Wages
Michigan – Next week, the Michigan Court of Appeals will consider if the legislature had the authority to amend a 2018 minimum wage ballot initiative passed by the voters. No ruling is expected at the hearing. While the business community continues to fight the implementation of the 2018 requirement, Democrats are poised to take control of both legislative chambers next year and are likely to pick up the issue early next year. For background, earlier this year a state court ruled that the legislature violated the state’s constitution when it significantly amended voter-approved minimum wage and paid sick leave ballot initiatives. At that time (in 2018 just prior to the election), the Republican-controlled legislature utilized an “adopt and amend strategy,” under which they passed as legislation the ballot language and then after the election the legislature significantly amended them. The judge ruled that such practices diminish the people’s ability to initiate laws which he says violates the state’s constitution. If ultimately implemented, the provisions call for an increase in the minimum wage to $12/hr and then annually adjusted for inflation thereafter. It also calls for an immediate adjustment in the cash wage for tipped employees to $9.60/hr (80 percent of minimum wage), adjusting to 90 percent in 2023, and then full elimination of the tip credit by 2024. With regard to the paid leave provisions, all employers would be required to provide 1 hour of paid sick leave for every 30 hours worked (capped at 72 hours for employers with more than 10 employees and capped at 40 hours for employers with less than 10 employees). More details.
Paid Leave
Vermont – After a three-year search, the state has reached an agreement with a private insurer, The Hartford, to administer the state’s paid leave program for state employees and its voluntary program for private employers. Vermont’s paid family and medical leave policy is set to roll out in three phases. Benefits will start for state employees beginning July 1, 2023. A year later, the program will be extended to private and public employers with two or more employees. And in 2025, employers with just one employee, as well as individual workers and self-employed Vermonters, will be able to join. The legislature must still approve the appropriation necessary to let the voluntary plan move forward, but they are not expected to scuttle the deal brokered by the administration. More details.
Labor Policy
U.S. House – House Education & Labor Committee Ranking Member Virginia Foxx received a waiver from the Republican Steering Committee to remain the lead Republican on the committee. The move likely paves the way for her to become Committee Chairman when the new Congress is seated next month. Republican leadership have set term limits for committee assignments within their caucus but have often provided waivers for senior members to remain in their posts. This is important to the industry as she has been the leading voice on defending the current joint employer rule, advocating stringent oversight on the National Labor Relations Board (NLRB), and been a staunch defender of the franchise business model. More details.
NLRB – The NLRB closed the public comment period for its proposed joint employer rule which would establish two or more employers as joint employers if they “share or codetermine” key employment conditions such as pay, scheduling, workplace safety, and employee discipline policies. That includes indirect and reserved authority over those terms and conditions. The NLRB proposal would overturn the Trump-era effort to enshrine a stricter “substantial, direct, and immediate” control over employment conditions in order to qualify as a joint employer. Over 11,500 public comments were filed. More details.
Nondisclosure Agreements – The president signed into law the Speak Out Act. The new law bars the use of nondisclosure agreements, or NDAs, related to sexual harassment or assault. The new law (among the workplace changes pushed in the wake of the #MeToo movement) would make existing nondisclosure agreements unenforceable. It also would apply to any agreements between providers of goods and services and their customers. More details.
California – A coalition of restaurants, known as Protect Neighborhood Restaurants, submitted more than one million signatures (roughly 600,000 signatures were necessary) to refer the FAST Act to the 2024 ballot. As such, the law will be suspended until voters can decide on the measure. The coalition is supported by the International Franchise Association, the National Restaurant Association, and numerous other small businesses and organizations. The new law would have established a panel with members appointed by the governor and legislative leaders composed of workers, union representatives, employers, and business advocates. Among many powers related to setting workplace standards, the panel would be able to set hourly wages of up to $22/hr for fast food workers starting next year and can increase them annually by the same rate as the consumer price index (up to a maximum of 3.5 percent). More details.
Pennsylvania – As a likely precursor to legislation next session, the Joint Task Force on Misclassification of Employees, a panel commissioned by the state Department of Labor & Industry, estimated that nearly 50,000 employers in the state misclassify their workers. It called for an expansion of a state law that currently applies to the construction industry, adoption of a uniform test to differentiate employees versus independent contractors, and stiffening penalties for employers that misclassify workers. During the legislative process, a potential bill such as this could be broadened to include language on joint employer issues as well. More details.
Amazon – Washington, DC Attorney General Karl Racine sued the company over its tipping practices alleging the company deceived both customers and delivery drivers over how it handles tips. Racine says that among other things, the company encouraged consumers to tip their delivery drivers, offering a default preselected tip amount and assuring consumers that 100 percent of the tip amount would go to the drivers. In 2016, Amazon changed its driver payment model so that a large portion of these tips did not go towards increasing drivers’ compensation but were instead used to pay a portion of what Amazon had already promised to pay the driver. He further alleges that the company implemented a widespread campaign, both internally and externally, to hide the truth about their tip policy from both consumers and workers, going so far as to change their app so drivers no longer saw amounts tipped. Racine only has a few weeks remaining in his term and it’s unclear if the new, incoming attorney general will pursue the case. More details.
McDonald’s – The Labor Department’s Wage & Hour Division has charged a 13-unit McDonald’s franchisee in the Pittsburgh, PA area with numerous child labor law violations. According to the department, a federal investigation found that 101 minor-aged employees worked outside of hours permissible by the Fair Labor Standards Act. According to the agency, the franchisee allowed 14-and-15-year-old employees to work more than three hours per day and after 7PM on school days; later than 9PM on days between June 1 and Labor Day; more than eight hours on non-school days; and more than 18 hours a week during regular school weeks. All of these schedules violate federal law. Investigators also found one Pittsburgh-area restaurant in violation of child labor occupations standards by allowing a minor to operate a deep fryer. The company is the latest in a string of national brands that have run afoul of child labor standards this year alone. More details.
Labor Activism
Applebee’s – One Fair Wage commenced a pressure campaign against the company demanding the end of tipping in their restaurants. Among the tactics employed include delivering letters of complaint to Applebee’s managers, threats of public revealing of workplace practices, asserting that employees in predominantly white neighborhoods make more money than other employees, and potentially seeking legal action either at the NLRB or in court. The group has been running an unsuccessful similar effort against Darden Restaurants for years. More details.
Burgerville – Workers at a sixth location of the regional burger chain filed a petition for election with the NLRB. Workers at the Powell store first announced their union interest in Sept. and demanded voluntary recognition from company management. The company declined voluntary recognition, spurring the NLRB filing. An election date has not yet been set but the proposed bargaining unit would cover all 37 non-management workers at the store. Five other units voted for unionization in 2018 and 2019. More details.
Study – According to an analysis by NPR, the hospitality and food services industry makes up 27.5 percent of all union election petitions compared to fewer than 4 percent of union election petitions ten years ago. Experts cited the ease at which workers can now connect with each other over cell phones and social media platforms as a major factor but also note that a labor-friendly administration in the White House, a Democratic majority on the NLRB, and a strong labor market have also contributed. More details.
Delivery
Chicago, IL – UberEats & Postmates have agreed to a nearly $10 million settlement with the city of Chicago over what authorities there called “deceptive practices”, namely that restaurants were listed without their consent and were charged excessive fees, according to a two-year investigation by the city. Among other accusations in the settlement were that the platforms violated the COVID-era 15 percent delivery fee cap, and commissions were charged in excess of the limits set by the city. More details.
Key Takeaways
- With Vermont’s state paid leave program now a reality, their approach, similar to that of neighboring New Hampshire, provides the business community with an operational and political blueprint for how to effectively approach the issue. Both states have passed paid leave laws, with Republican governors leading the way, that create meaningful market-based programs that don’t place significant burdens on the employer community. Both states are politically moderate by any measure and while the programs don’t satisfy all sectors of the political left or right, they are mainstream common sense solutions to address a legitimate problem for both employees and employers. The business community should aggressively export this model to other states in 2023.
- This week marks the one-year anniversary of the first Starbucks location choosing to unionize. After a one-year cooling off period, locations can choose to decertify the union, adding a new dynamic to the ongoing campaign. Expect the campaign to intensify in its second year as the company presses to decertify locations, and the union attempts to force concessions from the company through the bargaining process.
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.