Wages
Missouri – Business groups, led by the Missouri Chamber of Commerce and Industry as well as the Missouri Restaurant Association, are seeking to invalid a voter-approved minimum wage increase and paid leave mandate. The trade groups this week filed an election challenge asking the state supreme court to set aside the results of Proposition A which 57 percent of voters approved last month. The new law will increase the state’s minimum wage from the current $12.30/hr to $13.75/hr in Jan. and to $15/hr in 2026. It also gives workers up to seven paid sick days per year starting in May. The lawsuit raises a series of issues, including an allegation that Proposition A violated the state’s single subject requirement and that the measure’s summary statement and fiscal note summary (the estimates of how much the measure would impact government funds) were misleading. More details.
Los Angeles, CA – Under pressure from UNITE-HERE and the SEIU, the city council voted 12-3 to increase the minimum wage and improve health care benefits for hospitality and airport workers ahead of the 2028 Summer Olympics. Under the proposal, the ordinances would be amended to boost hourly wages to $22.50 an hour by Feb. 1, 2025, increasing to $25/hr by 2026, $27.50/hr by 2027, and $30/hr by 2028. Workers would also receive a health care benefit of $8.35 on a weekly basis, which takes into account the average cost of health care divided by the hours an employee works. More details.
Labor Policy
U.S. Senate – The U.S. Senate blocked Lauren McFerran’s renomination to the National Labor Relations Board (NLRB), opening the door for Republican control of the board starting next year under President-elect Trump. Senators voted 50-49 against a five-year term for McFerran, the NLRB’s chair, with Independent Sens. Kyrsten Sinema and Joe Manchin voting with almost every Senate Republican to block it. Sen. Roger Marshall, who was absent due to a medical procedure, was the lone Republican who did not vote. Trump and Republicans will now have the ability to confirm two nominees to the Board in early 2025, giving them a one-seat advantage at that time. Including McFerran, the Board currently sits at three Democrats and one Republican, with one GOP vacancy. More details.
NLRB – A D.C.-based federal judge ruled that National Labor Relational Board (NLRB) administrative law judges (ALJs)are unconstitutionally shielded from being replaced, marking the first major decision targeting the agency’s structure outside of the conservative 5th Circuit. Judges at the NLRB, who hear cases and issue decisions that can be appealed to the five-member board, are protected by statute from removal unless they commit “willful violations” of federal law. Additionally, those judges derive authority from the board, whose members the president cannot remove except for “neglect of duty or malfeasance in office” which is, to date, an untested standard that some businesses and conservative groups are contesting. Judge Trevor McFadden, a Trump appointee, wrote that those overlapping removal protections violate the Constitution’s separation-of-powers doctrine by usurping the president’s authority over the executive branch. The judge also wrote that he believes that the ALJs’ removal protections can be stripped without upending other parts of the NLRB’s structure. So far, the Board has not commented on the decision. More details
Misc.
FTC – President-elect Trump named Andrew Ferguson to lead the Federal Trade Commission (FTC), installing a current Republican member of the agency. Ferguson has promised to lessen the regulatory burden on companies but is expected to target large technology platforms over free speech issues. More details.
FTC – The agency sued the country’s largest alcohol distributor for illegal price discrimination, alleging that it has charged “drastically higher” prices to small “mom and pop” businesses than big chain stores. Southern Glazer’s Wine and Spirits has been “intentionally and illegally providing steep discounts without any market justification to a specific set of retailers,” according to a press release from the FTC. The suit hinges on an obscure 1936 law, the Robinson-Patman Act, which makes it illegal to engage in price discrimination. The law was originally enacted in order to protect smaller businesses at a time when new chain stores were opening throughout the country. It has been at least two decades since there has been public enforcement of the Act. More details.
Corporate Transparency Act – A federal judge in Texas issued an injunction stopping the implementation of the Corporate Transparency Act (CTA), including the collection of Beneficial Ownership Information (BOI). In its decision, the court stated that the CTA likely exceeds Congressional power under both the Commerce Clause and the Necessary and Proper Clause. As a result, the U.S. Financial Crimes Enforcement Network (FinCEN) confirmed that reporting companies – i.e., companies that would be required to report their beneficial ownership information to FinCEN under the Corporate Transparency Act (CTA) and its implementing regulations – are not required to file beneficial ownership reports for as long as the current, nationwide injunction of the CTA remains in effect. Further, FinCEN noted that reporting companies will have no liability for failing to file required beneficial ownership reports during the pendency of the injunction but FinCEN will continue to accept beneficial ownership reports from reporting companies on a voluntary basis. More details.
Sustainability
New York – The governor signed legislation that would expand the state’s organics recycling and edible food recovery requirements for large generators of food waste. The existing law mandates businesses and institutions that generate an average of two tons of food waste per week to donate the edible food and recycle the remaining scraps. The recycling requirement only applies to generators within 25 miles of an organics recycler. The new law shifts that threshold to one ton per week effective Jan. 2026, and half a ton per week effective Jan. 2028. The new law also removes the distance exemption for all generators. New York City is not covered by the current or pending law. More details.
McDonald’s – The Accountability Board (TAB), a group holding an investment portfolio spanning roughly 200 fast food and retail companies, indicated that it had submitted shareholder proposals requesting expanded disclosure of the company’s practices regarding food waste. Both Starbucks and Yum! Brands have freely disclosed information regarding their restaurants’ food waste since 2020, with a stated goal of halving their waste by 2030. It is estimated that food waste produced by restaurants amounts to between 22 billion and 33 billion pounds of food being added to U.S. landfills every year and given the fast food industry’s particular operating model, this subsection of the restaurant business was even more susceptible to overproduction, and thus, undue waste. It is unclear how the company will respond. More details.
Key Takeaways
- The vote this week in the U.S. Senate, rejecting the renomination of NLRB Board Chairman McFerran, ensures that some end is in sight for the non-stop pipeline of union-friendly rules and decisions out of the agency. McFerran’s term ends Dec. 16. Her departure will leave a 2-1 Democrat majority on the Board. After the Jan. 20th Inauguration, President Trump and the new Republican Senate are expected to quickly fill two Republican vacancies on the Board, installing a Republican majority.
- Twenty one states and 48 cities and counties are set to raise their minimum wages on Jan. 1. Other states and a few more cities and counties will raise their wages later in the year. Three states – Illinois, Delaware and Rhode Island – will reach the $15/hr pay base for the first time, joining seven states already there or above it. Meanwhile, 47 localities will also reach or top $15/hr on Jan. 1, including more than two dozen in California, most of which will climb further above $17/hr. At the same time, data continues to surface showing minimal if any job loss from the upward pressure on wages. This week, a researcher at Moody’s Analytics went so far as to say that the minimum pay increases haven’t had a noticeable effect on inflation, in part, because the share of workers at or below the pay floors is small. While there is emerging data on the negative job effects of tip credit elimination, there is painfully little data to rebut the growing consensus around the diminimous impact of general wage increases. The industry needs to address this growing perception.