COVID-19
Federal Relief – The National Restaurant Association (NRA) is calling upon the Small Business Administration (SBA) to disburse nearly $180 million in undistributed funds from the Restaurant Revitalization Fund. A report this month from the Government Accountability Office (GAO) found that the fund still had the money sitting in its coffers. SBA officials told GAO that $24 million of those unspent funds had been set aside for litigation. Officials have stated that the GAO is working with Justice Department attorneys to “resolve remaining litigation involving RRF and formulate a plan on how to distribute any remaining funds.” The NRA is arguing that Congress did not intend for those funds to be spent on litigation and called for their immediate release. More details.
Wages
California – Earlier this month, a proposed initiative to raise the minimum wage to $18/hr over the next three years failed to qualify for the Nov. ballot. Though bankrolled by a wealthy investor and backed by a slew of labor organizations, the secretary of state’s office said not enough signatures had been verified by county election officials by the deadline to qualify the measure. Proponents went to court to force the issue back to the ballot but this week, a judge ruled that the secretary of state acted properly in enforcing a June 30 deadline for counties to verify signatures for the Nov. ballot (meaning it will not qualify). It is likely to qualify for the ballot in 2024, which could create a much quicker timeframe for the $18/hr wage to go into effect by 2025. More details.
Michigan – Proponents of a proposed ballot initiative in 2024 to raise the state minimum wage to $15/hr and eliminate the tip credit submitted over 600,000 signatures to the secretary of state’s office, far in excess of the roughly 350,000 needed to qualify. In related news, a judge earlier this month ruled that a pair of 2018 voter-initiated laws, increasing the minimum wage to $12/hr and instituting paid sick-leave requirements for employers should be put into effect. The judge found that Republican lawmakers’ “adopt-and-amend” approach violated the Constitution. The GOP-controlled legislature at the time amended the measures to substantially lessen wage increases and eliminated the proposal to increase subminimum wages for tipped workers. The action by lawmakers kept the current hourly minimum wage at $9.87/hr. The judge’s ruling is expected to be appealed. More details.
Labor Policy
Labor Department – President Biden is nominating the acting head of the Labor Department’s Wage and Hour Division (WHD) to serve on a permanent basis. The nomination of acting Administrator Jessica Looman follows the administration’s high-profile failure to win Senate confirmation of David Weil, who held the position during the Obama administration. As WHD chief during Obama’s second term, Weil signed-off on several regulations that drew fire from Republicans and industry groups. It is unclear whether Looman will earn any GOP support for her confirmation. More details.
NLRB – The National Labor Relations Board (NLRB) announced yet another memorandum of understanding, this one with the Justice Department. The agencies specifically stated that they collectively “share an interest in protecting workers who have been harmed or may be at risk of being harmed as a result of interference with the rights of workers to obtain fair market compensation and to freely exercise their legal rights under the labor laws.” More details.
EEOC – The Equal Employment Opportunity Commission (EEOC) announced the findings of a report it had commissioned by the National Academies of Sciences, Engineering, and Medicine (National Academies) which analyzed the expanded EEO-1 data that was collected by EEOC from private employers and federal contractors for reporting years 2017 to 2018. The study finds that the data EEOC collected may be used effectively by the agency to help focus its resources to identify pay discrimination and offers short-term and long-term recommendations for improving pay data collection by the agency if undertaken in the future. But it also found that shortcomings need addressing before the information could be used in discrimination investigations or future surveys are conducted. More details.
California – The FAST Act is scheduled to be heard in its final committee, the Senate Appropriations Committee, on Aug. 1. Following regular order, it must clear its final committee before an Aug. 12 deadline. If advanced, the bill must then pass the full chamber by the end of the month. Because the senate version of the bill differs from the house version, the differences must be reconciled. The likely scenario is that the house picks up and approves the senate version. Employers should engage immediately through their respective trade groups. The bill is expected to be amended in the coming weeks. More details.
New York – The governor and attorney general announced that the state wage theft task force had secured charges against a dozen businesses – including some restaurants – and assisted over 200 workers recoup pay owed them by their employers over the past two years. In addition, they also announced that the state is expanding its efforts to simplify the process for workers to file complaints against their employers. At a cost of $10 million, the NY Department of Labor is creating a new online portal, known as the Worker Protection Management System, through which workers will be able to more easily file complaints against their employers. The new online system, which is set to be up and running in time by Jan. 2023 will also provide real-time data to the state labor department, thereby enhancing its ability to “identify violation trends.” More details.
Labor Activism
New York – This week, One Fair Wage, the leading advocate for eliminating tipping, concluded a two- day training for New York restaurant workers interested in organizing their fellow workers and running for political office. This event is part of One Fair Wage’s work to ratchet up the pressure on lawmakers in the state to pass legislation eliminating the tip credit. Twenty-five restaurant workers attended the training in person and over a dozen more attended online.
Gimme Coffee – The independent coffee shop in Ithaca, NY that was one of the first to organize into a union, announced it was transitioning from a traditional company to a co-op model, giving its employees the opportunity to “buy-in, shape the businesses’ future, and share in the profit.” Fifty percent of the 53 employees have committed to becoming worker-owners of the co-op, which they are able to do by starting a payment plan, putting in $50 every two-week pay period after logging 1,400 hours of work. Voting powers and profit-sharing kick in once a worker commits their first $50. A full share costs $1,300 for a worker-owner, whether they’re a managing director or a barista. The co-op has also adopted an open book policy for its member-workers, giving them a clear view into the company’s finances and how their labor is “valued” in the context of the business’ revenue. More details.
Starbucks – This week, Boston Mayor Michelle Wu joined workers picketing a unit in support of workers’ unionization efforts. The mayor addressed the workers and declared, “Boston stands with you.” Additionally, Starbucks Workers United announced the creation of an additional $1 million fund to support workers who have been fired, laid off, or had hours reduced as “retaliation” for their organizing activities. This is a different fund from the one announced in May where monies are specifically earmarked to support workers who go out on strike. In related news, this week saw the company lose its 200th unionization election. To date, 316 stores in 36 states are in the process of holding a union election. 204 units have voted to unionize, 43 have rejected the union, and a handful of outcomes are still undecided. More details.
Trader Joe’s – Workers at a store in Hadley, MA, voted 45-31 to become the first unit in the chain to unionize. The store has about 100 employees and they are being organized by their own independent union, Trader Joe’s United. A company spokesperson stated this week, “we are prepared to immediately begin discussions with union representatives for the employees at this store to negotiate a contract.” The company indicated that it is willing to use any current union contract for a multi-state grocery store in the region as a model for a contract, including pay, retirement, health care, and working conditions. In related news, workers at a Boulder, CO location have petitioned the NLRB to conduct an organizing election. More details.
Data Privacy
California – Last week, the U.S. House Energy and Commerce Committee advanced a comprehensive data-privacy bill in a 53-2 bipartisan vote. The bill attempts to set a national standard for how businesses, particularly tech companies, collect, and use data. As written, the bill preempts state privacy laws and as a result, most of the Californians on the committee voted against it. Additionally, it does include a private right of action component. This week, the California Privacy Protection Agency Board voted unanimously to oppose the bill as currently drafted because of the federal preemption language and what they feel is a much less consumer-friendly bill. The Board also voted to oppose any bill that similarly threatens crucial privacy protections for Californians but, via a third motion, left room for the Agency to support federal privacy legislation that provides a “true floor” that allows states to implement stronger protections. More details.
Delivery
San Francisco, CA – The city council gave final approval to compromise legislation that would keep the 15 percent delivery fee cap but allow restaurant owners to opt out of it in favor of paying more for better placement on the apps. DoorDash already uses this model in localities without a delivery-fee cap, allowing restaurants to pay a 25 or 30 percent rate to improve their promotion on the app. The bill now goes to the mayor for her expected signature. If enacted, the platforms are expected to drop pending lawsuits against the original fee cap ordinance.
Alcohol
Massachusetts – The state senate approved an amendment in a larger economic development bill that would give cities and towns the authority to allow discounted after-work drinks. In a letter sent to lawmakers, the Massachusetts Restaurant Association, citing the potential for increased insurance liability costs and predatory pricing policies, urged house and senate negotiators to drop the proposal to overturn the state’s Happy Hour ban from the final bill. More details.
Taxes
Inflation Reduction Act – Congressional Democrats have introduced an updated version of their ill-fated Build Back Better legislation and it appears that West Virginia Senator Joe Manchin will support it, improving its chances for passage. The bill contains major climate-related provisions, expands the Affordable Care Act, and significantly changes corporate tax laws. Razor thin majorities in both houses, numerous Democrats absent due to COVID-19, and a very compressed time frame will make final passage difficult. More details.
Key Takeaways
- Florida Governor Ron DeSantis expanded his attacks on “woke” corporations and capital this week, announcing his opposition to corporate ESG initiatives. Other states, notably Texas and West Virginia, have been active in this space but none have drawn national headlines on the issue like DeSantis who, in many ways, has become the voice of the Republican Party on many culture issues. Corporate brands are already revisiting DEI programs to ensure they don’t run afoul of Florida’s Stop Woke Act. Companies should expect increased scrutiny of ESG efforts as well, not only in Florida but also in other red trifecta states that follow Florida’s lead.
- Now is the time for your entire organization to engage in the California FAST Act. The California legislation is scheduled to adjourn at the end of Aug. The next few weeks will be determinative. Many legislators are uncomfortable with the legislation but they also aren’t particularly keen on opposing an SEIU priority bill. Legislators must hear the concerns of restaurant owners and franchisees in their districts to bolster opposition.
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.