Wages
Virginia – Legislation to incrementally increase the minimum wage to $15/hr by 2026 advanced out of a house committee and now heads to an additional one. The same committee also advanced legislation to eliminate the tip credit by 2028. If ultimately passed by the legislature, the bills face an uncertain future at the governor’s office. The current minimum wage is $12/hr as a result of legislation passed in 2020 and the server wage follows the federal standard of $2.13/hr. More details.
Montgomery County, MD – Legislation to eliminate the tip credit in the county was withdrawn by its sponsor. The bill, if passed, would have eliminated the tip credit by July 1, 2028, raising it annually until it is in line with the current $15/hr county minimum wage. The bill would have also ensured that the change did not inadvertently increase a restaurant’s rent (which became an issue in Washington, DC and can happen in leases where rent payments are tied to a percentage of sales). The same council member also withdrew another bill modeled off the California FAST Act that would have created a wage commission to evaluate the minimum wage in the region and advise the county council. Despite the appearance of little support for the bills, the sponsor cited the need to rally around pending statewide legislation as the rationale for withdrawing the bills. More details.
Evanston, IL – The city council voted 4-3 to table a proposed minimum wage increase until its March meeting. The proposal would increase the minimum wage to $16.25/hr at establishments with 100 or more employees and $15.50/hr for those with fewer than 100 employees. Evanston currently follows the Cook County minimum wage, which is expected to increase to $14.05/hr this July. The vote was tabled until March to allow the city’s economic development team to gather data on businesses in Evanston. City council members wanted information regarding how many businesses are sitting near the 100 employee threshold. More details.
Paid Leave
Vermont – The governor announced that a voluntary paid family and medical leave program will now be available to private employers. The program, administered by Hartford, a Connecticut-based insurance giant, has offered paid family and medical leave to state employees since July 2023. Starting Feb. 15, all private employers in the state with at least two or more employees will be eligible to purchase the insurance, called Vermont Family and Medical Leave Insurance. Benefits will take effect July 1. The program offers insurance plans for people who need to take time off work to care for a child or family member, recover from illness, or for leave related to a family member’s military service. Plans on offer include between six and 26 weeks of paid leave per year and pay 60 percent to 70 percent of an employee’s standard wages. More details.
Labor Policy
Virginia – Legislation was introduced to create a portable benefits regime for delivery drivers. The bill would require companies like DoorDash to make a contribution match of an eligible workers’ earnings into a portable benefits account – one that enables them to save for retirement, cover health care costs, or compensate for lost income. DoorDash has been a vocal supporter of this and similar bills across the country, in part to stem off onerous laws such as Seattle’s new ordinance implementing a minimum pay requirement of $26.40/hr before tips, instating a regulatory response fee, and modifying platform access. DoorDash is also now subject to a regulatory response fee in Seattle and as a result has increased the price for consumers. Because of this, the service is lowering the suggested tip amounts for the delivery driver that customers receive when placing an order. No hearing date has been set for the bill. More details.
Washington – A hearing was held in a house committee on legislation to prohibit captive audience meetings. The legislation would prohibit employers from firing, disciplining, or threatening adverse employment actions against workers who refuse to attend meetings on political matters, including unionization. If passed, Washington would be the sixth state to enact this type of law. More details.
Washington, DC – The mayor signed a new pay transparency act effective June 30, 2024 which requires D.C. employers to post salary ranges and benefits information for open positions, and establishes increased protections for current and prospective employees to inquire about and discuss compensation. The act applies to employers that employ at least one employee in the District. This new law requires D.C. employers to disclose pay rates and healthcare benefits for open positions. Specifically, employers must provide “the minimum and maximum projected salary or hourly pay in all job listings and position descriptions advertised.” The act does not clearly define “job listings” or “position descriptions advertised,” but it appears to require the disclosure of projected pay ranges in public job postings as well as internal announcements about promotion and transfer opportunities. The pay ranges disclosed should be “the lowest to the highest salary or hourly pay that the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion, or transfer opportunity.” Additionally, although not required in job postings, the Act requires employers to disclose to applicants “the existence of healthcare benefits that employees may receive” before the applicant’s first interview. More details.
Labor Activism
Minneapolis, MN – Labor activists (including the mayor and several city council members) rallied in support of a soon-to-be-released proposal to create a Labor Standards Board in the city. Theoretically, the board would function as a clearinghouse of sorts, accepting feedback from stakeholders on specific workplaces or industries (including restaurants), and subsequently deciding whether to convene an industry specific body (a “sectoral work group” balanced among stakeholders) to investigate and make recommendations. The LSB would then have the authority to interpret those recommendations and make policy proposals to the city council, which could choose to act or not act on them. In reality, it’s a priority of the labor community in general and the SEIU in particular to set up unelected boards to regulate the restaurant sector ala the Fast Act in California. The city says it is yet unable to offer an exact structure for the LSB or sectoral working groups but emphasized it would be a mix of labor, business, and third parties, which could theoretically be government professionals or outside experts. Formal introduction of a proposal could come any day. More details.
Starbucks – The U.S. Supreme Court agreed to hear a case brought by the company challenging a federal judge’s order to reinstate seven employees who were fired at a store in Memphis amid a union campaign there. Starbucks argued that the criteria for such intervention by judges in labor cases, which can also include measures like reopening shuttered stores, vary across regions of the country because federal appeals courts may adhere to different standards. A regional director for the National Labor Relations Board argued that the apparent differences in criteria among appeals courts were semantic rather than substantive, and that a single effective standard was already in place nationwide. The labor board had urged the Supreme Court to stay out of the case, whose outcome could affect union organizing across the country. A Supreme Court decision could in principle raise the bar for judges to issue orders reinstating workers, effectively limiting the labor board’s ability to win temporary relief for workers during a union campaign. More details.
T-Mobile – The company will likely have to disband its nationwide program for collecting complaints about work from its customer service representatives, after a federal appeals court ruled 2-1 that the National Labor Relations Board (NLRB) had sufficient legal backing for such an order. The US Court of Appeals for the District of Columbia Circuit affirmed the NLRB’s decision that the company’s T-Voice program qualified as a labor organization and that it was unlawfully dominated and assisted by T-Mobile. The appeals court ruling puts judicial force behind the NLRB’s order to dissolve T-Voice and may end a nearly eight-year legal dispute. T-Mobile established T-Voice in 2015, staffing it with customer service representatives from its call centers. The Communications Workers of America, which has attempted to organize T-Mobile customer service reps for years, filed a charge with the NLRB in 2016 challenging T-Voice’s existence. More details.
Delivery
Massachusetts – State Attorney General Andrea Campbell announced a $3.5 million settlement with the online food delivery service platform Grubhub. The settlement resolves a 2021 lawsuit brought by Campbell alleging Grubhub illegally overcharged fees to Massachusetts restaurants in violation of a state fee cap put in place during the COVID-19 public health emergency.Under the terms of the settlement, Grubhub will pay a combined total of over $3.5 million to impacted restaurants as well as an additional $125,000 to the state. More details.
Key Takeaways
- The employer community has begun to counter the unionization effort sweeping the entry-level employment sector across the country. The union decertification effort currently unfolding in Philadelphia with Ultimo Coffee and in an increasing number of Starbucks throughout the country is worth watching closely. The high turnover rates of the industry and constant integration of new employees make the decertification process realistic for many operators. Additionally, this week, the U.S. Supreme Court agreed to hear Starbuck’s appeal of a ruling that said it must reinstate seven workers at a Memphis, Tennessee, store who lost their jobs amid a nationwide unionizing campaign. The National Right to Work Legal Defense Foundation, a right of center legal and advocacy organization, is at the center of both efforts. Impacted brands need to know that their workers have a resource to empower them if they so choose to decertify their unions. The success of both initiatives could determine what the near-term future of industry organizing could look like.
- This week, the labor community significantly upped the intensity of their burgeoning effort to create worker standards councils in major jurisdictions around the country. A ten-minute video was posted on the New York Times website hosted by an activist comedian named Jeff Seal. In the video, he recounts the “successful” efforts in Seattle and other cities to establish these boards, extols their virtues and advocates for their further expansion. Two industries were the primary focus – domestic cleaning employees and fast food workers – with the lion’s share of the attention allocated toward the latter. Mary Kay Henry, President of the SEIU, is prominently highlighted and our leading trade associations and brands are demonized. Aside from the California Fast ACT which received significant national attention, to date these conversations have been fairly local in nature and few outside of Seattle, Detroit, Minneapolis or New York were aware of their existence. That appears to be changing and brands should expect and prepare accordingly for significantly increased attention on these boards by the mainstream media.
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.