Wages
Labor Department – A coalition of U.S. business groups, including the National Restaurant Association and the International Franchise Association, filed a lawsuit seeking to block a Biden Administration rule that would extend mandatory overtime pay to 4 million workers. The groups filed a complaint in a Texas federal court late on Wednesday claiming the agency lacked the power to adopt the rule and that it would force businesses to cut jobs and limit workers’ hours. The rule would require employers to pay overtime premiums to workers who earn a salary of less than $1,128 per week (roughly $58,600 per year) when they work more than 40 hours in a week. The business groups in the lawsuit said the costs of complying with the new rule “will force many smaller employers and non-profits operating on fixed budgets to cut critical programming, staffing, and services to the public.” More details.
Illinois – Legislation to eliminate the tip credit appears dead for the year. The legislature will adjourn later today and neither the house nor the senate bill has advanced to their respective floors. While a major victory for the industry, the sponsors have vowed to reintroduce the legislation next year. More details.
Minnesota – The governor signed legislation that would increase the annual minimum wage adjustment so that it’s linked to inflation. Increases would be capped at 5 percent per year. The current law calls for annual boosts of 2.5 percent. The measure is seen as a compromise against a bill calling for a $15/hr minimum wage effective July 1. For context, Minnesota does not have a tip credit. Also included in the bill is pay transparency language, mandating that employers with 30 or more employees disclose salary ranges in job postings. More details.
Minnesota – Legislation is on its way to the governor that will increase driver pay, but at a lower rate than approved by Minneapolis officials earlier this year. The bill sets a minimum wage for drivers of $1.28/mile and $.31/minute and overrides a Minneapolis city ordinance that had set a higher minimum wage. Gov. Tim Walz, who vetoed rideshare legislation last year, says he’ll sign this bill. Uber and Lyft had previously threatened to withdraw from Minneapolis and from the state if higher wages were mandated but announced, as a result of the compromise, they will continue operating in Minnesota. More details.
Labor Policy
Colorado – The governor vetoed legislation that would prohibit captive audience meetings. Per the bill language, an employer is prohibited from disciplining or firing an employee for their refusal to attend or participate in an employer-sponsored meeting concerning religious or political matters including labor organizing. The bill allowed for a private right of action. In his veto letter, the governor wrote that he agreed with many of the sponsors’ goals, but he worried that the “definitions of ‘political matters’ and ‘religious matters’ are so broad that they are unworkable and would result in unintended consequences Polis added that “no employee should be forced to attend a meeting that focuses on the negative aspects of union participation,” and that he would have supported a bill focused on that idea. More details.
Colorado – The governor signed the nation’s most sweeping artificial intelligence regulation bill. The new law establishes comprehensive rules for the deployment of AI systems and will establish foundational guardrails for developers utilizing high risk AI systems with the goal of reducing algorithmic discrimination – particularly in employment decisions. More details.
Illinois – The house passed senate-approved legislation that would prohibit captive audience meetings. The legislation would prohibit employers from firing, disciplining, or threatening adverse employment actions against workers who refuse to attend meetings on political matters, including unionization. There are minor differences in the two bills that will have to be worked out but the bill is expected to move on to the governor for his signature. If signed, Illinois would become the seventh state to enact this type of law. More details.
Labor Activism
California – Legislation passed the senate that would extend unemployment benefits to striking workers. The same legislation passed the legislature last year but was vetoed by Gov. Newsom citing concerns about increased unemployment insurance debt and its potential impact on employers. New York and New Jersey allow striking workers to collect unemployment insurance and have recently expanded eligibility requirements for accessing those funds. It is unclear if this version of the bill will advance further. More details.
Molson Coors – Teamsters Local 997 and Molson Coors have agreed to a three-year contract, ending the over three-month-long workers’ strike at Molson Coors brewery in south Fort Worth. The new contract is the first negotiated contract between the sides since 2021. It includes provisions to increase wages, improve benefits and restore health care for retired members. Last week, Teamsters leadership spoke out against the company at their annual shareholders meeting in Golden, Colorado, and demanded the company to negotiate with the workers and end the strike. Those same strikers had recently traveled to Ohio and Georgia to picket additional breweries calling for a nationwide boycott of Coors and Miller products. More details.
SEIU – April Verrett has been elected president of the Service Employees International Union (SEIU), the second-largest union in the United States, making history as the first Black person to serve in the role. A Chicago native and granddaughter of an SEIU union steward, Verrett has served as SEIU’s secretary-treasurer since 2022, when she was elected out of the Local 2015 chapter in Los Angeles – the state’s largest local union. She has served in labor organizing for more than two decades and was previously chair of the SEIU National Home Care Council and co-chair of the union’s National Organizing Committee. More details.
Misc.
Minnesota – The governor signed legislation eliminating most “junk fees”. Effective Jan.1. restaurants are now prohibited from adding service fees and other charges to tabs and must incorporate those costs into up-front pricing. There are exemptions for delivery, catering, and certain tipping policies. More details.
Key Takeaway
- Over the next few months as NLRB-initiated cases work their way through the process, the Cemex precedent will increasingly be applied. Under the new standard, the NLRB holds that if an employer is confronted with a demand for recognition, the employer has two options: (1) agree to recognize the union as the bargaining representative; or (2) refuse to recognize the union, in which case the employer must promptly (within two weeks of the union’s demand for recognition) file a petition to test the union’s majority support and/or challenge the appropriateness of the bargaining unit (assuming that the union has not already filed a petition). The NLRB also contends that if the employer fails to timely file the petition, the failure to do so will be considered a violation of the NLRA and could result in the issuance of a bargaining order. The restaurant industry is uniquely vulnerable to this type of “quickie unionization” and needs to prepare accordingly.
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.