Wages
Maryland – A senate committee heard legislation that would eliminate the tip credit by 2027. No vote was taken but there was an overwhelming turnout from restaurant servers refuting the rationale for the legislation and the arguments of One Fair Wage. Similar legislation was introduced and defeated last year. The bill also includes a provision requiring the state labor commissioner to establish the High Road Kitchen Program as a recognition program for restaurants that have voluntarily opted to not utilize the tip credit. This is a program that is oft-promoted by One Fair Wage. More details.
Oklahoma – The state supreme court heard oral arguments on a lawsuit brought by the Oklahoma State Chamber and Oklahoma Farm Bureau Legal Foundation asking the court to declare the pending petition to raise the minimum wage legally insufficient. They argued that a portion of the petition violates the state constitution and that the proposed wording of the ballot initiative is misleading. The ballot initiative would raise Oklahoma’s minimum wage to $15/hr by 2029, and in 2030, would have the minimum wage be indexed to the cost of living. A decision is likely soon. More details.
South Dakota – Legislation to increase the minimum wage to $15/hr by 2026 was defeated in a senate committee by an 8-1 vote. More details.
Virginia – Amended legislation calling for a study committee to examine the impacts of eliminating the tip credit advanced out of a house committee. The original bill called for the outright elimination of the tip credit by 2028. The work group “shall include representation from tipped employee labor organizations, legal aid organizations that represent tipped employees, tipped employee advocacy groups, employers of tipped employees, and advocacy groups for employers of tipped employees.” More details.
Paid Leave
U.S. Senate – Legislation was introduced that would allow employers to claim a partial tax credit (45S) for those that purchase or subsidize their employees purchase of Paid Family Leave Insurance (PFLI), mirroring legislation currently pending in many states. The bill, sponsored by Sens. Deb Fischer (R-NE) and Angus King (I-ME), would also expand the eligibility requirements for employers to take the credit. Currently, employers who provide paid leave benefits due to state mandates are ineligible for the credit, even if they offer leave benefits in states with no mandates. This bill would enable employers to take the credit for leave provided in non-mandate states as well as for leave that is in excess of any state or federal mandate. More details
Kentucky – Legislation to give private and public employers the option to allow employees to purchase paid family leave insurance passed out of the house on a 92-1 vote and is headed to the senate. Per the bill language, paid family leave insurance would allow for temporary wage replacement for workers who take leave to care for a sick family member, or bond with a child after a birth, adoption, or foster care placement. It could also be used when caring for a family member who is a first responder or member of the military and who was injured in the line of duty. At least six other states have a similar provision. More details.
Labor Policy
Florida – The house passed legislation allowing 16- and 17-year-old children to work more than 40 hours a week and allowing homeschooled and virtual school teens to work during the school day. It also bars municipalities from enacting curfews that would conflict with the bill and allows teens to work more than eight hours a day between 6AM and 11PM. An amendment that would have required employers to give 16- and 17-year-olds a break every five hours failed. A slightly different companion bill is pending in the senate. More details.
Labor Activism
Jose Andres – Employees at The Bazaar, Andrés’ upscale eatery in Washington, DC presented managers with a petition of support seeking to bargain collectively for better pay, health care, and more transparent tip-sharing policies. The group Unite Here Local 25 is seeking to represent would include roughly 140 workers, including servers, food runners, and bussers. Andrés has voluntarily recognized at least three unions in the past but workers and organizers say this is a crucial test for Andrés, given his close relationship with President Joe Biden and the history of the building where The Bazaar is located. The restaurant sits two blocks from the White House and is located in the Waldorf Astoria hotel – formerly the Trump International Hotel – in the Old Post Office Building owned by the federal government and leased to the hotelier. Andres has not yet responded to the petition. More details.
Trader Joe’s – In a hearing before an NLRB Administrative Law Judge regarding charges the company illegally retaliated against workers for union organizing activity, a company attorney called into question the constitutionality of the Board itself positioning this “affirmative defense” for later use in the trial. The company joins the growing list of organizations, led by Tesla’s Elon Musk, claiming that the NLRB violates the constitutional separation of powers as well as the right to due process. More details.
Waffle House – An employee has filed a class action lawsuit against a large franchisee based in Tennessee asserting that the company failed to pay employees minimum wage and then incorrectly inflated their wages in its payroll system. According to the filing, it is alleged that the tip sharing policy did not guarantee that employees’ hourly rate and credited tips equal to at least $7.25/hr (minimum wage). Additionally, the suit claims that employees spent 20 percent of their work time doing non-tip tasks, and during that time, were docked the same reduced rate as if they were serving customers and further that employees were docked $3 per shift for the cost of company food, regardless of whether they ate at the restaurant that day. The company has been the subject of a corporate organizing campaign by the Union of Southern Service Workers. More details.
Alcohol
Colorado – Legislation to make permanent the pandemic-era allowance for cocktails-to-go unanimously advanced out of a senate committee. The temporary provision is set to sunset in 2025. More details.
Indiana – The house advanced legislation that allows a bar or restaurant (retailer) to prepare, sell, and deliver alcoholic beverages for carryout in sealed, non-original containers. The bill now moves to the senate. More details.
Taxes
U.S. House – By a 357-70 margin, the U.S. House passed the Tax Relief for American Families and Workers Act. The National Restaurant Association supported passage of the bill. It included significant child care tax provisions and also temporarily paused the phaseout of bonus depreciation. That was a provision in the 2017 Trump tax cuts that allowed companies to write off certain capital expenditures immediately instead of having those deductions written off over the “useful life” of the asset. Also were provisions lifting caps on business interest expenses. The bill now goes to the U.S. Senate where, despite support from the White House, the potential for changes to the bill remains high. More details.
Misc.
Environmental, Social, and Corporate Governance (ESG) – Agriculture commissioners from 12 states sent a letter to the heads of six banks, arguing that ESG efforts to promote net-zero carbon policies would hurt farmers and inflate consumer food prices. The top agriculture officials penned a letter to top executives of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo, taking issue in particular with their collective membership in the Net-Zero Banking Alliance (NZBA). They warned that the banks’ involvement in the global eco- alliance may impact food availability, lead to price increases, limit credit access for farmers, and have broad negative economic consequences. The agriculture officials, who have broad authority to initiate investigations and bring enforcement actions, requested information from the banks about their involvement in NZBA and their net-zero goals. More details.
Key Takeaway
- This week, the Associated Press published the results of a two-year investigation into alleged exploitation of prison labor, primarily in the agriculture industry. The report not only documents the food production process, it follows the products through the supply chain and names retailers, grocery stores, industry suppliers and even some QSR brands that “benefit” from prison labor. This follows similar reporting last Dec. that brought national attention to alleged abuses with Alabama’s prison system which directly involved leading brands in the industry. Brands need to be aware of this growing national narrative and ensure they are making cogent, defensible decisions in this space. While the general public may be largely unaware or unmoved by these allegations, employees themselves could look at this issue very differently and question the motivations and values of their companies. As such, the SEIU and other labor organizations are seizing this opportunity and leveraging these headlines for their own organizing purposes, trying to alter employees’ perception of their employers. Brands should be very careful.
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.