Wages
Arizona – The senate approved an industry-supported constitutional amendment, advancing the measure to the Nov. ballot. It will adjust the state’s tip credit law. Under current law, the tip credit stands at a permanent $3/hr. The measure would set a tip credit of 25 percent going forward. The effort is in direct response to a pending minimum wage ballot initiative that would phase out the tip credit by 2027. If both measures are approved by voters, the legislature’s constitutional amendment will override the ballot initiative’s elimination of the tip credit. More details.
Massachusetts – The state supreme court rejected arguments from the Massachusetts Restaurant Association (MRA) that the pending initiative to eliminate the tip credit should be tossed off the ballot. MRA argued that the measure violated the state’s single subject rule which is intended to minimize voter confusion by ensuring that a ballot question does not touch on more than one policy area. The MRA contended that because the proposed measure addresses two separate policy areas (eliminating the tip credit by 2029 and allowing for tip pooling) it, therefore, violates the single subject rule. Proponents will now begin collecting the final signatures to put the measure on the ballot. The MRA will continue to oppose the measure. More details.
Trump Campaign – Former President Trump, campaigning at a rally in Nevada, said that his administration would eliminate taxes on tipped income as a “first thing” if he is elected. Any change to the taxation of tipped income would require an act of the U.S. Congress. Lawmakers will have a chance to rewrite the country’s tax policy in 2025 when much of Trump’s 2017 tax cut package expires. Tips weren’t included in the original legislation but Congress could address the issue in any overhaul or any extension that lawmakers attempt next year. The move was largely seen as an overture to Latino voters who represent a significant portion of the hospitality workforce in Nevada, a critical swing state. More details.
Labor Policy
OSHA – The Occupational Safety and Health Administration (OSHA) sent its proposed standard on indoor/outdoor heat illness prevention to the White House’s Office of Information and Regulatory Affairs (OIRA) for review. OIRA review is the final step OSHA must complete before issuing a proposed standard. Once OIRA’s review is complete, OSHA will publish the proposed standard in the Federal Register and employers and other interested parties will have the opportunity to comment. The proposal is expected to include temperature levels triggering coverage under the standard, as well as acclimatization protocols employers must follow for new workers and workers returning from an absence, mandatory breaks, and employee training. OSHA has been working on a proposal since early 2021. More details.
California – In a loss for rideshare companies, an appellate court upheld most of a 2019 law, AB-5, that requires companies to treat their drivers as employees not independent contractors. That law was ultimately overridden by the voter-approved Proposition 22. (Rideshare companies placed it on the ballot and voters approved it.) Proposition 22 has also faced its own legal challenges. While the ruling does not impact rideshare operators in the state, legal experts consider it a setback for Uber and Lyft, due to the fact that the courts upheld the state’s authority in this space. More details.
Vermont – The governor signed legislation mandating pay transparency in job postings and advertisements. Effective July 1, 2025, employers with at least five employees must include the compensation or range of compensation for the advertised position. The law applies not only to positions “physically located in Vermont”’ but also any remote positions that will predominantly perform work for an office or work location physically located in Vermont. The law applies to positions that are open to internal or external candidates or positions into which current employees can transfer or be promoted. More details.
Starbucks – The U.S. Supreme Court sided with the company in its dispute over the dismissal of several pro-union employees at a unit in Tennessee (the so-called Memphis Seven). In an 8-1 decision, the U.S. Supreme Court trimmed the National Labor Relations Board’s (NLRB) authority to seek judicial injunctions while the agency’s in-house enforcement proceedings are pending. The decision has broader implications over the ability of the NLRB to intervene in cases of suspected suppression of labor organizing. Starbucks contended in its petition that all district courts should weigh the same four criteria (a four-part test) to determine if an action constituted an unfair labor practice. The court agreed with Starbucks’ contention that the more-stringent four-point test should have been applied and should be the standard employed by all district courts going forward. More details.
Misc.
California – The senate unanimously approved 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 becomes effective July 1 but the industry has continued to receive conflicting compliance guidance from the state attorney general’s office. If passed, the bill means restaurants would continue to operate as they currently do, disclosing any extra fees on menus, websites, or reservation notices. Action now moves to the assembly. More details.
Sustainability
New York – Senate-passed Extended Producer Responsibility (EPR) legislation failed to advance out of the assembly before the legislature adjourned and is dead for the year. The bill would have funded state recycling efforts and banned certain chemicals in packaging as well as set recycled content requirements and plastic reduction thresholds. Additionally, the bill would have installed the preferred producer responsibility organization model of industry-led groups and provided added flexibility for how they can meet certain targets. More details.
Key Takeaways
- The significance of the SCOTUS action in the Starbucks case can’t be underestimated. Not only did the NLRB suffer a serious blow to one of their key strategies – aggressive expansion of injunction powers – but the nature of the lop-sided 8-1 vote should be a wake-up call for the agency. Both conservatives and liberals on the court overwhelmingly agreed that current remedies with regard to injunctive relief are equally fair to both employers and unions and the traditional legal process is working. The decision should temper enthusiasm at the agency for going outside the traditional norms to put their finger on the scale on behalf of labor unions.
- Over the last ten days, the industry has gotten significant clarity on what the minimum wage / tip credit ballot landscape will look like this Nov. With the pending measure in Michigan off the ballot, the proposal in Massachusetts on the ballot, and now a competing industry-led proposal in Arizona, we have significantly more certainty on what lies ahead. Industry resources will be split between Ohio, Missouri, Massachusetts, and Arizona and industry leaders need to move quickly to assess each state – chances for success, the dollars necessary to prevail, and coalesce around strategy.
Podcast
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