Wages
Arizona – The senate voted down an industry-supported ballot measure that would have adjusted the state’s tip credit law. Under current law, the tip credit stands at a permanent $3/hr. The rejected measure would have set a tip credit of 25 percent going forward. The effort was in direct response to a pending ballot initiative that would increase the state minimum wage while eventually eliminating the tip credit by 2027. It is possible another effort can be made before the end of the session to place the measure on the 2024 ballot. More details.
Minnesota – The governor signed legislation that will increase driver pay, preempting a higher rate 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. The governor vetoed rideshare legislation last year. 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.
Seattle, WA – The city council delayed by one week voting on an ordinance to replace the existing minimum wage law for food-delivery drivers. The new proposal sets a per hour minimum of $19.97/hr for “engaged” time, or when making deliveries. The current wage level, according to delivery companies, is much higher. It was approved unanimously two years ago but went into effect this past Jan. It requires companies to pay drivers a minimum $.44/minute and a minimum per-mile amount of $.74 while making a delivery, or a minimum of $5/order. DoorDash said the law requires the company to pay drivers in Seattle at least $26.40/hr before tips and pay for mileage – well above the city’s $19.97/hr minimum wage. There is also a per-mile minimum of $.35. The new proposed ordinance, in addition to effectively setting a $19.97/hr cap, eliminates the per-minute rate. The proposal also eliminates the ability for the city to require certain data from the companies related to driver compensation and time worked. It further reduces how long on-demand offers are made available to drivers; calculates pay over an earnings period versus per-offer, and; restricts a rule that gives drivers a private right of action to sue the companies. The vote is now scheduled for June 4. More details.
Paid Leave
Delaware – Paid leave legislation was defeated and is dead for the year. It would have required all employers to provide their employees at least one hour of earned sick time for every 30 hours worked. The bill would have given workers the right to sick and safety leave after 90 days of employment with a company, paid at the employee’s regular wage and benefit rate. The benefit was capped at 40 hours per year and could have been carried into the next year. Sick and safety leave applies to mental and physical needs, as well as time needed to care for a family member. Under the bill, employers with nine employees or less could have offered this benefit as unpaid time, but their job would remain protected during that time. More details.
Labor Policy
NLRB – President Biden nominated Joshua Ditelberg, a partner at the Chicago-based firm Seyfarth Shaw, to fill a Republican vacancy on the National Labor Relations Board (NLRB). He also renominated current Board Chair Lauren McFerran for another term. She was first appointed in 2014 but her term is set to run out on Dec. 16. If confirmed, she would be able to stay on the board for an additional five years. Democratic appointees have held a 3-1 majority on the independent agency’s board since the expiration of former chair John Ring’s term in December 2022. Should both Ditelberg and McFerran be confirmed by the U.S. Senate in the coming months, it would theoretically lock-in a Democratic majority until at least August 2026. More details.
Illinois – Legislation is on its way to the governor’s desk 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 were minor differences in the two bills that were worked out over the last few days of the legislative session and the governor is expected to sign it. Illinois will now become the eighth state to enact this type of law. More details.
Sustainability
Minnesota – The governor signed legislation making Minnesota the fifth state to pass extended producer responsibility for packaging. The new program has several elements familiar to the other state laws including an initial needs assessment, the requirement to identify a producer responsibility organization, eco-modulation, as well as target reduction, reuse, and recycling goals. Notable exemptions from the covered material list include paper products used for a newspaper or magazine print publications, and covered materials that a producer distributes to another producer. The bill requires producers to choose a producer responsibility organization by Jan. 1, 2025. The PRO then has to submit a stewardship plan by Oct. 1, 2028. The bill allows for multiple PROs after the first PRO plan expires. A Producer Responsibility Advisory Board is also established under the bill, which has to hold its first meeting by March 1, 2025. The new law was opposed by the American Forest & Paper Association but supported by the major trade group representing packaging producers. More details.
Labor Activism
Minneapolis – Workers at celebrity chef Ann Kim’s Uptown restaurant, Kim’s, notified management of their intention to unionize. Roughly 60 employees (a super majority of the staff) delivered a petition directly to the chef calling on the business to recognize their union and negotiate a contract. Workers are calling for “respect, stability, and better pay and benefits.” Citing cuts, on-call days, and inconsistent hours, the workers say they aren’t able to count on their schedule or get the hours they need to pay rent. The workers, seeking to be represented by UNITE HERE Local 17, say that even with the company having a surcharge model (Minnesota has no tip credit) that enables it to “elevate wages for everyone,” hourly pay for kitchen workers at Kim’s is similar to comparable Minneapolis restaurants while service staff say they earn less under the model than they would with earning tips. With Minnesota’s new junk fee law, which is set to go into effect in 2025, banning restaurant surcharges that don’t go directly to workers in the form of gratuities, Kim’s current no-tipping model is likely to change before that time. The union also represents over 6,000 workers in Minnesota hotels, airport restaurants, craft beverage makers, sports stadiums, university cafeterias, and more. More details.
DEI
Starbucks – Florida Attorney General Ashley Moody filed a complaint with the Florida Commission on Human Relations seeking an investigation into the company. The complaint highlights several company policies including the goal to make its staff at least 40 percent people of color. The complaint also notes the “anti-bias” training the company provides to employees. She said the investigation will attempt to determine if the company’s diversity policies violate state law. More details.
Illinois – Legislation is on its way to the governor that would ban the collection of credit and debit card interchange fees for sales taxes, excise taxes and tips for services. The ban, which is scheduled to take effect on July 1, 2025, would be the first of its kind in the nation. The measure, dubbed the Interchange Fee Prohibition Act, was included as part of the state’s budget, which was passed by the state’s legislature earlier this week. Illinois Governor J.B. Pritzker has indicated he will sign the bill. More details.
Key Takeaways
- The fine dining segment now has two high profile union organizing campaigns underway. The Restaurant Opportunities Center is involved in both, one at Lodi in New York City and one at Kim’s in Minneapolis. No one should be surprised that organizing campaigns have taken hold in these markets. Operators in New York City and Minneapolis (particularly those that are nearby and within the same segment, i.e., share workers) should assume that organizers are talking to their workers and prepare accordingly. Organizing efforts could easily jump to an unprepared chain. That’s exactly what happened in the early Starbucks markets.
Podcast
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