Wages
FTC – The Federal Trade Commission (FTC) released a revised proposed rule that would ban what it calls hidden and bogus fees. Agency officials claim that these fees can cost consumers an extra $80 billion every year. The initial proposal was targeted at hotels, airlines, ticket brokers and other industries that routinely add service, process and handling, and resort fees. During the public comment period, the agency also received numerous complaints regarding service charges in restaurants as well as various charges regarding third-party food delivery. As a result, the agency decided to revise the original rule and include new language eliminating service or other mandatory fees from restaurant receipts, making several recommendations concerning tipping for servers and credit card transaction charges, and requiring “all-in” pricing during third-party delivery menu selections. The public will have 60 days to comment on the FTC’s proposal. The regulatory agency will then use that input in drafting a final set of regulations. More details.
Ohio – The state commerce department announced that the minimum wage will increase on Jan. 1 to $10.45/hr and to $5.25/hr for tipped employees. The minimum wage applies to employees of businesses with annual gross receipts of more than $385,000/yr. In 2006, voters passed a constitutional amendment tying the minimum wage to the CPI. More details.
Vermont – The state labor department announced that the minimum wage will increase Jan. 1 to $13.67/hr, a 49 cent bump from the current rate of $13.18/hr. Tipped employees will also get a pay raise from $6.28/hr to $6.84/hr. The minimum wage and tipped minimum wage are adjusted annually in accordance with legislation enacted in 2020. More details.
Montgomery County, MD – Next week, the county council will hold a hearing on legislation to eliminate the tip credit in the county. The bill, if passed, would eliminate the tip credit by raising the server wage annually until it is in line with the current $15/hr county minimum wage by July 1, 2028. The bill would also ensure that the change does not inadvertently increase a restaurant’s rent (which could happen in leases where rent payments are tied to a percentage of sales). A companion bill was also introduced which would require owners to be transparent about service charges, explaining to patrons how owners are spending dollars from those fees. More details.
Prince George’s County, MD – Legislation to incrementally eliminate the server wage by 2027 was tabled indefinitely at a full council meeting this week. The bill was developed in coordination with One Fair Wage who recently gave a “briefing” to county council members. Outside of the council chambers both One Fair Wage and the Restaurant Association of Maryland, joined by servers who wanted to protect their tips, held dueling rallies putting significant pressure on the council. After seeing how many restaurant workers opposed the measure, the counsel opted to table the measure. More details.
Anaheim, CA – Voters overwhelmingly rejected a ballot measure that would have set a $25/hr minimum wage for hotel and event center workers in the city. The vote came after a long legal tussle over the summer between UNITE HERE and the hospitality industry. In Aug., an Orange County judge rejected a lawsuit by the local UNITE HERE chapter challenging the city’s decision to hold a special election on a minimum wage for hotel workers Oct. 3. The city delayed the original Sept. 12 date for administrative reasons frustrating the union’s efforts for a quick election. In addition to the $25/hr rate, the defeated proposal would also have automatically adjusted based on inflation going forward. The vote was in deference to an initiative supported by the same union that received enough signatures to qualify for the ballot. In addition to the wage piece, it would have also limited the square footage hotel maids can clean to 4,000 square feet per day in 8 hours. If they were required to work more, they would be paid twice their hourly rate for their entire shift. It would also have required all rooms to be cleaned each night that they are occupied. Next steps for the union are unclear. More details.
Culver City, CA – The city council voted to hire Berkeley Economic Advising Research to conduct a study on the economic impact of a potential minimum wage ordinance in Culver City. The idea of creating a minimum wage for the city initially came before the council in 2022 and resulted in the creation of a subcommittee to study the topic. The firm will be paid $145,000 to conduct the analysis. More details.
Labor Policy
EEOC – The U.S. Equal Employment Opportunity Commission (EEOC) published long-anticipated proposed guidance related to workplace harassment. If adopted by the EEOC, the enforcement guidance would supersede four existing EEOC guidance documents issued during the 1990s, as well as a section of the EEOC Compliance Manual on harassment. Among other things, the guidelines state that, “sex-based harassment includes harassment on the basis of sexual orientation and gender identity, including how that identity is expressed.” It goes on to detail that misgendering (continuing to deliberately use the incorrect pronoun for an individual), harassment for not presenting according to traditional gender stereotypes, and not allowing the use of a bathroom or “other sex-segregated facility” that aligns with a person’s gender identity, will be recognized as forms of harassment. Members of the public have 30 days from the date of publication to submit comments related to the proposed guidance. More details.
California – The governor vetoed legislation, anticipated to take effect in 2025, that would have done away with criminal penalties for people possessing natural psychedelics for personal use. It also would have required the state to form a group to study and make recommendations about the drugs’ therapeutic use. Governor Newsom, a Democrat who championed legalizing cannabis in 2016, said in a statement that more needed to be done before the state decriminalized the hallucinogens. The legislation, which echoed similar measures in Oregon and Colorado, came after years of effort from drug reform advocates and state lawmakers. It is unlikely there are the votes necessary to override the legislation but highly likely the bill returns next year. More details.
Labor Activism
California – The governor signed legislation requiring the state health department to make a list of all certified food handler training programs along with the cost of each program available on its website by Jan. 1, 2025. Local public health departments would be required to provide a link of this page on their website, or include the same list on their website. In addition, the bill would require an employer to pay the employee for any cost associated with the employee obtaining a food handler card. That includes but is not limited to the time it takes for the employee to complete the training, the cost of the food handler certification program, and the time it takes to complete the certification program. The bill further requires an employer to relieve an employee of all other work duties while the employee is taking the training course and examination. And, an employer would be prohibited from conditioning employment on an applicant or employee having an existing food handler card. The bill was originally filed in response to the New York Times piece regarding the National Restaurant Association and its ServSafe program. More details.
Restaurant Opportunities Center – Acting Secretary of Labor Julie Su joined the Restaurant Opportunities Centers United (ROC) in New York City this week for a roundtable highlighting issues faced by restaurant workers. The roundtable centered on the ways the organization employs grants from the Labor Department, including the Occupational Safety and Health Administration’s Susan Harwood Training Grant and the Women’s Bureau’s Fostering Access, Rights and Equity Grant to support workers in this industry. More details.
Walgreens – Thousands of Walgreens pharmacy staff across the country walked off the job this week, alleging that poor working conditions are putting employees and patients at risk. Pharmacists, technicians, and support staff claim that increased demands on understaffed teams – such as administering vaccines while battling hundreds of backlogged prescriptions – have become untenable and are impeding their ability to do their jobs responsibly. Employees are requesting that the company hire more pharmacy staff, establish mandatory training hours, offer transparency in how payroll hours are assigned to stores, and give advance notice when staff will be cut or when a position opens. More details.
Sustainability
California – The governor vetoed legislation related to last year’s landmark Extended Producer Responsibility (EPR) law, SB 54. The bill would have established a working group to evaluate “novel” materials that could be used as alternatives to plastic in single-use products. It was meant to help the state implement some provisions laid out in last year’s SB 54, including a requirement that producers reduce the amount of single-use plastic they use by 25 percent by 2032. The working group would have been tasked with delivering recommendations by July 2026 and would include members of state departments like CalRecycle. In his veto message, the governor said the working group was “unnecessary and duplicative of existing efforts.” CalRecycle is already in the process of gathering information needed to carry out the many provisions of SB 54, he said, including conducting needs assessments and industry surveys. More details.
Key Takeaways
- The appearance this week by Acting Labor Secretary Julie Su at a Restaurant Opportunities Center event in New York City is disturbing on many levels. The Biden Administration has made no bones about their embrace of the labor community; however, an appearance by a cabinet-level official at an event designed to disparage the business model of a large industry and its reputation is different from simply supporting the labor community. It would have been very unlikely that former Secretary Marty Walsh would have participated in such an event and further validates the vigorous pushback by the business community regarding her nomination. The restaurant industry should strongly respond and condemn the Administration’s efforts to validate them as an authoritative voice on the industry.
- The victory in heavily blue, progressive Prince George’s County, Maryland this week is important on many fronts. In the near-term, it means that the industry business model is protected, at least for now, in that jurisdiction as well as sending a signal to their peers in neighboring Montgomery County. More broadly, it demonstrates for other industry leaders across the country that there is a playbook for successfully defending the industry against these proposals and a large part of that strategy is direct server and bartender engagement. When and where we do that well, we win. When we don’t, we lose.