Taxes
U.S. Senate – In a surprise procedural move, Senator Jacky Rosen (D-NV), asked for and received through a unanimous consent agreement a vote on the “No Taxes on Tips” legislation that has been pending before the body. Rosen is a cosponsor of the legislation introduced by Senator Ted Cruz (R-TX). Under a unanimous consent agreement, any lawmaker can go to the U.S. Senate floor and seek passage of legislation as long as no other member lodges an in-person objection at that same time. If enacted, the legislation would create a federal income tax deduction of up to $25,000/yr, with some limitations. The tax break applies to workers who typically receive cash tips reported to their employer for payroll tax withholdings. The bill also includes language calling for a $160,000 earnings limit for 2025 and then that limit would be indexed for inflation yearly. The comprehensive tax package that passed the house this week included similar language. More details.
U.S. House – The U.S. House passed President Trump’s signature tax legislation which included many industry priorities. Under the bill, tipped and overtime income will not be taxed for a four-year period. Only those workers considered highly compensated ($155,000 and above) would be ineligible for the tax exemption on tipped income. The 20 percent business income deduction was raised to 23 percent. The legislation also included tax credits for family and medical leave, and significant changes to estate taxes. Other provisions include full expensing for capital purchases, a restoration of the business expense interest deduction, and the maintaining of the tax deduction for employee shift meals. Action will now move to the U.S. Senate. More details.
Wages
Nebraska – Legislators again failed to pass a bill that would adjust the minimum wage law approved by the voters in 2022. For context, three years ago Nebraska voters approved increasing the minimum wage in stages. The current wage is $13.50/hr and is scheduled to go up to $15/hr next Jan., increasing with inflation thereafter. But the bill would have changed that. Employers would be allowed to pay 14- and 15-year-olds a $13.50/hr youth wage. And 16 though 19-year-olds could be paid the same $13.50/hr as a training wage for their first 90 days on the job. Originally, the bill would have also capped the annual inflation adjustment for the minimum wage at 1.5 percent but was amended to 1.75 percent. Senators had previously voted 33-16 to give the bill second round approval. The latest vote fell short due to an “absence” and a running out of the clock. The bill will be reintroduced again next year. More details.
Labor Policy
Labor Department – Nearly one in five workers at the agency opted to leave their jobs later this year as part of the Trump Administration’s deferred resignation program. More than 2,700 of the DOL’s 14,578 employees agreed to voluntarily separate from the agency under the exit offer which allowed federal employees to receive pay and benefits through Sept. if they resign. In a message sent to department employees this week, Sec. Lori Chavez-DeRemer said that the agency was reopening its early retirement and resignation program as part of “the next phase” of President Donald Trump’s directives to reduce the size of the federal workforce. More details.
Colorado – As expected, the governor vetoed legislation that would have made it easier to form a union. The legislation sought to eliminate a second election mandated by Colorado’s Labor Peace Act, a requirement that is unique to Colorado. Federal law allows employees to unionize with a simple majority vote, but they must participate in a second vote with 75 percent approval to determine if workers who don’t support the union have to pay representation fees. The Colorado Labor Peace Act passed in the 1940s, and bill sponsors referred to the provision requiring a second vote as “a relic of the past.” The governor voiced his opposition throughout the legislative session which already adjourned for the year. The governor had stated that without his proposed amendments, he would veto the bill. The labor community has already begun collecting signatures to put the measure on the 2026 ballot. More details.
Sustainability
Washington – The governor signed an extended producer responsibility program for packaging. The Recycling Reform Act would create an EPR program for most kinds of paper and packaging. It would also establish a statewide recycling collection list, provide curbside recycling for all homes that already have curbside trash service, establish an advisory panel and conduct a statewide recycling needs assessment. Producers would ultimately reimburse waste service providers 90 percent of recycling system costs, and that funding could be used for investment in system improvements, according to the bill. A producer responsibility organization would develop, implement, and finance the program, and the Washington State Department of Ecology would oversee it. More details.
Food Policy
MAHA Commission – The Administration released its long-awaited report, The MAHA Report: Make Our Children Healthy Again, which catalogues in detail a “chronic disease crisis,” including high rates of obesity, asthma, autoimmune conditions, and behavioral health disorders among kids. The 72-page document is a product of the MAHA Commission, which was established by President Trump through an executive order on Feb. 13. The report identifies four major drivers behind the rise in childhood chronic illness: poor diet, environmental chemicals, chronic stress and lack of physical activity, and overmedicalization. The report pins much of the blame on corporate influence in the food, chemical, and pharmaceutical industries. It also lays the groundwork for the commission to develop a strategy for addressing childhood disease, which is supposed to happen by mid Aug. according to the Feb. executive order. More details.
Ohio – Legislation was introduced that would phase in a ban on the sale of consumer products with intentionally added per- and polyfluoroalkyl substances (PFAS). The bill would ban the sale of cookware, food packaging and dozens of other products with intentionally added PFAS beginning in 2027 and would also establish a reporting requirement for all such products also beginning in 2027. More details.
Key Takeaways
- The restaurant industry was not a primary target of the MAHA Commission report. However, included in the report were two references to “fast food” as a foundational issue harming children’s health. Within the context of the report, “fast food” referred broadly to food on-the-go, including ultra-processed, pre-packaged foods (rather than specifically referring to the QSR business model). The report embodied much of the same animus that has been expressed over the years by the so-called slow food movement advocates. Those groups have been hyper critical of restaurant brands’ ingredients and supply chain practices for decades, often partnering with labor organizations in corporate campaigns. Brands would be wise to appreciate the shifting politics – a populist Republican Administration aggressively targeting corporate supply chains. The shifting politics are scrambling the old political fault lines.
The Consumer Brands Association was on Capitol Hill this week proactively pushing its vision for food labeling, ahead of the MAHA Commission report’s call for “radical transparency” in the food system. Food manufacturers and grocers are likely to lead discussions with the Administration over labeling. The outcome of those discussions will establish new expectations around menu labeling within restaurants. The industry cannot afford to sit out early discussions on these topics. As we’ve seen during state legislative sessions, there’s a lot of political momentum in this space and it may be difficult to amend legislation/regulations at the end of the process. The industry needs to nudge policymakers in the right direction early in the process; otherwise, we may be stuck with a policy solution negotiated by others.
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.