Wages
Arizona – One Fair Wage has withdrawn its ballot initiative that would raise the minimum wage and eliminate the tip credit in response to an Arizona Restaurant Association lawsuit. The development is a huge win for the industry and follows a similar outcome in Ohio where One Fair Wage also failed to meet signature gathering requirements. In Arizona, One Fair Wage’s local affiliate, Raise the Wage Arizona, submitted more than 350,000 signatures (255,949 are required) but the state association asserted that many were legally invalid. As the court was set to rule on the matter, One Fair Wage withdrew the measure, admitting it did not have enough valid signatures. An industry-backed counter measure, which is also facing legal challenges, still may appear on the ballot. The constitutional amendment, if passed by the voters, would set a tip credit of 25 percent going forward. More details.
Albuquerque, NM – The city council heard a proposed ordinance to align the city’s minimum wage rate, which is $11.10/hr, with the state minimum wage rate of $12/hr. Because the state rate is higher, it is already the prevailing minimum wage in Albuquerque. An amendment was offered to also align the server wage with the state’s as well, but that would mean a significant reduction in the server wage from the city’s mandated $7.20/hr to the state’s current server wage level of $3/hr. The sponsor of the original ordinance tried to withdraw her measure but the council voted that effort down and will discuss the proposal at the next city council meeting, Aug. 19. More details.
Glendale, AZ – A Superior Court judge ordered the city to process a ballot initiative that it had rejected on constitutional grounds. The initiative, dubbed the Hotel and Event Center Minimum Wage and Wage Protection Act, was backed by the Worker Power political action committee and turned into the city with 8,900 petition signatures — almost 50% more than the required number. The proposed law establishes a $20/hr minimum wage baseline for hotel and event center employees and outlines details for yearly pay increases and overtime earnings, among other provisions. It would cover employees of any hotel within city boundaries as well as workers at event centers larger than 20,000 square feet. This includes concert halls, stadiums and convention centers. Last month, the city clerk rejected the measure, claiming it violated the Arizona Constitution’s single-subject rule, which requires proposed ballot initiatives to address only a single issue and express those issues in its title. Worker Power sued, arguing that the initiative complied with the single-subject rule and requesting a preliminary injunction to force Glendale to process the initiative for the November ballot. The judge agreed, ruling that the initiative “embraces ‘one general subject'” as the single-subject rule requires. More details.
Seattle, WA – City Councilmember Hollingsworth has decided to withdraw a bill she introduced just a week ago which aimed to slow the city’s minimum wage increase for small businesses next year. The decision follows significant backlash from those who wanted to see the law enacted as is. Critics accused Hollingsworth of betraying low-wage workers and breaking a decade-old agreement. Seattle’s minimum wage deal was a significant agreement between business and labor leaders. The deal, struck in 2014, established a phased-in approach to raising the minimum wage to $15/hr. For businesses with 500 or fewer employees, there was a 10-year phase-in period, allowing them to credit tips and benefits towards the minimum wage. This effectively meant these smaller businesses could pay a lower rate compared to larger businesses. This phased approach was designed to give smaller businesses more time to adjust to the higher wage requirements. However, this credit is set to expire next year, which will eliminate the two-tier system and result in a more than $3/hr increase in the base pay rate for many establishments. More details.
Tompkins County, NY – The county commission voted 11-3 in favor of a resolution to explore an increase to the minimum wage. New York’s minimum wage increased on Jan. 1 to $16/hr in New York City, Westchester, and Long Island, and to $15/hr for the rest of the state. Cornell’s School of Industrial and Labor Relations projected a $18.45/hr living wage in the county, an increase of 10 percent since 2022. According to the study in 2023, roughly 19,000, or about 40 percent, of workers in the county earned less than $18.45/hr. More details.
U.S. Bank – The company is raising its minimum wage to $20/hr effective Nov. 1. It’s the second time the Minneapolis-based bank has adjusted it this year. It previously bumped its starting wage in June to $18/hr, up from $15/hr, which improved pay for about 10 percent of its workers. The bank is also providing a 3 percent increase to the base pay for about 35,000 hourly and salaried employees – or about half of its workforce. The increases will affect branch, call center, and operations center workers in the U.S. More details.
Labor Policy
EEOC – The Equal Employment Opportunity Commission (EEOC) plans to furlough all employees for a day this month because of a budget shortfall. The agency issued the surprise furlough notice last week to roughly 2,200 employees, telling them they must take up to eight hours of unpaid leave on Aug. 30. It blamed “mandatory and inflationary budget increases” that didn’t mesh with Congress keeping the commission’s funding at 2023 levels. More details.
Massachusetts – The governor signed legislation mandating businesses with 25 or more employees disclose salary ranges when posting a job. The legislation would also protect a worker’s right to ask their employer for the salary range for a position when applying for a job or seeking a promotion. The state is now the 11th to mandate pay transparency. Proponents said the bill builds on a 2016 state law which prohibited wage discrimination based on gender. More details.
Taxes
U.S. Senate – The broad tax bill that passed the House in Jan. with overwhelming support finally reached the U.S. Senate floor but a vote this week to end debate failed 48-44, largely on party lines. The Tax Relief for American Families and Workers Act (HR 7024) was the result of negotiations between U.S. House Ways and Means Chair Jason Smith (R-MO) and U.S. Senate Finance Chair Ron Wyden (D-OR). It passed the U.S. House 357-70, but has had a difficult path in the U.S. Senate. When it came time for a U.S. Senate floor vote, only three Republicans voted in favor: Senators Josh Hawley (R-MO), Markwayne Mullin (R-OK), and Rick Scott (R-FL). If passed, the bill would have restored two key tax deductions through 2025. No further action on tax relief is expected before the Nov. election. More details.
Key Takeaway
- The outcome in Arizona is a resounding victory for the industry, particularly following a similar result in Ohio. Across those two states, tens of thousands of units will now be spared from a minimum wage increase and the elimination of the tip credit, at least for the time being. The industry in those states is blessed with competent and effective leadership while our detractors, quite frankly, are not. Their unforced errors and general incompetence were largely to blame for the outcomes in both jurisdictions. While the victories are cause for celebration, a slightly more competent effort by our opponents would have placed measures that poll well on the ballot. Other SRAs should take note of the approach of both the Ohio and Arizona associations and their tactics – such as pursuing counter measures – and begin preparing now for future engagements.
Podcast
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