Wages
Massachusetts – The Massachusetts Restaurant Association is seeking to block the minimum wage ballot initiative that would also eliminate the tip credit from appearing on the 2024 ballot. This week the state association filed an objection with the secretary of state’s office challenging a number of signatures submitted by One Fair Wage. The secretary of state certified a total of 12,565 signatures for the campaign ahead of the deadline, only 136 more than the 12,429 minimum due last week. If at least 137 signatures are successfully disqualified, the question would be blocked from the ballot. The state restaurant association believes a significant number of signatures were “fraudulently obtained.” Additionally, many of the signatures look like they’ve been signed by the same person. The State Ballot Law Commission will hold a hearing to consider the objections “on or after July 17.” More details.
Ohio – In a huge win for the industry, a minimum wage ballot initiative that would have also eliminated the tip credit will not appear on the 2024 ballot. One Fair Wage failed to collect the required signatures ahead of the state’s deadline. Activists intend to use the gathered petitions to qualify the measure for the 2025 ballot but significant questions exist. For instance, the ballot language’s effective date is January 1, 2025. The secretary of state, who likened the group’s disorganization and incompetence to a “goat rodeo,” is looking into the legality of reusing the already collected signatures. More details.
Oklahoma – Next Monday is the deadline for submitting signatures to place a minimum wage measure on the Nov. ballot. The measure would increase the minimum wage to $15/hr by 2029. Organizers claim they have collected twice the necessary signatures for State Question 832, which proposes the first increase in the minimum wage in nearly 15 years. A total of 92,000 signatures are needed for the measure to qualify. More details.
Paid Leave
U.S. Congress – A petition demanding a federal paid leave law was delivered to all members of Congress this week. With over 55,000 signatures, the petition is the result of a partnership between Paid Leave For All (a national campaign fighting to get paid family and medical leave for all working people), MomsRising (a women and mothers’ advocacy group), and Glamour Magazine. Addressed to President Joe Biden, Vice President Kamala Harris, House Speaker Mike Johnson, Senate Majority Leader Chuck Schumer, House Minority Leader Hakeem Jeffries, and Senate Minority Leader Mitch McConnell, the petition calls on lawmakers to commit to passing the country’s first permanent paid leave program. The petition states that the United States is one of seven countries globally that does not have any guaranteed form of paid leave. Organizers behind the petition are calling on voters and legislators alike to prioritize paid leave on a federal level during the upcoming election. More details.
Labor Policy
FTC – A federal judge in Texas issued a preliminary order against the Federal Trade Commission (FTC) ban on non-compete agreements. The lawsuit was brought by Ryan LLC, a Dallas-based tax services firm. The firm uses non-compete agreements to keep competitors from hiring away its workers and to keep workers from poaching firm clients. The company argued the FTC overstepped its legal authority to ban non-compete agreements. The court agreed the FTC lacks authority to make the sweeping rule and said the plaintiffs are likely to succeed on the merits of the case. The injunction came just days after a U.S. Supreme Court decision to overturn the Chevron doctrine. In short, that decision gives judges more power to challenge federal agencies’ rulemaking authority. Brown’s injunction has a limited scope: It only bars the FTC from enforcing the ban against the plaintiffs, including Ryan LLC as well as the U.S. Chamber of Commerce, the Business Roundtable and other business groups. It does not extend to member companies of those groups. The judge said she intends to rule on the merits by the end of Aug. and experts anticipate business groups will try to make the case for the judge to issue a nationwide ban. More details.
California – The governor signed two complementary bills to reform the Private Attorneys General Act of 2004 (PAGA). The new law requires employees to “personally experience the alleged violations brought in a claim” so that an individual will not have standing to sue on behalf of others who were allegedly harmed. It also caps penalties on employers that take immediate action to remedy “policies and practices, and make workers whole, after receiving a PAGA notice,” as well as employers that take proactive steps to comply with the Labor Code before receiving a PAGA notice. The new changes will not be retroactive and will apply to only lawsuits arising from PAGA notices that were submitted on or after June 19, 2024. In light of the reform legislation, the proponents of a statewide ballot initiative to repeal PAGA recently withdrew their measure, so it will not be presented to voters in Nov. More details.
Los Angeles, CA – A motion was introduced to expand the city’s Fair Work Week ordinance, which was signed into law in 2022 and requires employers to give retail workers their schedules in advance. It covered some 2,500 large chain fast-food restaurants and about 50,000 workers. The city’s existing regulations also address so-called clopenings, and require businesses to give workers at least 10 hours rest between shifts or provide appropriate compensation. The new proposal would establish mandatory six-hour paid training to educate workers on their rights, as well as provide fast-food workers an hour of paid time off for every 30 hours they work. The proposal is expected to be heard by council committees before a final vote by the full city council. More details.
Alcohol
North Carolina – The governor signed legislation legalizing cocktails to-go. The new law stipulates the pre-mixed liquor drinks must be sealed and sold with food and cannot be more than 24 ounces. The state becomes the 30th in the country to allow for cocktails to-go. More details.
Misc.
California – The governor signed legislation exempting restaurants from a new “junk fee” law passed last year. The author of last year’s bill is the sponsor of the current legislation, maintaining that he intended his original bill to focus on the disclosure, not the elimination, of service and delivery fees. The original law became effective July 1 but the industry continued to receive conflicting compliance guidance from the state attorney general’s office. The new measure means restaurants will continue to operate as they currently do, disclosing any extra fees on menus, websites, or reservation notices. More details.
Diversity, Equity, and Inclusion
Tractor Supply – The company, which bills itself as the largest rural lifestyle retailer in the U.S., will eliminate its diversity, equity and inclusion (DEI) roles, withdraw its carbon emissions goals and stop sponsoring Pride events in response to criticism from conservative activists. The Fortune 500 company has been nationally recognized as an inclusive and diverse workplace, including last year in Bloomberg’s Gender Equality Index and Newsweek’s inaugural list of America’s Greatest Workplaces for Diversity. But it recently became the target of conservative ire for that very reason, as the latest in a growing series of retailers to face backlash over, and ultimately walk back, its DEI initiatives. The company’s CEO urged those that were angry at his decision to “respectfully” flood Tractor Supply’s corporate offices with calls and emails stating their disapproval and, to the extent possible, start buying products from other stores instead. More details.
Key Takeaways
- The inclusion of former President Trump’s proposal to eliminate taxes on tipped income into the platform adopted by the Republican National Committee is both an opportunity and a potential challenge for the industry. In the short run, the national conversation on tipping has been completely upended and proponents of tip credit elimination are on the ropes having lost control of the issue. In the long run, however, the conversation is now being enjoined by throngs of newcomers that may bring other “remedies” to the problem of income stagnation that may be equally as hazardous. The industry needs to quickly prepare itself for the potential of its business model becoming a high-profile political football this fall.
- The far-reaching effects of the recent Chevron decision in the U.S. Supreme Court can’t be overstated. The Judicial branch of our federal government has essentially gone to war with the Executive branch regarding the extent of the latter’s regulatory authority. Every major recent agency rulemaking affecting our business model from OSHA, NLRB, DOL, SEC and the FTC among others will now likely be called into question. With Congress in a state of permanent stalemate, it now appears the parameters of our business for the foreseeable future will be determined by judges and not elected officials. The business community should prepare accordingly.
Podcast
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