Wages
Maryland – Both the senate and house will hear legislation next week to eliminate the tip credit by 2027. Chances for final passage are unclear. More details.
New Hampshire – A senate committee tabled minimum wage legislation that would have established 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. The outcome was not unexpected. More details.
Home Depot – The company said it will increase pay and benefits for front line hourly staff by $1 billion this year but did not detail how much of a pay raise the average hourly worker will receive. Current starting pay is at least $15/hr with many markets paying a higher starting wage. In addition to changes in pay and benefits, the company is also creating new management positions on the stores’ floors. Overall, retailers continue to push wage and benefit levels making it increasingly difficult for restaurant operators to compete. More details.
Labor Policy
NLRB – The National Labor Relations Board (NLRB) overturned a pair of Trump-era decisions that had established precedents that severance agreements could include provisions waiving certain rights under the NLRA. In effect, the previous standard had given employers wider latitude to require workers to sign confidentiality agreements or waive their right to sue as a condition of severance agreements. Additionally, the Board found that employees cannot be prevented from disclosing the terms of their severance packages as outlined in any exit agreement. More details.
Columbus, OH – Pay equity legislation was introduced in the city council that would bar employers from asking job candidates about their salary or credit history. Other Ohio municipalities like Toledo and Cincinnati have implemented similar laws. According to the city’s legislative staff, data from those cities suggests that workers have seen an overall 5 percent pay increase in places where employers have stopped asking about salary history, and employment has grown 3 percent in places where employers have stopped assessing the credit history of most applicants. The council may vote on the measure in early March. More details.
Labor Activism
Illinois – Organizers for One Fair Wage held a “Serve the Server” rally in Springfield to call attention to new legislation eliminating sub-minimum wages in the state. The premise of the rally is for legislators to serve One Fair Wage members lunch. The hope is that legislators will see how “grueling” service work can be. The bill, HB 5139, would eliminate the server wage by 2025. Chances for passage are unclear. More details.
Starbucks – Earlier this week, a federal judge issued a nationwide order barring Starbucks from firing union organizers, before reversing the ruling later in the week. The initial ruling affirmed a long-established law which workers say the coffee chain has violated hundreds of times since unionizing efforts were first launched in Buffalo, New York in 2021. However, later in the week, the judge reconsidered his opinion and vacated the decision. The previous order would have allowed the NLRB to seek monetary penalties in his court if Starbucks violated the injunction at any US location. That stood as a big boost to enforcement for the board, which normally can’t levy penalties or enforce its own orders without a court’s backing. The ruling now only applies to the single store in Ann Arbor. More details.
Delivery
Indiana – A house committee advanced legislation mandating that third-party delivery platforms can no longer include restaurants on their platforms if the restaurants don’t agree to it. The bill passed unanimously and is now headed to the house floor. More details.
Key Takeaways
- This week, the Illinois Supreme Court ruled that White Castle had violated the state’s biometric identification law thousands of times. The class action lawsuit that spurred the decision could cost the company, by their estimate, nearly $17 billion. At issue, the White Castle system for screening access to a store’s computer system requires a fingertip (biometric identification) on a touchpad that functions like the one used to activate an iPad or some ATMs. The state law requires that companies using a fingerprint reader or other biometric device must seek permission from an employee before transmitting the data to a third-party for verification of the worker’s identity. The court found that White Castle had not. All brands should assess their compliance with the law and ensure they are not vulnerable to a similar action. This episode also demonstrates the importance of ongoing state-level debates around data privacy.
- This week, the Wall Street Journal published an article laying out the broader context behind the Internal Revenue Services’ new proposal to update their current voluntary tip reporting systems with a more updated, modern version. The piece, Lousy Tippers Are Just Misunderstood, is an excellent article on the complexity of the tipping issue and presents many useful arguments in defense of tipping. Primary among them is that data suggests in states with no tip credit like California, customers are significantly stingier when it comes to tipping their servers and in the end, servers don’t actually benefit from these laws. Industry arguments protecting current labor models should reflect these findings.
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.