Wages
Federal Reserve – In remarks before the Brookings Institution, Federal Reserve Board Chair Jerome Powell singled out strong hiring and wage gains as the main driver of inflation. Paychecks, on average, have jumped about 5 percent in the past year, before inflation, the fastest pace in four decades. Powell said the Fed is seeking to increase its benchmark rate by enough to slow the economy, hiring, and wage growth, but not so much as to send the U.S. into recession. More details.
Chicago, IL – With the mayoral election approaching in late Feb., the local Service Employees International Union (SEIU) is pressuring candidates to support a $25/hr minimum wage in the city as a litmus test for their potential support. To date, nearly ten candidates have lined up to take on embattled incumbent Mayor Lori Lightfoot. More details.
Labor Policy
Labor Department– The Biden Administration finalized their proposed rule that empowers retirement plan fiduciaries to consider climate change and other ESG factors when making investment decisions, expanding options for Americans who want their retirement savings to incorporate ESG criteria. The action unwinds a pair of moves made in 2020 under former President Donald Trump that sought to clamp down on the emergence of environmental, social, and governance considerations in investing by limiting decision makers’ ability to focus beyond concerns like risk and monetary return. Though the previous policy did not explicitly bar ESG investing, Democrats and some industry groups have argued it had a chilling effect on fiduciaries and other advisors. Likewise, the new rule does not require factoring in ESG factors but affords more room to do so. More details.
Labor Department – The Senate Health, Labor, and Pensions (HELP) Committee voted 13-9 to advance the nomination of Jessica Looman, who has been serving as the top official of the Wage and Hour Division of the U.S. Department of Labor, to be the permanent administrator of the agency. Looman’s nomination has been held in the committee for several months and will likely now progress to a full vote in the senate before the current Congressional term expires. More details.
Ontario, Canada – The province of Ontario is in the process of developing a portable benefits program for gig economy workers without access to traditional benefits. From now until Dec. 16th, employers have the ability to advise the panel overseeing the process on how portable benefits could impact their business. For context, the consultation process (essentially the Canadian version of our regulatory rulemaking process) stems from a recent review by the Ontario Workforce Recovery Advisory Committee which began their work in June 2021. The Committee was appointed by the Minister of Labour, Training, and Skills Development to help lead Ontario’s economic recovery following the COVID-19 pandemic. In its November 2021 report, the Committee recommended that the Government appoint an expert to design and test a portable benefits program within the province. That process has been underway ever since and we have now entered the “consultation survey” (analogous to U.S. federal comment period) and employers are being encouraged to take advantage of this opportunity for input on the design of the government’s benefits plan. More details.
Mod Pizza – The company announced a new partnership with Guild to provide over 10,000 employees at company-owned locations access to tuition-free college degree programs. The program will include coverage of the full cost of tuition, as well as books and fees for employees looking to earn bachelor’s degrees and professional certificates. The company already has a similar program in place to assist employees in earning their high school diplomas. More details.
Scheduling
Berkeley, CA – The city council passed an expansive “fair workweek” ordinance. In addition to mandating work schedules two weeks in advance, any changes thereafter would mandate employers pay the worker a one-hour “predictability pay” bonus on top of their regular wages. It also allows employees to refuse work assignments that start within 11 hours of their last shift’s end and requires that companies pay them time and a half for the second shift if they agree to it. Restaurants with 10 or more employees in Berkeley and at least 100 workers globally would be covered. The ordinance does not take effect until Dec. 2023. More details.
Los Angeles, CA – The city council passed a “fair workweek” ordinance that gives approximately 70,000 retail workers in Los Angeles expanded rights, including being provided work schedules at least 14 days in advance and mandatory rest periods in between shifts. Restaurant workers are not covered by the ordinance; however, the council could revisit the issue and potentially expand the ordinance at any time. A UCLA study cited in the ordinance found that 80 percent of 140,000 Angelinos who work in retail have unpredictable, last-minute and fluctuating work weeks over which they have no control, with 75 percent receiving less than a week’s notice on scheduling. More details.
Labor Activism
Blank Street Coffee – Employees at a Brooklyn outlet of the New York City-based chain voted to unionize, the first location in the company to do so. The trendy concept is backed by a venture capital firm and relies heavily on automation and is designed to appeal to Gen Z and millennial customers. The brand has recently been the face of “anti-corporate” rhetoric on social media and the unionization effort is largely being seen as an outcrop of that reputational attack. More details.
Little Dog By The Met – Employees at a Brunswick, ME location unanimously voted to join Workers United. The union will represent 10 workers and negotiations for a new contract are expected in the coming weeks. Workers at the popular coffeehouse informed the owner in Sept. of their intention to unionize. They cited concerns about food safety, a lack of transparency, respect from ownership, and unlivable wages as their rationale for organizing. More details.
Peet’s Coffee – Two California outlets officially submitted union cards to the National Labor Relations Board (NLRB) this week, making them the first of the over 300 company locations to do so. Workers United, an affiliate of the SEIU, is leading the effort. Organizers cite “low pay and high-stress demands placed on them by the company.” Peet’s Workers United asked the coffee company to sign a set of pledges it termed “Non-Interference Election Principles,” which would require Peet’s to allow the union to hold meetings in equal length to meetings called by company management to discuss the union. The non-interference principles would also require Peet’s to recognize Workers United as a union through a card-check process, whereby the union submits authorization cards demonstrating support from a majority of workers in an individual store, among other demands. The company has not responded to those requests. More details.
Union of Southern Service Workers – The Service Employees International Union (SEIU) has created a new organizing platform, the Union of Southern Service Workers (USSW), specifically for restaurant employees and other service workers in the South. The SEIU said the new group is reaching beyond the fast-food business to include workers from retailing, healthcare, and warehouses. They hope the broader scope will not only boost membership in the USSW but also allow workers to maintain their membership if they move from one job to another. They are also part of the Strategic Organizing Center which is pressuring shareholders of big QSR chains to accept and work within the fast-food wage-setting process called for in California’s FAST Act. More details.
Delivery
Spokane, WA – Next week, the city council will vote on a proposed ordinance to cap third-party delivery fees at 15 percent. Under the proposal, platforms can still charge more than 15 percent for advertising or any additional services, however, the ordinance requires there be a 15 percent option. More details.
Key Takeaways
- With a number of state legislatures pursuing post-election “lame duck” sessions, brands need to pay close attention over the next few weeks. In particular, Michigan may revisit wage legislation, Ohio may significantly alter its rules regarding ballot questions and constitutional amendments, and Illinois may enact major increases in unemployment insurance premiums employers have to pay, just to name a few. While lame duck sessions can be very short in duration, sometimes just a few days, important legislation affecting the business model can be enacted. During this period, negotiations can happen quickly and often don’t go through the normal, extended legislative process. Brands need to maintain vigilance.
- While the industry is preparing to manage FAST Act-copycat bills in a number of states next year, many of those potential target states, namely New York, Illinois and New Jersey, are full-time, year-round legislatures. As such, legislation tends to move much more slowly through the process giving both advocates and proponents of legislation time to organize. One of the states most vulnerable to this type of legislation next year is Washington. Unlike the other states noted above, Washington’s legislative session begins the first week of January and adjourns in mid-April and thus provides a very small window of time for the industry to organize adequate opposition to a potential bill. The industry needs to be using these few weeks leading up to January to adequately prepare for what will likely be a tough legislative fight.
Podcast
Check out our Working Lunch podcast each week that includes further analysis into these legislative issues, policy, politics and much more. You can find Working Lunch on the Restaurant Business online website, SoundCloud, iTunes and Spotify.