Wages
California – A new study conducted by the Pepperdine School of Public Policy and Beacon Economics has shown that California’s Fast Act has resulted in significant job losses within the state’s fast-food industry. The report, titled “Jumping the Gun on the Fast Act,” analyzed the revised employment data from the California Employment Development Department (EDD). The results challenge earlier reports that suggested the wage increase had minimal negative impact. The study reveals that revised employment estimates show a decline of over 23,100 jobs (3.2 percent) in the limited-service restaurant sector over the past year, while the rest of the U.S. saw growth of 0.8 percent in the same category. The findings suggest that early claims of the Fast Act’s success were premature and based on incomplete data. The white paper warns that the negative effects of the Fast Act may well extend beyond employment numbers, with potential long-term impacts on business sustainability, employee work hours, and benefits. Given these findings, the white paper urges the Fast Food Council to halt any further regulatory changes until unbiased, comprehensive research is conducted. More details.
Nebraska – Amended legislation to alter a voter-passed minimum wage law advanced out of an additional committee. In 2022, voters overwhelmingly approved an increase to the minimum wage by $1.50/yr until it reaches $15/hr by Jan. 1, 2026. The minimum wage after that is to adjust annually based on the Consumer Price Index (CPI). The Republican-led unicameral legislature is making an effort to water that law down and is pursuing legislation that would increase the minimum wage annually by up to 1.5 percent, beginning in Jan. 2027, based on the Midwest CPI. For youth workers (ages 14 and 15), a $13.50/hr minimum wage would increase by 1.5 percent in Jan. 2030 and every fifth year after. It would also adjust the optional 90-day training wage for new workers ages 16, 17, 18 and 19 to $13.50/hr through the end of 2026 and, starting in January 2027, the wage would increase by 1.5 percent each year. So far, the bill has wide Republican support and has garnered a few Democratic votes at each committee stop making final passage likely. There are more than two months remaining in the legislative session. More details.
Washington, D.C. – An emerging coalition led by the Restaurant Association of Metropolitan Washington is organizing an effort to pressure the D.C. City Council to repeal Initiative 82, a ballot measure passed by the voters in Nov. 2022 that eliminates the tip credit by 2027. The tipped wage is currently at $10/hr and scheduled to jump to $12/hr July 1. It is unclear whether the political will exists on the council to repeal the law, but the industry is doing an effective job documenting harm since the law was enacted and there may be some room for legislative relief. More details.
Paid Leave
Nevada – Legislation was heard in a house committee to enact a paid leave program for both public and private entities. As introduced, the bill calls for business and local government agencies (state executive branch employees already are covered) with 50 employees or more to provide 12 weeks of paid family leave which would apply to birth, fostering or adoption of a child, military service, receiving treatment for or recovering from a serious illness, taking care of a family member with a critical illness, and for recovery from domestic violence or sexual assault. No votes were taken and the chances for final passage are unclear. More details.
Labor Policy
NLRB – A three-judge panel for the U.S. Court of Appeals issued a favorable ruling for President Trump, staying a recent district court decision that ruled his termination of National Labor Relations Board (NLRB) Member Gwynne Wilcox was unlawful. As such it appears that the Board again is left without statutory quorum, which under the National Labor Relations Act requires at least three members. The panel’s decision is not a final decision on the merits and only stays the district court’s ruling until a final decision on the merits is reached. The panel is scheduled to hear oral arguments on the merits on May 16. However, on April 1, Wilcox filed a petition for initial hearing en banc and for rehearing en banc with the full D.C. Circuit. In court filings, Wilcox told the full D.C. Circuit that the full court should hear her case because the special panel’s opinion rewrote U.S. Supreme Court precedent. According to Wilcox, this “is an extraordinary case justifying initial en banc review of the merits.” More details.
Alabama – Legislation is on its way to the governor that would allow independent contractors to open “portable benefits accounts,” or tax-advantaged accounts, to fund benefit plans. Hiring entities could also contribute to these accounts without the payments being considered evidence of an employment relationship under state law. Under the proposal, contributions made by hiring parties or independent contractors themselves would be deductible on Alabama state income tax returns starting in 2026. Hiring entities could deduct 100 percent of their contributions as business expenses, while contractors could deduct both their own contributions, and any made on their behalf. The governor is expected to sign. More details.
Washington – An additional hearing was scheduled for today in a house committee on senate-passed legislation that would extend unemployment insurance (UI) benefits to workers during a labor strike. An additional discussion will be held in the same committee’s executive session next week. If enacted, Washington would become the third state – after New York and New Jersey – to grant this benefit. Striking workers that have logged at least 680 hours in the past year would become eligible for UI benefits starting the second Sunday after their legal strike begins, following a required one-week waiting period. As written, claimants would receive an average weekly benefit of $757 in fiscal year 2026, for up to four weeks, with payments determined by their employer’s experience rate. The bill also removes disqualifications for workers affected by employer-initiated lockouts in multi-employer bargaining disputes. More details.
Los Angeles, CA – The city council passed a motion to further study the merits of a proposed ordinance regarding mandated scheduling as well as workers’ rights training. While no timetable was given, it could lead to a more formal process later in the summer. While labor advocates applauded the outcome, the council is very divided on the issue, and this could be seen as a delaying tactic to push the issue further down the road. More details.
Labor Activism
Baltimore, MD – One Fair Wage has announced a rally at city hall next week to celebrate the reintroduction of an ordinance to eliminate the tip credit in the city. Similar legislation was unsuccessfully introduced in Jan. 2024 and for the last two years at the state legislative level. City Councilman Kristerfer Burnett is the featured speaker. More details.
Key Takeaway
- As No Tax on Tips legislation continues to be discussed in Congress as well as in numerous state capitals, other industries will likely work for inclusion in many of the bills. This week, the Wall Street Journal ran a piece describing how Uber and DoorDash are pressuring Republican lawmakers to include independent contractors who drive for them as covered employees in any final package. If they were to be included, that could have meaningful negative ramifications for the industry. To start, it would significantly increase the fiscal price tag of the legislation making it more difficult to pass. Additionally, it could improve the relative financial strength of the delivery platforms giving them increased leverage in their dealings with various brands and independent operators. And lastly, as Uber and Lyft and other transportation network platforms have continually wrestled with safety and other crime-related issues, our industry stands the risk of unfairly sharing some of their reputational baggage. Industry leaders, especially at the state level, need to be vigilant and ensure that legislation, conceived to help restaurant workers, continues to stay focused on those same restaurant workers.