Wages
Michigan – The state supreme court announced it will hear arguments over whether a legislative maneuver that curtailed minimum wage and paid sick leave initiatives was legal. Earlier this year, a three judge appeals court panel reversed a lower court decision, preventing pending minimum wage and paid leave laws from going into effect Feb. 19. The hourly minimum wage was set to rise to $13.03/hr (the server wage to $11.73/hr). The panel ruled that the legislature, controlled by Republicans at the time, did have the constitutional authority in 2018 to adopt a pair of petition initiatives and amend their respective policies, instead of having the initiatives go to the ballot that Nov. In the decision, the court wrote there is no explicit language in the constitution banning the legislature from adopting laws initially brought forward by petition initiative and amending those laws in the same legislative session. No date for an initial hearing has been set. For now, Michigan’s minimum wage remains at $10.10/hr with the tipped minimum wage at $3.84/hr. More details.
Pennsylvania – Legislation to raise the state minimum wage advanced out of the house and is on its way to the senate. It would raise the minimum wage to $15/hr by 2026 and then index it to inflation thereafter. If passed, the bill also would set the tip credit at 40 percent making the server wage $9.00/hr. It faces an uncertain future in the senate. House leaders may seek to embed it in other legislation that is moving such as the state budget package. More details.
Chicago, IL – The new mayor and progressive city council members held a press conference to officially kick off their efforts to raise the city’s minimum wage and eliminate the tip credit. The mayor committed that he would address the issue during his first 100 days in office. The One Fair Wage campaign has cited the issue as a “fight for justice.” As of July 1, the city’s minimum wage is already slated to go to $15.80/hr with a server wage of $9.48/hr. More details.
Paid Leave
Maine – The senate advanced proposed paid family leave legislation. As introduced, the bill mandates 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. The bill has additional committee stops before heading for final votes. More details.
Nebraska – Activists began a signature gathering effort for a proposed 2024 ballot initiative to establish a statewide paid sick leave law. The signature gathering thresholds in the state are relatively low and if the ballot language is written properly, the proposal is likely to appear on the 2024 ballot. More details.
Labor Policy
U.S. Senate – In a perfunctory messaging exercise, the HELP Committee chaired by Sen. Bernie Sanders, advanced three pieces of pro-labor legislation on party line votes this week, including the PRO Act which would dramatically reshape the legal landscape in favor of unions and workers relative to their employers. In addition to that, the committee advanced the Paycheck Fairness Act, an effort to close gender pay gaps, as well as legislation guaranteeing at least seven paid sick days per year to workers at businesses with 15 or more employees. None of the bills have any chance of becoming law. More details.
California – Next week, a senate committee will hear the 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. More details.
Maine – The governor has until June 27 to act on legislation that would make 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.) Maine’s governor can either sign the bill, veto it, or let it become law without her signature. 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 provides an exemption for religious employers. More details.
New York – Captive audience legislation is on its way to the governor for her expected signature. The bill prohibits employers from coercing employees into attending or participating in meetings sponsored by the employer concerning the employer’s views on political or religious matters, including union organizing. More details.
New York – Wage theft legislation did not advance before the legislature adjourned. If passed, the bill, among other things, could have frozen the assets of a restaurant operator and created personal liability for employers. The bill would have created a prejudgment writ of attachment, creating a lien in the case of an accusation of wage theft, essentially penalizing the employer first and then determining if the accusations have any merit. The bill was a replacement for similar legislation, the SWEAT Act, that was derailed in the last weeks of session. Similar legislation will almost certainly return next year. More details.
Labor Activism
Starbucks – The NLRB ruled this week that the company broke the law in handling labor issues at a now-shuttered Starbucks store in Seattle. They ruled that Starbucks violated fair labor practices by telling an employee they couldn’t testify at an NLRB hearing (despite a board subpoena) without finding coverage for shifts and by prohibiting union activities during company-paid breaks. Employees of the store in the Capitol Hill area were the first in Seattle to unionize in Dec. 2021, and the votes were certified about three months later. Last Dec., Starbucks closed the store citing safety concerns. The store employees reached a contract with the company before it permanently closed. More details.
Starbucks – Workers at about 150 unionized stores across the country went on strike today over a dispute over the coffee chain’s policy for Pride Month decorations in stores. Workers United, the union representing organized stores, is claiming that the company has restricted decorations celebrating Pride month in some locations, demonstrating a “hypocritical treatment of LGBTQIA+ workers.” Starbucks has denied this claim. Workers United has alleged instances in at least 22 states when workers have not been able to decorate and filed an unfair labor practice charge over the alleged change in policy. Strikes could continue into next week. More details.
Key Takeaways
- This week brought the latest example of a coordinated governmental scrutiny of a brand. On Tuesday, Sen. Bernie Sanders announced that he is launching a Senate investigation into “the dangerous and illegal conditions” at Amazon facilities. The very next day, the Federal Trade Commission (FTC) filed a lawsuit against the company alleging the retail giant worked for years to enroll consumers without consent into Amazon Prime and made it difficult to cancel their subscriptions to the program. This is on top of last year’s OSHA raids at numerous Amazon fulfillment centers. At root is the labor community’s dissatisfaction with how the company has pushed back against unionization efforts across its system. We have previously reported on at least seven agencies within the Biden Administration signing MOU agreements to coordinate intergovernmental efforts to protect workers’ ability to organize. The events of this week, both from the White House and Capitol Hill, demonstrate that that synchronized effort is alive and well and brands should take note.
- A new study recently released by the Wharton School of Business at the University of Pennsylvania determined that instead of large increases in the minimum wage, a better option for low-wage workers is a combination of a modest increase and tax credits like the Earned Income Tax Credit (EITC). The study, entitled “The Microeconomic Dynamics of Labor Market Policies,” validates significant previous research that the tax code remains the very best way to improve the buying power of lower wage workers and that large mandated wage increases are inherently inflationary. The study showed that in the long run, a big jump in the minimum wage to $15/hr lowers employment rates of approximately 60 percent of non-college workers who initially earned less. The earning losses are concentrated among a fifth of the workers who earned less than $10/hr before the wage increase. The study needs to be incorporated into industry talking points.
- The industry finds itself in a precarious position in Chicago with regard to the minimum wage. The One Fair Wage campaign to eliminate the tip credit is in need of a high profile national victory and Chicago could be it. With the city being the historic (and still partial) home to the National Restaurant Association, as well as host to the trade group’s annual convention and show, the symbolism of a direct assault on the industry by the city leaders can’t be underestimated. The industry’s strong reaction to the FAST Act in California was able to at least temporarily curtail that onerous legislation. A similar, vigorous response is needed in Chicago to not only defeat that proposal but dampen the enthusiasm for similar proposals elsewhere.
Podcast
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