Wages
Hawaii – House legislation to raise the state minimum wage to $18/hr by 2028 remains alive however similar legislation in the senate died this week. The amended house bill will be the subject of much compromise and debate before the legislature adjourns for the year. Chances for final passage remain high. More details.
Pennsylvania – The Independent Regulatory Review Commission unanimously approved a proposal by the governor dramatically raising the monthly tip threshold servers must meet in tipped income in order for employers to leverage the full tip credit. Currently, the server wage is $2.38/hr provided the worker makes at least $30/month in tips. Under the newly approved rule, that monthly tip threshold will rise to $135/month to adjust for inflation going back to 1977. The rule also updates state regulations to follow federal guidance on who employers can classify as a tipped employee. Under the new rule, an employee must spend at least 80 percent of their time on tipped work to be classified as a tipped employee and paid below the $7.25/hr threshold. The new rule could take effect in the coming months. More details.
Pasadena, CA – The city announced that effective July 1, the local minimum wage will rise to $16.11/hr. In 2016, the city council passed an ordinance increasing the minimum wage to $15/hr by 2020 and tying it to inflation thereafter. More details.
Charter / Spectrum – The company announced it is now offering a minimum starting wage of $20/hr including target commissions for all employees across its 41-state service area. It is the latest step of a multiyear commitment that began in 2018 with the establishment of a $15/hr minimum starting wage. Charter announced in April 2020 that it would permanently raise its starting wage to $20/hr in 2022, nearly triple the federal minimum wage of $7.25/hr. More details.
Paid Leave
Minnesota – A senate committee advanced Republican-sponsored legislation to allow for a new insurance product that employers of all sizes could offer to cover time off for a sick child or parent, paternity leave, or adoption. For companies with fewer than 50 employees, it creates business tax credits of up to $3,000 per worker enrolled in a paid leave program. The proposal caps tax credits at $50 million statewide, meaning 16,700 workers could be covered if each business got the maximum per employee credit. The proposal is markedly different from the plan working through the Democratically-controlled house. That proposal is a more traditional state-run paid leave program and is supported by the governor. Chances for final passage are highly unlikely. More details.
Labor Policy
Massachusetts – The state supreme court ruled that franchisees could be considered companies’ employees under state law in some circumstances. The seven-member Massachusetts Supreme Judicial Court unanimously held that a state law governing the classification of workers can apply to franchise relationships because it does not conflict with a U.S. Federal Trade Commission rule governing franchising. The ruling came in a bid by 7-Eleven franchisees to revive a proposed class action claiming they are actually glorified store managers and should be paid the minimum wage and receive other protections afforded to employees under Massachusetts law. More details.
Labor Activism
Starbucks – Employees at a store in downtown Seattle voted 9-0 to unionize. The result, announced by the National Labor Relations Board after a count on Tuesday, takes the number of unionized company-owned U.S. stores to seven, out of nearly 9,000. The Seattle store is about a 10-minute drive from Starbucks’ main corporate headquarters. More details.
Alcohol
Maine – The senate passed
house-approved legislation that allows retailers to sell to-go alcoholic
beverages until March 30, 2025. The senate passed the measure following a house
vote earlier this month. Neither vote included a roll call, which means there
were no major objections. The bill merely
extends the policy first enacted through executive order by the governor in
March 2020 after the pandemic forced the shutdown of all bars and restaurants
for months. It was further extended through April of this year. The
governor will likely sign the bill. More details.
Sustainability
Hawaii – Two senate committees advanced an amended version of house-passed legislation that would establish an extended producer responsibility program in the state. The bill would require certain producers of consumer goods to register with the state health department and pay an annual fee based on the amount of packaging volume the covered producer places on the market each calendar year. Additionally, the bill provides for the deposit of fees into a special extended producer responsibility fund and some of those monies be allocated toward the creation of a report that assesses the resources needed to reduce the volume of packaging waste sent to landfills. The bill is now in an additional senate committee. More details.
Washington – The governor signed legislation setting a target to reduce organic waste disposal by 75 percent by 2030 and increase the volume of edible food recovery 20 percent by 2025 (both relative to a 2015 baseline). The new law defines organic waste as manure, yard debris, food waste, food processing waste, wood waste, and garden waste. Businesses with at least eight cubic yards of weekly organic waste will be required to have some form of on-site management or collection services in place by 2024, with that threshold dropping to cover generators of smaller volumes in 2025 and 2026. The bill requires certain local governments to adopt compost procurement requirements, expands funding to support farm usage of compost, requires new local regulations to allow for the siting of organics processing facilities, establishes first-in-the-nation label and color standards for compostable products, updates liability standards for food donation and creates a Washington Center for Sustainable Food Management. More details.
Walmart – The company announced it has signed on to the Pacific Coast Food Waste Commitment, which is working to reduce food waste by 50 percent along the West Coast by 2030. By signing on to the food waste pledge under the Pacific Coast Collaborative, Walmart is joining several other major retailers as part of one of the largest public-private partnerships dedicated to food waste reduction. Key industry supplier Sodexo also signed onto the effort. More details.
Packaging
Consumer Reports – This week, the organization released a study of the proliferation of PFAS (per- and polyfluoroalkyl substances) used in hundreds of packaging products. PFAS makes products resistant to heat, water, oil, and corrosion. They are sometimes referred to as “forever chemicals” because they are resistant to breaking down naturally in the environment and can remain in people’s bodies for years. After testing more than 100 packaging products from 24 large national restaurant chains and grocery stores, the researchers found that nearly half had at least one packaging product with high PFAS levels of more than 100 parts per million. In response, many major industry leaders made commitments in the space including Restaurant Brands International (RBI) and Chick-fil-A among others. RBI updated its sustainability pledge saying it now prohibits use of one type of PFAS, perfluorooctanoic acid (PFOAs) from all paper and packaging products across all its brands. The company said it will phase out all added PFAS from guest-facing packaging globally by the end of 2025 or sooner. Chick-fil-A announced it has eliminated intentionally-added PFAS from all newly produced packaging going forward in its supply chain. While some legacy packaging may still be in restaurants, they expect it to be phased out by the end of this summer. More details.
Privacy
Iowa – House-passed legislation that would have allowed consumers to confirm whether a controller is processing the consumer’s personal data and to access and /or delete personal data provided by the consumer failed to meet its crossover deadline in the senate and is dead for the year. If passed, consumers also could have obtained a copy of their personal data and opted out of targeted advertising or the sale of personal data. There was no private right of action in the legislation and a similar bill will likely return next year. More details.
Utah – The governor signed legislation that allows Utah residents the right to notice, access, portability, and deletion, but does not offer people the right of correction. There are also exemptions for certain businesses. It includes an opt-out section that allows people to deny companies the right to target them with advertising or sell their personal information. It applies to companies with an annual gross revenue of $25 million and those that conduct business in Utah or produce goods for Utah residents. The bill also only applies to businesses that “control or process” the personal information of 100,000 Utah residents or “derive over 50 percent of its gross revenue from the sale of personal data and controls or processes personal data of at least 25,000 residents.” Additionally, the new law does not include provisions allowing for a private right of action. More details.
Key Takeaways
- The practice of tipping (and by association the restaurant industry) was dragged into the culture wars this week when the author of the 1619 Project of the New York Times posted comments regarding her opinions of the relationship between tipping and racism. Nikole Hannah-Jones stated that, “tipping is a legacy of slavery and if it’s not optional then it shouldn’t be a tip but simply included in the bill.” The post solicited harsh reactions online but did serve to further underscore the increasing adoption of this narrative by activists. Brands need to stay aware of this emerging dialogue.
- The SEIU is making a renewed organizing push in airports. The union is primarily focused on organizing baggage handlers, cabin cleaners, and other contract workers, but restaurant and retail locations within airports have increasingly become targets as well. And, as organizing ramps up and potentially merges with Starbucks organizing efforts, restaurants could find themselves in the crosshairs.
- The precedent set in the Massachusetts 7-Eleven case could have implications for other brands. Companies need to examine their potential exposure and understand that labor advocates may use the precedent in ongoing corporate campaigns in the state.
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.