Wages
Alaska – A proposed ballot initiative has been submitted to the state elections office that would make major changes to state labor and employment law. The proposal would raise the hourly minimum wage (currently $10.85/hr) to $13/hr in July 2025, $14/hr in July 2026 and $15/hr in July 2027, and annually according to inflation after that. Alaska has no tip credit. It would also require employers with 15 or more employees to offer 56 hours (equal to seven days) of accrued paid sick leave annually. Smaller employers would have to offer 40 hours. Additionally, the measure would bar employers from requiring workers to attend meetings (often referred to as captive audience meetings) on religious or political matters unrelated to their work. The state has until Sept. to approve the language and allow signature gathering to begin. More details.
Maine – Pending legislation that would increase the state minimum wage to $15/hr by Jan. 1, 2024 and then tie annual increases to inflation has stalled on the governor’s desk. The bill has been controversial and only passed the house by a one-vote majority. Despite passing the legislature, the Senate Appropriations Committee did not approve budget authority for the necessary $8 million that was needed to cover the cost of the increase for state workers. It is most likely that the legislation will be carried over to the next regular session beginning Jan. 2024. The governor has signaled through the press that she prefers the indexing that’s currently in statute and doesn’t support the bump to $15/hr. The current state minimum wage will increase to $14.45/hr next Jan. More details.
Anaheim, CA – A state appeals court ruled that Disneyland Resort has unlawfully evaded the local minimum wage law, likely resulting in wage increases to nearly $20/hr for employees. Measure L was approved by voters in 2018 and required businesses that receive subsidies from the City of Anaheim to raise their minimum wage to at least $15/hour in 2019, and then by one dollar each year, leading to $18/r in 2022. Cast members sued in 2019, claiming that Disney was subject to the measure but hadn’t complied with it. The question was whether or not Disney had received subsidies that Measure L covered. The decision from the three-judge appellate panel stems from a 1996 resort district bonds agreement, which stipulated that Disney would cover bond payments if the city falls short. In turn, the city would repay Disney down the road. The court ruled that the Reimbursement Agreement gives Disney the right to receive a rebate – or a return – of transient occupancy taxes, sales taxes and property taxes and as such, those monies qualify as a city subsidy. It is unclear if the company will pursue further litigation. More details.
Chicago, IL – Legislation was introduced, with the strong support of the mayor, to phase out the tip credit over a two-year period and bring server wages in line with the city’s current minimum wage of $15.80/hr. The mayor and sponsors recently appeared at a One Fair Wage rally led by key industry antagonist Saru Jayaraman. Additionally, following his keynote opening address at the Netroots Nation convention last week, the mayor participated in a ‘Server for an Hour’ event, hosted by One Fair Wage, serving food and drinks to thousands of Netroots attendees in solidarity with Chicago tipped restaurant workers. Proponents of the effort admit that they will likely have to negotiate a longer phase-in and may make some allowances for smaller employers. The proposed ordinance now moves to the Rules Committee but timing on legislative action is unclear. More details.
Santa Monica, CA – The union representing hotel workers in the city filed paperwork with city staff to begin the process of placing an initiative before the voters to raise the minimum wage for hotel workers to $30/hr. Under the proposal, the hotel wage would increase to $30/hr within a month of the measure passing. It would also require hotels to sanitize and clean rooms each night, prohibit the use of contract or temporary employees to clean rooms, make hotels liable for violations incurred by temporary staffing agencies and limit the workload on custodial staff. Santa Monica has dual minimum wage tracks. Most employees are subject to a $16.90/hr minimum wage with increases tied to the annual Consumer Price Index. The wage for hotels and businesses operating on hotel property is currently $19.73/hr matching the City of Los Angeles Citywide Hotel Worker Minimum Wage Rate. More details.
Paid Leave
Nebraska – A large petition drive kicked off this week to gather signatures for a proposed 2024 ballot initiative to establish a statewide paid sick leave law. The signature gathering threshold in the state is relatively low (86,000 signatures needed) and if the ballot language is written properly, the proposal is likely to appear on the 2024 ballot. If voters approve, the initiative would require all Nebraska businesses to provide some amount of paid sick leave for employees, depending on the organization’s size, starting Oct. 1, 2025. Businesses with fewer than 20 workers would have to offer at least five days of sick leave annually. Larger businesses would need to offer at least seven days. More details.
Chicago, IL – In addition to the wage proposal noted above, the same sponsor introduced a paid leave ordinance as well. It would require Chicago employers to offer their workers one hour of paid leave for every 15 hours worked, regardless of whether they are sick. That would entitle Chicago employees to 15 days of paid time off every year, according to the proposal backed by the Chicago Federation of Labor. If approved, the measure would be the largest expansion of paid time off in any city in the United States. The new statewide paid leave law takes effect Jan. 1, 2024 requiring Illinois employers to give their workers at least one hour of paid leave for every 40 hours worked. That will entitle employees to five days of paid time off every year, according to the law. Because Chicago already has a separate law, approved in 2016, requiring employers to give their employees paid sick leave, the state law exempts Chicago. Chicago employees currently earn one hour of paid sick leave for every 40 hours they work, or at least five days every year. The new proposal would basically triple that benefit. More details.
Labor Policy
Labor Department – The White House has signaled its intention to move on from Julie Su’s nearly five-month confirmation battle, looking instead to indefinitely leave her in the role as acting Labor Secretary. Last week, 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 has shifted to Sen. Kyrsten Sinema, as the lone swing vote. Although Sinema has not publicly taken a position, the White House is resigned to the fact that she will ultimately oppose the nomination, thereby dooming the prospects of confirmation due to no Republican support. More details.
California – The state supreme court ruled unanimously that workers in the state can still leverage the PAGA law to join together and seek penalties against their employer for violating labor laws. The Private Attorneys General Act of 2004, or PAGA, lets employees sue their employers, individually or collectively, in the name of the state for violating laws such as those regulating minimum wages, overtime, sick pay, and meal and rest breaks. If the suits succeed, the employees collect 25 percent of the penalties provided by labor law, and the state collects 75 percent. Last year, the U.S. Supreme Court ruled 8-1 that PAGA violates the rights of businesses whose contracts require workers to take disputes to individual arbitration rather than going to court, a common practice for large companies. Although that ruling put pending PAGA cases on hold, most courts in California resumed hearing those cases after a few months when state appellate courts began issuing rulings that rejected the Supreme Court’s reading of the law. The opinion this week will likely kick start all of those pending cases that were on hold. More details.
Wingstop – The Los Angeles County Department of Consumer & Business Affairs assessed the company $667,000 in fines and wage wages after a two-year investigation. After auditing payroll records and time cards and interviewing employees, the county found that the two Wingstop locations – operated by Far West Restaurant Group – repeatedly flouted the minimum wage rules from 2017 to 2021, shortchanging their employees by as much as $2.25/hr. It is the largest settlement since the county’s minimum wage law went into effect in 2016. The current minimum wage in Los Angeles County is $16.90/hr. More details.
Labor Activism
Dollar General – An administrative judge with the National Labor Relations Board (NLRB) ruled that the company violated federal labor law and “clearly intended to interfere” with worker rights in efforts to quell unionization at a store in Barkshamsted, CT. The violations included wrongfully firing an employee and making an implied threat to close the location in question. Employees were also required to attend meetings that encouraged them to vote against union representation. Dollar General workers at the same store narrowly voted against unionizing in October 2021. The judge wrote that “the unfair labor practices herein involve individuals at the highest levels of company management and were also committed pursuant to a corporate policy as to how to deal with organizing efforts by Dollar General employees.” The judge recommended that the company be required to cease-and-desist from any discriminatory action against employees for engaging in union activity, company surveillance and other efforts aimed at discouraging labor organizing. Additionally, the judge ordered that the company offer the fired worker reinstatement and send notices that alert U.S. employees of the labor law violations and their rights. More details.
Benefits
Walmart – The company is teaming up with Khan Academy to offer a new, free financial literacycourse for its employees, customers, and communities. The virtual course offers articles, videos, and exercises designed to master personal finance skills, which can help strengthen financial capabilities, reduce stress and make choices that lead to a healthier financial future, the company said. Several key financial topics are covered in the comprehensive training including budgeting and saving, loans and debt, insurance, investments, retirement, and taxes among others. More details.
Alcohol
Michigan – The governor signed legislation making the current allowance for cocktails-to-go permanent. In July 2020, Gov. Gretchen Whitmer temporarily allowed to-go cocktails in Michigan to help restaurant and bar owners survive the pandemic. The new law merely eliminates any reference to Jan. 1, 2026, when the provision allowing to-go cocktails was initially supposed to sunset. More details.
Key Takeaways
- Last week, Republican attorneys general from 13 states urged major companies to eliminate race-based promotions and hiring quotas in a letter addressed to the CEOs of Fortune 100 companies. The letter cited the U.S. Supreme Court decision to strike down affirmative action in college admissions as reason to end equivalent workplace policies. Apple, Microsoft, Google, and Netflix were among the companies directly called out for their race-based practices in hiring, contracting, and promotions. The letter warned that, “companies that engage in racial discrimination should and will face serious legal consequences.” This week, 20 Democratic attorneys general responded with letters to the same audience stating, “the letter you received from the 13 state attorneys general is intended to intimidate you into rolling back the progress many of you have made. We write to reassure you that corporate efforts to recruit diverse workforces and create inclusive work environments are legal and reduce corporate risk for claims of discrimination.” We should now anticipate a significantly heightened level of scrutiny from these elected officials on corporate hiring and promotion policies and realize that the Human Resources space has become a major political football. Brands should prepare accordingly.
- This week, the National Labor Relations Board denied Google and their IT company Cognizant’s request for review of an agency official’s decision that the two companies are joint employers of a group of unionized workers. Earlier this Spring, contractors for YouTube Music, overwhelmingly voted to unionize, and as of this decision, the Board has designated Google as a joint employer along with Cognizant. While Google could continue to resist coming to the table, failure to bargain at this point could be considered an unfair labor practice. It is indicative of the commitment of this Board to attack all aspects of the “fissured workplace” including independent contractors, sub-contractors and the franchise business model. Brands should assume that for the foreseeable future, the Board will almost always determine that these are joint employer relationships.
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.