. In 2022, voters decided to permanently opt for annual $1.50/hr increases through 2026, up to $15/hr, before shifting to annual cost-of-living adjustments. The original bill would have removed any cost-of-living adjustments, but the new compromise calls for an annual 1.75 percent increase in perpetuity.
Vermont – A senate committee heard legislation to raise the minimum wage to $25/hr, index it to inflation and eliminate the tip credit by 2026. The hearing is believed to be pro forma in deference to the sponsor but no legislative action is anticipated on the bill. More details.
Paid Leave
Missouri – Less than a week away from the May 1 effective date, it appears increasingly unlikely that house-passed legislationrepealing the new paid sick leave law will be enacted. Passed by the voters last Nov. Proposition A, which is scheduled to take effect next Thursday, requires employers with business receipts greater than $500,000 a year to provide at least one hour of paid leave for every 30 hours worked. Employers with fewer than 15 workers must allow workers to earn at least 40 hours per year, with larger employers mandated to allow at least 56 hours. The law also gradually increases the minimum wage to $15/hr by 2026. Democratic filibusters in the senate have derailed progress of the bill and the clock may run out. On a separate track, the state supreme court is still deliberating on a lawsuit, filed by the state chamber of commerce and other business groups including the Missouri Restaurant Association, arguing the election results in support of the recent ballot measure to increase the minimum wage must be set aside because its fiscal note summary is “insufficient and unfair.” More details.
Labor Policy
California – An assembly committee advanced legislation that would allow Lyft and Uber drivers to unionize. The bill establishes the Transportation Network Company Drivers Labor Relations Act and provides that transportation network company drivers have the right to form, join, and participate in the activities of TNC driver organizations of their own choosing and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. This is the latest salvo in the war between the labor community and Uber and Lyft that has seen seminal legislative action (A.B. 5) and numerous ballot initiatives over the last few years. More details.
Labor Activism
Illinois – One Fair Wage staged a demonstration and rally at the state capitol in support of legislation to eliminate the tip credit. Under the proposal, the tip credit would be reduced to 20 percent on July 1, 2025, to 10 percent on July 1, 2026, and fully eliminated by July 1, 2027. The bill is stalled and unlikely to advance this year. More details.
New York – As in Springfield, One Fair Wage held a rally at the state capitol to bring attention to pending legislation to eliminate the tip credit in the state by 2029. If passed, tipped workers in New York City and Nassau, Suffolk, and Westchester Counties would have a cash wage of $12.77/hr on Jan. 1, 2026, increasing to $14.88/hr in 2027, and to $17/hr on Jan. 1, 2028. Upstate payrolls would start at $11.50/hr in 2026 and climb to $14.50/hr in 2028. Starting in 2029, increases would follow the rate of inflation. The legislation also establishes a One Fair Wage tax credit whereas employers could claim back $1.50 for each tipped hour in 2026. That credit would drop to $1.30 in 2027, $1.20 in 2028, $1.10 in 2029, and $1 in 2030. Businesses would claim the credit on state income tax returns. Chances for passage are unclear. More details.
Sustainability
New York – A senate committee unanimously advanced legislation that would require large corporations to disclose their greenhouse-gas emissions – a move supporters say could, when combined with a similar 2023 California law, result in a de facto national reporting requirement. Under the measure, companies doing business in the state with revenue of at least $1 billion/yr must report three levels of emissions: the direct emissions from their facilities, known as Scope 1 emissions; emissions generated as a result of the company’s electricity needs, known as Scope 2; and all other indirect and supply chain-related emissions, known as Scope 3. Companies would begin reporting Scope 1 and 2 emissions in 2027 and Scope 3 emissions the following year. More details.
Washington – Legislation establishing an extended producer responsibility program for packaging is on the way to the governor’s desk. The Recycling Reform Act would create an EPR program for most kinds of paper and packaging. It would also establish a statewide recycling collection list, provide curbside recycling for all homes that already have curbside trash service, establish an advisory panel and conduct a statewide recycling needs assessment. Producers would ultimately reimburse waste service providers 90% of recycling system costs, and that funding could be used for investment in system improvements, according to the bill. A producer responsibility organization would develop, implement and finance the program, and the Washington State Department of Ecology would oversee it. More details.
Food Policy
Trump Administration – The Food & Drug Administration announced its intention to phase out synthetic dyes used to enhance color in common foods like candy and cereals. At a press conference this week, Health and Human Services Secretary Robert F. Kennedy Jr. said his agency is making the move as a first step to improve the nation’s food supply and address chronic disease. The FDA will take several actions aimed at phasing out synthetic dyes and the agency will work with the food industry to voluntarily eliminate six commonly used dyes by the end of next year. It will also start the process of banning two other colorants, Citrus Red No. 2 and Orange B; and it’s asking food companies to speed up the timeline for removing the previously banned colorant Red No. 3. More details.
Louisiana – A senate committee could hear legislation next week that would require products containing artificial dyes, chemical additives, and other ingredients to include a warning label on the product where the substances are banned or not authorized in other countries. The bill lists 51 different ingredients that would require the warning, including several synthetic dyes, synthetic or artificial vanillin, propylparaben, potassium bromate, melatonin, bleached flour, and others. Any food items containing any of the listed ingredients would be required to bear the following warning label, “WARNING: This product contains an artificial color, chemical, or food additive that is banned in Australia, Canada, the European Union, or the United Kingdom.” Additionally, SB 14 would prohibit public schools and non-public schools receiving state funds from serving ultra-processed foods. The bill defines ultra-processed food as any food or beverage that contains the following: Blue dye 1, Blue dye 2, Green dye 3, Red dye 3, Red dye 40, Yellow dye 5, Yellow dye 6, azodicarbonamide, Butylated hydroxyanisole (BHA), Butylated hydroxytoluene (BHT), Potassium bromate, propylparaben, and titanium dioxide. More details.
Misc.
Oakland, CA – Former Congresswoman Barbara Lee won a closer than expected special election to replace the previous mayor who was recalled by voters after a criminal investigation and subsequent indictment on bribery charges. The new mayor took office immediately. Of particular note, while in Congress, then-Rep. Lee (D) advocated for a $50/hr minimum wage. More details.
Key Takeaway
- The industry should be gearing up to fight one of the most consequential tax packages in nearly a decade. With significant changes to business expense deductibility, corporate tax rates and state and local tax deductions among other items, operators have heightened opportunity yet also the potential for heightened risk. All brands should be intensely engaged in this debate as this window for significant tax relief will not come around again in the foreseeable future.