Wages
Long Beach, CA – The city council voted unanimously to direct city staff to conduct a labor market analysis for hospitality workers and prepare a ballot measure for the upcoming March 2024 local election. The wage rate that will appear on the ballot will be determined by the study’s findings. City staff will present the research, alongside the potential ballot measure, to the city council in late Sept.or early Oct. in order to meet the deadline to place it on the March 2024 local election ballot. Due to a previous ballot initiative in 2012, the current minimum wage for hotel workers in the city is $17.55/hr. More details.
Paid Leave
Maine – The governor signed legislation mandating that workers at businesses with fewer than 15 employees would receive up to 12 weeks of paid leave to care for a newborn baby or for other reasons, such as an extended illness or to care for a sick or disabled family member. Under the legislation, payroll taxes would begin in 2025 with the first benefits to be paid out starting in May 2026. The benefits would be paid for with a 0.7 percent to 1 percent payroll tax, with employers and employees each contributing half. More details.
Labor Policy
Federal – Sens. Elizabeth Warren and Sherrod Brown sent letters to CEOs and presidents of major brands accusing their companies of committing “wage theft by denying low-wage workers overtime pay by abusing the label ‘manager’ and systematically misclassifying workers that spend the majority of their time performing manual labor tasks as manager.” These letters follow on the heels of a report issued by the National Bureau of Economic Research in Jan. accusing employers of intentionally avoiding overtime. While many brands in multiple industries received letters, the restaurant industry was the major target. Leaders at Arby’s, Sonic, Jimmy John’s, Burger King, Popeyes, Pizza Hut, Kentucky Fried Chicken, Bojangles, Boston Market, Dairy Queen, Dominos, Little Caesars, and Subway each received the letters. More details.
Labor Department – The agency officially submitted its proposed overtime rule to the Office of Information and Regulatory Affairs (OIRA). This is the last step before the proposed rule is released in Aug. It is unclear what the new overtime thresholds or duties tests may be. The Obama Administration proposed doubling it from its current $36,000 threshold, House progressives, for their part, signed onto a letter bumping it to $85,000, and pending legislation sponsored by Sen. Sherrod Brown bumps it to $75,000 within a few years. More details.
Labor Department – Sen. Joe Manchin announced he would oppose the nomination of Julie Su as Labor Secretary, arguing her “progressive background” would prevent her from forging compromises between labor and industry representatives. Manchin said in a statement the labor secretary “should have the experience to collaboratively lead both labor and industry to forge compromises acceptable to both parties” and added he had concerns that “Su’s more progressive background prevents her from doing this.” The attention now shifts to Sen. Kyrsten Sinema, as the lone swing vote that has not announced a position. No Republicans have endorsed Su. Therefore, if both Manchin and Sinema (who switched from being a Democrat to an independent in Dec.) oppose Su then she would not be able to win confirmation without Republican support. More details.
EEOC – The U.S. Senate confirmed attorney Kalpana Kotagal to join the Equal Employment Opportunity Commission (EEOC), giving Democratic appointees a majority on the panel for the first time during President Joe Biden’s term. The final tally was 49-47 in favor of confirmation. No Republican voted to confirm Kotagal, and Sen. Joe Manchin opposed her; however, four senators (including three Republicans) did not vote. Biden first nominated Kotagal back in April 2022, but she spent more than a year in limbo due to difficulty clearing the narrowly divided Senate. Kotagal’s term will run until July 2027. Earlier in the week, Vice President Kamala Harris cast a tie-breaking procedural vote to clear the way for Kotagal’s confirmation, a move that tied the record that John C. Calhoun has held since 1832. More details.
California – Due to intense industry opposition, a senate committee pulled assembly-passed joint employer legislation focused squarely on the quick service restaurant sector. The bill would require that a fast food restaurant franchisor share with its fast food restaurant franchisee all civil legal responsibility and civil liability for the franchisee’s violations of prescribed laws and orders, or their implementing rules or regulations. The bill would authorize enforcement of those provisions against a franchisor, including administratively or by civil action, to the same extent that they may be enforced against the franchisee. The language is similar to the joint employer language removed from AB-257, the FAST Act. And, the sponsor of the FAST Act sponsored the assembly version of this bill. The bill will not be heard again before the July 14th deadline (today) for legislation to clear policy committees but the bill sponsor indicated that he would instead ask Senate leadership for a rules waiver to allow a vote in August or September. More details.
Maine – The governor signed legislation making Maine the fourth state (Connecticut, Oregon, and Minnesota) to pass a ban on captive audience meetings. (A bill in New York has also been transmitted to the governor there.) The bill prohibits an employer from “discharging, disciplining or otherwise penalizing or threatening to discharge” a worker who declines to receive a communication or attend a meeting about religious or political matters. The bill also provides an exemption for religious employers. The governor had pushed back on the original language which was then amended to remove language requiring the reimbursement of attorneys fees to successful plaintiffs as well as limiting an employer’s ability to discipline workers who decline attendance. More details.
Delivery
New York, NY – Food delivery platforms DoorDash, Grubhub, and Uber Eats are challenging in court New York City’s new minimum wage law for app food delivery workers. All three companies sued the city, maintaining that the law would hurt delivery workers more than help them. DoorDash and Grubhub filed a suit jointly to the Supreme Court of the State of New York, while Uber (the parent company of Uber Eats) filed its lawsuit separately. The law, which was announced last month, would increase pay for app delivery workers to $17.96/hr before tips on July 12, and raise pay again to nearly $20/hr in April 2025. Pay would be adjusted annually for inflation going forward. The DoorDash and Grubhub lawsuit alleges that the new regulation is legally flawed because it targets only meal-delivery services and not grocery-delivery services. Another sticking point is language that would compel the companies to pay workers for hours that they are available to take orders while logged into the delivery apps, even if they don’t actually make any deliveries. More details.
Diversity & Inclusion
State Attorneys General – Republican attorneys general from 13 states urged major companies to eliminate race-based promotions and hiring quotas in a letter published this week. The letter cited the U.S. Supreme Court decision to strike down affirmative action in college admissions as reason to end equivalent workplace policies. The attorneys general from Kansas and Tennessee were the first signatories on the letter addressed to the CEOs of Fortune 100 companies. Apple, Microsoft, Google, and Netflix were among the companies directly called out in the letter for their race-based practices in hiring, contracting, and promotions. Other signatories of the letter included the attorneys general from Alabama, Arkansas, Indiana, Nebraska, Iowa, South Carolina, Kentucky, West Virginia, Mississippi, Missouri, and Montana. The letter stated that, “companies that engage in racial discrimination should and will face serious legal consequences,” the letter warned. “The Supreme Court’s recent decision should place every employer and contractor on notice of the illegality of racial quotas and race-based preferences in employment and contracting practices.” More details.
Key Takeaways
- Last month, the U.S. Supreme Court declined to review a decision by the U.S. Court of Appeals for the Fourth Circuit that found that the Americans with Disabilities Act protects transgender people who experience distress caused by their gender identity not matching their sex assigned at birth. The court’s decision not to review the case kept the ruling in place and will allow federal district courts to continue grappling with the question. As a result, several other federal district courts – including in Georgia, Illinois, and Massachusetts – have similarly allowed ADA claims based on gender dysphoria to move forward. It is an open question whether these cases will lead to more litigation in the space but for now, employers should review their disability accommodation policies and ensure that transgender and nonbinary employees’ concerns are addressed in order to avoid potential liability.
- A new report released by the R Street Institute shows no correlation between alcohol delivery and underage drinking. Traditional players in the three-tiered alcohol system – namely retailers and distributors – feel that accommodations for off-premise sales of alcohol enacted during the pandemic to support restaurants have eroded their market share and they have been pushing back against the practice in state legislatures across the country. A major tactic has been perpetuating the notion that off-premise sales have caused an uptick in underage drinking. This study – and many others before it – contradict those assertions. The industry should continue to set the record straight in this space.
Podcast
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