Wages
New York – The governor proposed during her 2023 State of the State Address that the state should index the minimum wage to inflation. She stopped short of advocating for a minimum wage increase prior to tying the wage to the regional consumer price index (CPI). Legislative leaders (including the assembly speaker) said that increasing the current wage prior to coupling it with inflation was the appropriate path. Pending legislation supported by the state’s labor leaders would push the wage to $21.25/hr by 2026. Regardless of what approach is taken, employers can expect some level of wage increase being approved this legislative session. More details.
Paid Leave
Illinois – The state legislature approved a bill that will make Illinois the third state (following Maine and Nevada) to allow paid leave for any reason. The governor announced he will sign the bill into law. The new law will provide nearly all Illinois workers with a minimum of 40 hours of paid leave, or a pro rata number of hours, during a designated twelve-month period. Under the Paid Leave for All Workers Act (PLAW), employers can choose to frontload the leave on the first day of employment or the first day of a designated twelve-month period or use an accrual method. Leave accrues at the rate of one hour of paid leave for every forty hours worked. The law will deem exempt employees to have worked 40 hours in each workweek for purposes of accrual, unless their regular workweeks are less than 40 hours. Once enacted, the law will permit employees to use leave after 90 days on the job, unless an employer allows them to utilize leave earlier. Employees may determine how much leave to use, but employers may set a reasonable minimum increment of no less than two hours per day. The law will take effect on Jan. 1, 2024. More details.
Minnesota – Language will be inserted into the state budget establishing a paid leave program for the state. Under the current proposal, employees could qualify for up to 12 weeks of paid leave to care for a family member (such as a newborn or sick parent) as well as 12 weeks of medical leave if they get sick. Legislative leaders and the governor want to use a portion of the state’s $17.6 billion estimated budget surplus to jump-start the program. After an initial infusion of surplus cash, the language states the program would be sustained by a 0.6 percent premium on wages that would be funneled into a family and medical benefit insurance account with both employees and employers contributing to the program. Past cost estimates have suggested a worker earning $50,000/yr would contribute roughly $3/wk with the employer contributing an equal amount. Employers could opt out and continue offering private plans for paid family or medical leave, or both, under the bill. They would need to apply for state approval to offer the substitute plan, which would have to include at least the same benefits, protections, and rights as the public program. Employers could face fees if they don’t meet program requirements. More details.
Labor Policy
EEOC – The Equal Employment Opportunity Commission (EEOC) unveiled its enforcement priorities for the next four years this week including the implementation of newly-enacted protections for pregnant workers. As part of the year-end spending deal in Dec., Congress tacked on an amendment requiring employers to provide “reasonable accommodations,” such as bathroom breaks and seating options, for pregnant individuals in the workplace. The legislation tasked the EEOC with enforcing those rights for workers, as it does with other landmark anti-discrimination laws like the Americans with Disabilities Act (ADA). The EEOC is now split 2-2, though President Joe Biden this month re-nominated attorney Kalpana Kotagal to fill that open seat and provide the decisive vote on contentious issues. More details.
U.S. House – Rep. Virginia Foxx (R-N.C.) succeeded in her quest to become Education and the Workforce Committee chair. Foxx had to receive a waiver because of a GOP conference rule that bars members from serving more than three consecutive terms as a ranking member or chair of a committee. This will be Foxx’s second time wielding the gavel. She has previously chaired the committee and served as its ranking member twice. This development is especially important because Rep. Foxx has been the industry’s strongest supporter on the joint employer issue and has vowed to exercise vigorous oversight of the NLRB. More details.
Labor Activism
California – Today, the Sacramento Superior Court will hear the industry’s appeal of a Department of Industrial Relations decision to enforce the FAST Act. For context, the industry-backed coalition, Save Local Restaurants, gathered the necessary signatures to freeze implementation of the law and place a referendum of the law on the 2024 ballot. However, a Department email in mid-Dec. indicated that the state intended to begin enforcing the new law Jan. 1 (the original effective date of the law). Under existing case law, the referendum process should have immediately delayed implementation until the voters could decide. The agency decided to move ahead anyway, forcing Save Local Restaurants to sue and the judge subsequently found that the issue merited a further hearing and issued a temporary stay. More details.
Amazon – A National Labor Relations Board Regional Director rejected Amazon’s attempt to overturn a union victory at a warehouse on Staten Island, removing a key obstacle to contract negotiations between the union and the company. The official found that there was a lack of evidence to support Amazon’s claim of election improprieties and that its objections to the election should be overruled. The decision was widely expected after a labor board hearing officer recommended in Sept. that the company’s objections be set aside. The company, which argued that the election was unfair because of improper conduct by both the Board and the union, said in a statement that it knew the regional director was unlikely to rule against the agency. Amazon intends to appeal the decision to the full Board. More details.
Potbelly Sandwich Works – The sandwich chain is the latest restaurant brand to face a unionization effort. Workers at a Portland location have filed an election petition with the NLRB, intending to affiliate with the Restaurant Workers of Portland. The local Jobs with Justice along with other community groups are assisting with local organizing efforts. More details.
REI – Workers at a store in a Cleveland suburb, in conjunction with the Retail, Wholesale and Department Store Union (RWDSU), submitted signed union cards and a petition for a union election to the NLRB. The Board will now verify the cards and if approved, move forward with scheduling an election. If successful, it would be the third REI unit to vote for union representation. More details.
Sustainability
New York – The governor renewed her support for an Extended Producer Responsibility (EPR) program in the annual State of the State Address this week. She announced the introduction of the Waste Reduction and Recycling Infrastructure Act, “which transfers the onus of recycling to the producer – not the taxpayers.” Details of the bill have not been released yet, but the report says the proposed EPR program would reduce waste in landfills by making brands responsible for end-of-life packaging. It’s not the first time the governor has called out EPR for packaging as an important priority for the state. Last year, she named EPR as a priority in her 2022 State of State Address and included an EPR provision in her proposed FY 2023 executive budget. That provision did not make it to the final New York state budget released in April. More details.
Key Takeaways
- The National Governors Association Center for Best Practices released a new brief outlining the policy levers available to governors under the Workforce Innovation and Opportunity Act (WIOA). The brief focuses largely on Title I of the WIOA because it represents most of the federal workforce development funding that flows directly to states and territories. It also authorizes an array of activities and services designed to connect individuals to employment opportunities through American Job Centers and establishes state and local workforce development boards to guide these activities. With states receiving unprecedented federal financial support in this space, brands facing labor staffing challenges now have significant opportunities to partner with state and local workforce development boards to help facilitate a pipeline of workers. Employers should take full advantage of this opportunity.
- The U.S. Supreme Court heard oral arguments this week in a case that could have implications for all employers facing higher levels of labor activism. The case stems from economic damages suffered by a concrete company whose drivers walked off the job causing wet cement to dry in the trucks inflicting significant damage on the trucking fleet. Questioning by some of the justices indicated a high level of sympathy for the plaintiff (the concrete company). On the surface, the case is about whether state courts are an appropriate venue for such lawsuits or whether that litigation is preempted by federal law. But the case is being closely monitored by labor groups concerned that the court’s conservative majority will use it as an opportunity to effectively chip away at the power of strikes and the NLRB. As the restaurant industry is facing increasing levels of strikes, protests and walkouts, brands should pay attention to this case as it may cause unions to think twice about the potential to be held accountable for economic harm.
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.