Wages
Connecticut – Legislation to eliminate the tip credit by 2023 was approved by a joint committee by an 8-4 vote. The bill now moves to the full senate for consideration. The legislation was expected to be approved at the committee level but will likely face stiffer opposition as it continues through the process. More details.
Maryland – Legislation to eliminate the tip credit by 2027 failed to meet the legislative crossover deadline. It is procedurally dead for the year as a stand-alone bill. However, there is a chance that it, or similar language, could be attached to pending minimum wage legislation under consideration. That legislation would expedite the already scheduled wage increase to $15/hr by 2024, instead of 2025. The governor’s proposal to further index the wage to inflation was removed from the bill. More details.
Disney – About 32,000 hourly workers at Disney World will get raises equal to $3/hr by the end of the year, and most will get raises of about 37 percent of their current pay by 2026 under a tentative five-year labor deal reached with a group of unions on the property. The provisions include an $18/hr starting minimum wage as of this December rising to $20/hr by 2026. More details.
Paid Leave
Minnesota – Paid leave supporters held a rally in the state capitol rotunda, advocating for 12 weeks of paid family leave with up to an additional 12 weeks paid sick leave. Last week, a senate committee gave a “do pass” recommendation to the house-approved bill. It is now awaiting a detailed analysis of the costs from the nonpartisan Legislative Budget Office. Budget targets announced by the governor and legislative leaders earmark $668 million for startup costs. The governor has indicated his willingness to negotiate on benefit levels. More details.
Labor Policy
U.S. House – The House Education and the Workforce Committee issued a subpoena to the National Labor Relations Board (NLRB), alleging officials of the labor body failed to conduct fair and impartial union elections at Starbucks. In the cover letter, the top Republican on the committee, Representative Virginia Foxx, said an NLRB report from Feb. this year confirmed certain allegations detailed in a complaint from Starbucks to the NLRB in Aug. 2022. Starbucks in the letter to Chairman Lauren McFerran and General Counsel Jennifer Abruzzo said NLRB agents helped Workers United win elections by manipulating the voting process and collaborated with the union to cover up their actions. Foxx said an NLRB hearing officer found merit to certain objections made by Starbucks regarding the representation election involving its Overland Park, Kansas store. More details.
NLRB – The agency’s general counsel, Jennifer Abrzzo, reissued her previous request for regional officials to be on the lookout for cases that could be used to overturn more than a dozen agency precedents that she considers anti-worker. In a new directive, Abruzzo outlined 15 different precedents that she believes need to be revisited by the NLRB’s board, which is currently controlled 3-1 by Democrats, with one GOP vacancy. In Aug. 2021, Abruzzo issued a list of priorities that included these precedents, as well as dozens of others that the general counsel said the NLRB has since made progress on or have received board decisions. This week’s update is a sign that there are still some areas in which she feels staffers have yet to sufficiently identify test cases that could be used to expand labor rights to workers. More details.
Illinois – An amendment was added to pending legislation calling for pay scale information in job postings. The new pay transparency language would expand the bill to require Illinois employers to include both “pay scale and benefits” information in the job posting. “Pay scale and benefits” is defined to mean “the wage or salary, or the wage or salary range, and a general description of the benefits and other compensation the employer reasonably expects to offer for the position.” It would also require employers to announce, post, or otherwise make known all opportunities for promotion to all current employees no later than the same calendar day that the employer makes an external job posting for the position. And lastly, it would significantly reduce applicable civil penalties. In particular, it would provide employers up to 7 days to cure a violation upon notification or face a civil penalty of $100 per day for each day the violation continues after the notice period. If the bill becomes law, Illinois would join a growing number of states that require employers to publish wage information in a job posting, including California, Colorado, and New York. More details.
Michigan – The governor signed legislation to repeal the state’s right-to-work law. Established by Republicans in 2012, the law allows workers in unionized jobs to opt out of paying union dues and fees. Michigan, a state steeped in labor history, could become the first state in nearly 60 years to reverse its right-to-work law. Late in the process house leaders added a $1 million appropriation to the Department of Labor and Economic Opportunity to respond to public questions about the legislation and implement it. The appropriation means that the legislation is not subject to a public referendum in which voters could reject the law. More details.
Labor Activism
California – A senate committee advanced legislation requiring the Department of Public Health to make a list of all certified food handler training programs along with the cost of each program available on its website by Jan. 1, 2025. Local public health departments would be required to provide a link of this page on their website, or include the same list on their website. In addition, the bill would require an employer to pay the employee for any cost associated with the employee obtaining a food handler card. That includes but is not limited to the time it takes for the employee to complete the training, the cost of the food handler certification program, and the time it takes to complete the certification program. The bill further requires an employer to relieve an employee of all other work duties while the employee is taking the training course and examination. And, an employer would be prohibited from conditioning employment on an applicant or employee having an existing food handler card. The bill was originally filed in response to the New York Times piece regarding the National Restaurant Association and its ServSafe program. The bill now moves to an additional senate committee. More details.
Starbucks – Next Wednesday, Starbucks CEO Howard Schultz will voluntarily appear before the senate HELP committee. The committee chair, Sen. Bernie Sanders, has entitled the hearing, “No Company is Above the Law: The Need to End Illegal Union Busting at Starbucks.” Sanders has been hounding Schultz for months to answer questions before his committee about the chain’s handling of a unionization effort within its ranks. Schultz was invited by Sanders several weeks ago to appear voluntarily before the Senate HELP committee but he declined at that time. It is expected that in addition to a grilling of Schultz about Starbucks’ reaction to the organizing drives, the forum will be used to criticize all industry employers and the restaurant business model itself. There will be a live video of the hearing. More details.
Starbucks – Unionized Starbucks baristas staged a work stoppage at over 100 restaurants in 40 cities to “welcome” their new CEO Laxman Narasimhan, who officially took over the company this week at their annual meeting. In addition, striking baristas from Oregon and Washington converged for a midday protest outside Starbucks headquarters in Seattle. Among the items on the agenda, some investors including New York City pension funds have put forward a resolution this year urging the company to conduct a labor-rights audit. More details.
Starbucks – During a four hour bargaining session this week, Starbucks Workers United unveiled their contract demands on behalf of the nearly 280 stores that have voted to organize. Their initial demands call for a $20/hr starting wage nationwide, a 37-hour week guarantee for full-time employees, a 100 percent employer-covered health-care plan for full- and part-time workers and credit card tipping at all stores. While they are asking for $20/hr as a minimum nationwide, they are asking for a starting hourly wage of $25.40 /hr in the most expensive regions. But the main priority for the union is guaranteed hours and predictable schedules. Workers want a guarantee of 37 hours a week for full-time staff and 20 hours for part-timers, plus the right to have the same schedule every week or for a month at a time.
Sustainability
U.S. Congress – As expected, President Biden vetoed a congressional resolution that would block the Administration from allowing retirement plans to consider ESG in their investment decisions. The vote was 216-204 to adopt a joint resolution that would prevent the Labor Department from enforcing a rule that makes it easier for plan managers to consider ESG factors when they make investments and exercise shareholder rights, such as through proxy voting. More details.
Covid-19
Illinois – The governor announced that the state has earmarked $50 million to help restaurants make the transition from pandemic survival to stable, ongoing success. The funds will be awarded to all qualifying establishments in grants of $5,000 to $50,000, with the amount determined by how much revenues fell during the crisis. Restaurants that previously received financial aid from the state are ineligible for the new round of grants. Foodservice recipients of federal aid, including money from the Paycheck Protection Program (PPP) and the Restaurant Revitalization Fund (RRF), can still qualify. More details.
Key Takeaways
- The labor community has historically been very effective at undergirding their political arguments with academic studies and economic research. As the conversation around a $15 minimum wage becomes increasingly stale and discussions around a $20 minimum wage become increasingly mainstream, labor-friendly researchers have predictably begun releasing new studies validating the need for higher minimum wages – in fact two new reports were released this week. Conversely, the industry’s traditional arguments against wage increases – job losses and the inability to pass on higher costs to consumers – have been upended by the current economic climate. Regardless of wage levels, operators are still facing labor shortages so the job loss argument is moot. And major brands have been quite candid about passing on price increases yet traffic levels remain strong. The industry needs to recommit itself to pursuing new research that repositions the argument away from wage levels and toward the impacts on inflation and the increased desirability of automation.
- Brands need to prepare themselves for Howard Shultz’s appearance next week before the Senate HELP Committee. While it is not uncommon for CEOs to be raked across the coals in congressional hearings – executives from airlines, banks, tobacco, tech and most recently railroads are familiar faces – this is new for the restaurant industry. While it will be mostly about Mr. Schultz, Starbucks and the unionization campaign currently underway, we should also expect a hostile examination of the restaurant business model and an assault on QSR’s, joint employer liability and tipping. Brands should prepare accordingly.
Podcast
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