State of the Union
Biden Administration – During the annual address before Congress this week, the President spent significant time on workplace and workforce-related issues. In fact, he went so far as to say “for too long, workers have been getting stiffed. But not anymore. We’re beginning to restore the dignity of work.” With that he laid out numerous proposals including raising the federal minimum wage, calling for expanded paid and medical leave, once again endorsing the PRO Act, eliminating non-compete agreements, and reforming immigration. While none of these proposals are likely to advance very far, it is indicative of the White House’s continued allegiance to the labor community’s agenda. More details.
Wages
Illinois – Legislation has been introduced to eliminate the tip credit by 2026. The sponsor, a fairly junior Democrat from Chicago, has been active in the education space and served with the Latino Policy Forum’s Education Department as well as being appointed by the governor to the state’s Board of Education in 2019. Illinois is one of a growing number of states with similar legislation this year as a result of One Fair Wages’ national campaign to eliminate sub-minimum wages. More details.
New Hampshire – A senate committee heard legislation that would establish a state minimum wage of $13/hr by Sept. 1, 2023, and then $15/hr by July 1, 2024, as well as eliminate the tip credit. New Hampshire has no state minimum wage and abides by the federal minimum of $7.25/hr. More details.
North Dakota – The house overwhelmingly rejected legislation that would have raised the state’s minimum wage to $9.00/hr and continue to increase $.25/hr every year thereafter. More details.
Paid Leave
Hawaii – A house committee unanimously approved legislation that establishes within the Department of Business, Economic Development, and Tourism a pilot paid leave program. The two-year program would provide grants to help small businesses offer their employees paid family leave and paid sick leave. The bill now moves on to additional house committees. More details.
Labor Policy
Labor Department – Secretary Marty Walsh is likely to step down from his post to assume the leadership of the National Hockey League Players Association, the union representing the rosters of all 32 NHL teams. Walsh previously headed up the Building and Construction Trades Council in Boston. Walsh is set to leave with several pivotal regulations still in the works at the Labor Department. Those include a proposed rule, initially expected months ago, that would expand the number of workers eligible for overtime pay, and a final rule redefining which workers qualify as independent contractors. His potential departure leaves Deputy Labor Secretary Julie Su, who oversaw the rollout of California’s divisive gig work law, as the agency’s likely acting head. That law, AB-5, established a new three-part test that redefined many of the state’s gig workers as employees. More details.
New Jersey – The governor signed a controversial bill known as the “Temporary Workers Bill of Rights” that seeks to equalize the compensation of temporary workers with that of regular employees, increase transparency requirements, and restrict placement fees paid to staffing agencies or firms. Key to the law, covered temporary workers are to be paid no less than the average rate of pay and cost of benefits provided to regular employees of the employers in similar positions with similar skill requirements, responsibilities, and working conditions. This could theoretically allow temporary workers to receive greater take-home wages than regular employees. While not directly affecting restaurants, the new law is indicative of the current trend of attempting to disincentivize employer’s reliance on independent contractors. More details.
Labor Activism
REI – After workers at an Ohio store staged a walkout last week, the company agreed to allow them to take a vote to join the Retail, Wholesale, and Department Store Union (RWDSU), ahead of a National Labor Relations Board (NLRB) hearing. If the workers vote to join the RWDSU, it would be the third unit in the chain to organize. The vote will take place on Mar. 3. More details.
Starbucks – Sen. Bernie Sanders, who chairs the Senate Health, Education, Labor, and Pensions (HELP) committee, officially invited Starbucks CEO Howard Schultz to testify before his committee. The letter, co-signed by all of the committee’s Democratic members, noted that the hearing “will focus on Starbucks’ compliance with federal labor laws.” Sanders had previously voiced his “grave concern about reports that Starbucks is engaging in illegal union-busting tactics in an attempt to intimidate its employees and dissuade them from organizing and joining unions” and called out the company for its “unethical and unlawful anti-union activities.” It is unclear if Schultz will appear. More details.
Starbucks – An administrative law judge ruled that the company violated the National Labor Relations Act (NLRA) and had to reinstate a previously terminated employee at a Denver store (which had voted to unionize in May 2022) and to also expunge warning letters from the records of two other employees. The judge found that Starbucks had violated the NLRA in multiple instances including when a store manager interrogated employees about their support of the union, threatened employees with loss of wage increases and promotions if they voted for the union along with a district manager, and threatened to call the police on employees. Two employees were issued written warnings in Feb., one of whom was fired in April. More details.
Delivery
San Francisco, CA – As a result of the deal worked out between the city and third-party delivery firms DoorDash and Uber Eats, as of Feb. 1, the 15 percent commission fee cap on deliveries has sun-setted and is no longer in effect. In June 2021, months after the controversial Proposition 22 was enacted in California, the San Francisco Board of Supervisors unanimously passed a bill that limited food delivery apps to a 15 percent cap on delivery commissions. San Francisco was the first city in America to pass such legislation. A month after the bill was passed, the delivery companies sued the city regarding the legislation, arguing that capped fees harm consumers and violate both the U.S. and California constitutions. Nearly a year later, in July 2022, the San Francisco Board of Supervisors reversed course and came to an agreement with the delivery companies that ended the 15 percent commission fee cap on Jan. 31, 2023. More details.
Scheduling
Colorado – Next week, a house committee will vote on legislation mandating employers provide schedules 14 days in advance, at least 12 hours of rest time between shifts, and offer more hours to part-time workers before hiring new ones. Additionally, employers must provide a worker an hour of “predictability pay” when they add time to a shift or change the location, and two hours salary if they reduce the work time. More details.
Evanston, IL – The city council delayed a vote on a proposed restrictive scheduling law. After strong criticism from members of the business community, who questioned the basis for the new requirements, Human Services Committee members voted unanimously to table any further action until their March 6 meeting. More details.
Sustainability
Washington – Next week, a house committee will hear pending Extended Producer Responsibility (EPR) legislation. If passed, the bill would create a product stewardship program for packaging and printed paper, including recycling and reuse targets, accurate labeling provisions and requirements for post-consumer recycled content in plastic tubs, thermoform containers (e.g., clamshells), and single-use cups. Additionally, the bill includes a “bottle bill” provision whereby consumers would pay a 10 cent fee on beverage containers and then redeem the 10 cents at drop locations. More details.
Key Takeaways
- Restrictive scheduling has reemerged as a priority issue for the labor community. Issues around scheduling have been central to labor organizing efforts since the pandemic but that energy hasn’t translated into major legislative pushes, until recently. As the industry grapples with a number of other business model issues, 2023 could also be the year when restrictive scheduling bills move in a number of jurisdictions.
- This week, with the strong encouragement of labor community activists, Sen Elizabeth Warren (D-MA), along with five other Democratic senators, sent a letter to National Restaurant Association CEO Michelle Korsmo, demanding answers regarding the ServSafe program and parroting accusations that the program is designed to raise funds from industry employees that are then allocated for the Association’s political agenda. For context, a recent New York Times article ran attacking the program mission, purpose and effectiveness but it has been viewed by most observers as little more than a hit piece egged on by activist organizations like One Fair Wage and others. Brands should, however, understand the connectivity and orchestrated cadence of all of these moving parts – negative front page stories, followed by One Fair Wage press events announcing their intent to eliminate the tip credit in as many states as possible, and then followed further by the escalation of public pressure by their allies in elected office. The industry is in for a protracted reputational and legislative slugfest unlike anything it has seen previously and brands should prepare accordingly.
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.