Wages
Labor Department – A federal judge in Texas vacated the Labor Department’s final overtime rule, likely dealing a final blow to the rule as the Trump Administration is set to take office. In a sweeping 62-page decision, U.S. District Judge Sean D. Jordan of the Eastern District of Texas declared that the Labor Department exceeded its rulemaking authority by attempting to raise the minimum salary for the executive, administrative, or professional (EAP) and highly compensated employee (HCE) exemptions under the FLSA. The rule took effect on July 1, 2024 and initially increased the minimum salary thresholds for the EAP exemptions from $684/wk ($35,568 annually) to $844/wk ($43,888 annually) and also increased the minimum salary threshold for the HCE exemption from $107,432 to $132,964 annually. Critically, these increases were only the beginning—the rule would have raised salaries again on January 1, 2025 and provided for further increases beginning July 1, 2027 and every three (3) years thereafter. The agency posited that its new rule would have made approximately four million employees newly eligible for the FLSA’s overtime protections. The judge’s broad decision vacates the entire rule, including the salary increases that previously took effect on July 1, 2024. Employers who previously raised the salaries of exempt employees to meet the July 1, 2024 increase must now grapple with whether to keep employees at those salary levels. As part of that inquiry, employers should keep in mind the existence of state-specific salary thresholds in some jurisdictions that already exceed the FLSA threshold. More details.
California – The final results of Proposition 32, the ballot measure to raise the state minimum wage to $18/hr, were tallied this week and the election was officially called. The measure failed in a close race with 50.8 percent of the electorate opposing it. The final result is a stunning defeat for the labor community. More details.
Prince George’s County, MD – The county council passed a bill that would annually adjust the county’s minimum wage based Consumer Price Index (CPI). If signed by the county executive (who has not expressed opposition), the bill would take effect on July 1 and adjust minimum wage annually. The county last increased its minimum wage in 2017. The proposal does not impact the cash wage for tipped employees. More details.
Los Angeles, CA – The city council postponed a vote on a proposed minimum wage increase for hotel and airport workers, voicing concerns that the pay hike could damage the city’s tourism industry. The council’s decision to put off the vote until Dec. 11 came as hotel owners were threatening to pull out of a deal to provide tens of thousands of rooms during the 2028 Olympic Games if the pay increase is approved, saying it would decimate their bottom line. The council had been scheduled to vote this week on whether to finalize changes to an existing city ordinance that would raise the minimum hourly wage for workers at large hotels and Los Angeles International Airport from the current $20.32/hr to $25/hr on Feb. 1. The minimum pay would then climb incrementally each year to reach $30/hr by July 1, 2028, as the Olympics are set to open. More details.
Labor Policy
Minneapolis, MN – The mayor vetoed a city council-passed ordinance to create a new local labor standards board of workers and employers to recommend industry regulations for pay, safety, and equity. The current proposal mandates that the board would have 15 members: five employer representatives, five employee representatives, and five “community stakeholder” group representatives. The council would appoint 12 members and the mayor would pick three. In his veto message, the mayor said that the allotted participation of the business community was “negligible” and said he would support a version of the proposal that features an equal split on the board between employees and employers, as well as an equal split between mayoral and council appointments. The original council vote was 9-3, sufficient to override the veto but it remains uncertain how a potential override vote would unfold. The council’s next meeting is Dec. 5. More details.
Swipe Fees
U.S. Senate – The Judiciary Committee held a bipartisan hearing addressing concerns over the alleged duopoly of Visa and Mastercard. Lawmakers addressed concerns that Visa and Mastercard’s dominance prevents small businesses from negotiating credit card interchange fees. Visa and Mastercard executives defended the fees, citing the costs of maintaining payment security and infrastructure. Democratic Senator Dick Durbin and Republican Senator Roger Marshall introduced the Credit Card Competition Act, requiring large banks to offer an alternative payment network to Visa and Mastercard. No votes were taken however the hearing was seen as a “win” for the retail community as the credit card executives were badgered by even bank-friendly senators on the committee. More details.
Key Takeaway
- Despite the election results earlier in the month, unions representing hospitality sector workers – namely Unite Here and the SEIU – are demonstrating that their unionization efforts will continue undaunted. This week, hundreds of hotel workers in San Francisco marched noisily through the streets of downtown San Francisco toward the luxurious Palace Hotel to press their demands for better pay and working conditions. On Friday, 500 Marriott hotel workers voted by 90% to authorize further strikes in the city, which already has 2,000 union workers off the job for more than 60 days. With their administration allies soon out of office and a potentially hostile Labor Department and NLRB on the horizon, look for labor groups in this sector to pivot significant resources away from lobbying and toward grassroots organizing.
Podcast
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