Wages
Minnesota – The state announced that effective Jan.1, the minimum wage will increase by 2.5 percent or twenty-six cents to $10.85/hr. Other state minimum wages, including the small-employer, youth, training wages, and the summer work travel exchange visitor program wage (all of which are currently $8.63/hr) will increase by twenty-two cents to $8.85/hr. The definition of large employers is any company with annual gross revenues of at least $500,000. The training wage rate of $8.85/hr may be paid to employees under the age of 20 for the first 90 days of their employment. The youth wage rate of $8.85/hr may be paid to employees under the age of 18. The state has no tip credit law. More details.
Montgomery County, MD – Legislation will soon be introduced to eliminate the tip credit. The sponsor has indicated that the proposed legislation will phase it out incrementally, raising the tipped minimum wage with a bump to $4/hr and then $8/hr in July of next year. That would be followed by $2 yearly increases until 2028. Maryland’s current minimum wage is $13.25/hr but the server wage has been frozen at $3.63/hr. Industry engagement is important, and the policy discussion could spill over to neighboring Prince George’s County. More details.
Evanston, IL – A city council subcommittee unanimously voted to table a proposed ordinance to increase the minimum wage and eliminate the tip credit in the city. In May, the proposal was introduced which would establish a minimum wage of $15.50/hr for smaller employers (four to 50 employees) and $16.25/hr for largers employers (51 or more employees). It would begin July 1, 2024 with annual increases beginning in 2025. The ordinance also would eliminate the cash wage for tipped workers. The city currently follows Cook County’s wage law which is $13.70/hr and $8.00/hr for tipped employees. The proposal received significant pushback from the business community causing the postponement but will likely be revisited at the council’s next meeting in Oct. During testimony, national labor activist Saru Jayaraman, head of One Fair Wage, told Evanston council members that the issue is “a done deal” in neighboring Chicago and that Evanston will lose jobs to Chicago if they don’t act to eliminate the tip credit as well. “Chicago already has the votes to pass this on Oct. 4,” Jayaraman said. More details.
Minneapolis, MN – The mayor vetoed an ordinance that would have guaranteed a minimum wage for Uber and Lyft drivers within the city limits. If passed, drivers would have gotten at least $1.40 per mile and $0.51 per minute, or $5, whichever is greater. The rule would have only applied for the portion of each ride within the city. It would also guarantee riders and drivers are provided receipts, detailing how much the rider was charged versus what the driver received. Instead, the mayor negotiated an agreement with Uber that drivers picking up passengers in Minneapolis or driving within the city will make the city’s minimum wage of $15/hr. The company also committed to paying Uber drivers at least $5 for any trip in the metro area. Lyft is not covered by the deal and it is unclear whether the city council will move toward a veto override. More details.
Labor Policy
NLRB – The National Labor Relations Board (NLRB) is pushing out a number of extremely consequential decisions and new rules ahead of the expiration of Board Member Gwynne Wilcox’s term on Aug. 27. (She is expected to be reconfirmed to the seat but, at a minimum, there will be a gap in her appointment.) Two new developments related to union recognition and election procedures will immediately impact employers, a ruling in a Cemex decision that will overturn decades of precedent related to union recognition and the return of “quickie” or “ambush” election rules. First, the Board’s Cemex decision creates a new framework that allows unions to represent workers before a union vote is held. Similar to the concept of “card check,” once a union earns the support of a majority of workers, an employer must recognize the union as a representative of those workers. The employer may file an election petition and trigger an election to, in effect, dispute that the union can represent workers. Additionally, the board reversed the Trump-era standard related to union election rules. The new rule returns to the procedures put in place in 2014 under the Obama administration’s so-called quickie or ambush election rules. More details.
New Jersey – The state issued stop-work orders to 27 Boston Market locations, citing alleged wage violations. The state’s labor department said it received nearly three dozen complaints about the locations and an investigation revealed a variety of issues including: unpaid or late wages; hindrance of the investigation; failure to pay minimum wage; records violations; failure to pay earned sick leave, and; failure to maintain records for earned sick leave. The employer owes more than $600,000 in back wages to 314 workers and more than $1.2 million in liquidated damages. Additionally, the company will owe more than $700,000 in administrative fees and penalties. More details.
Wisconsin – Legislation has been introduced that would allow children ages 14 and 15 seek employment without a work permit or parental permission. Under current law, 14- and 15-year-olds in Wisconsin are prohibited from working most jobs unless they have permission from a parent or guardian and have verified their age with the state labor department. The department can revoke youth work permits at any time if it believes a child’s safety is being threatened. However, if the bill were to pass, Democratic Governor Tony Evers is unlikely to sign the legislation into law. There is also pending legislation to allow 14-year olds to serve alcohol in bars and restaurants. More details.
New York, NY – Fast-food chains Panda Express, Au Bon Pain, and 7-Eleven’s Raise the Roost agreed to pay a combined $4.5 million to nearly 2,400 workers to settle charges they violated provisions of New York City’s Fair Workweek Law, which requires fast-food employers to provide workers with regular schedules. All three companies were charged with: failing to obtain workers’ consent when adding hours to their schedule; not paying them premiums for schedule changes, and; not giving them the opportunity to work more regular hours before hiring new employees. The companies also failed to provide workers schedules 14 days in advance and did not receive consent before requiring employees to work “clopening” shifts, i.e., closing a location at night and returning first thing in the morning to open it. The chains will also pay a combined $417,000 in civil penalties, with Panda Express due to pay more than $8,000 in back pay to one worker who was allegedly fired in retaliation for exercising his rights under the law. More details.
Darden – A federal judge in California ruled for a second time that One Fair Wage lacks standing to pursue their 2020 lawsuit against the company claiming that the company discriminates against female and minority servers by requiring them to depend on tips. The judge ruled again that the advocacy group had not shown that the tipping policy at Darden caused any injury to the group that would allow it to proceed with the 2020 lawsuit. One Fair Wage is leading the national effort to eliminate tipping and has mostly pursued their agenda legislatively in state legislatures and city councils throughout the country. The lawsuit against Darden is part of an ongoing corporate campaign due to their market position. More details.
Labor Activism
Hooters – The Equal Employment Opportunity Commission (EEOC) filed a lawsuit against the company alleging it violated federal law when it failed to recall employees after a COVID-related layoff because they were Black and/or had dark skin tones. In March 2020, a unit in Greensboro, NC laid off approximately 43 employees in response to the COVID-19 pandemic. The EEOC’s lawsuit alleges that a class of employees who were Black and/or had dark skin tones and worked as “Hooters Girls” at the Greensboro restaurant were among those laid off. When the restaurant began recalling employees to return to work in May 2020, the restaurant recalled mostly employees who were White or had light skin tones, the EEOC says. The commission seeks monetary relief for the employees, including back pay, and compensatory and punitive damages. It also seeks injunctive relief against the company to end any ongoing discrimination and to prevent such unlawful conduct in the future. More details.
Sustainability
Delaware – The governor signed legislation passed earlier this spring prohibiting food establishments from giving customers beverages or ready-to-eat food in polystyrene foam containers. Single-use plastic drink stirrers, cocktail picks, and sandwich picks also will be prohibited. Plastic straws will be available if they are requested by customers and restaurants will still be allowed to offer plastic forks, knives, and spoons to customers. The new law takes effect July 1, 2025. More details.
Key Takeaways
- The NLRB’s Cemex decision (which will certainly face legal challenges) fundamentally changes labor relations for all employers and is a massive victory for unions. Under this standard, employers will have to be much more proactive in how they communicate with their workforce about unionization. Oftentimes, employers don’t communicate with workers about unionization until a campaign is underway, or an election petition has been filed. Under this new rule, that will be too late. In many cases, the union will have already become the authorized bargaining agent (once it earns the support of a majority of employees). Expect many employers (particularly in union heavy industries) to now discuss their union-free culture as part of the hiring and onboarding process with employees. If this standard survives the coming court challenges, it will be wildly easier for unions to organize. Employers main redress will be to file for a representative union election which will now be governed by the Board’s new ambush election rules.
- Many brands are concerned about the preservation of the tip credit in Chicago; however, it is important to note that One Fair Wage, the activist organization behind the effort headed by Saru Jayaraman, is actively engaging in other markets as well. In fact, this week alone, One Fair Wage activists attended in force a mayoral debate in Hartford, CT, retained lobbyists in Colorado, and began actively recruiting for a campaign head in New England. They are gearing up for a multi-state and city assault and the industry needs to respond with an equally expansive national effort.
Podcast
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