COVID-19
Health and Safety – The Biden Administration’s emergency workplace rule requiring mandatory vaccinations or weekly testing continues to speed through the process. For context, on Sept. 9, President Biden announced that OSHA would issue an emergency temporary standard (ETS) requiring covered businesses to mandate that their workers be vaccinated against the coronavirus or undergo weekly testing. Covered employers will also have to give workers paid time off to get vaccinated or recover from any side effects of getting vaccinated. Employers that don’t comply with the vaccine mandate or paid-time-off requirement may face fines of up to $14,000 / violation. The rule covers employers with at least 100 employees and will impact more than 80 million workers. This week the Occupational Safety & Health Administration (OSHA) sent its preliminary vaccine mandate to the White House for final approval. The regulatory review process can sometimes take months but President Biden called for an expedited process for ETS. As such, the regulatory office could quickly conclude its review any day now which would prompt OSHA to publish the ETS. The ETS could take effect immediately upon publication but OSHA generally provides businesses with a little time before they must comply. Meanwhile, some states are actively opposing the pending OSHA mandate, creating conflicting standards for employers. Florida Governor Ron DeSantis said Florida will challenge in federal court and through legislation any vaccine mandates placed on employers or others by the President. DeSantis’ comments follow those of Texas Republican Gov. Greg Abbott, who earlier this week banned vaccine requirements in his state. More details.
Wages
Flagstaff, AZ – A judge blocked the state of Arizona from collecting $1.1 million from the city of Flagstaff. At issue, the Republican-controlled legislature in 2019 enacted a law designed to dissuade municipalities from enacting wage rates higher than the state standard. It requires municipalities to compensate the state for increased costs (due to the local wage rate) when the local rate is higher than the state’s. The judge ruled that the state missed a deadline for the assessment and was stretching a law targeting higher voter-approved city wages to collect its indirect costs (like contractor costs). However, the ruling sidestepped the question of whether the assessments are unconstitutional. The state, in fact, is specifically exempt from paying the higher minimum wage the city’s voters approved in 2016. More details.
Nobel Prize – This week the Nobel Prize for Economics was awarded to researchers who studied the impact of a minimum wage increase on QSR employment levels, finding no correlation between the two. The 1993 study is perhaps the most cited body of evidence by minimum wage advocates. The decision by the Nobel Committee to recognize this study only further enhances its credibility.
USAA – The company is increasing wages by a little over 30 percent for its lowest-paid employees, as the nation’s 29th-biggest bank joins Bank of America (the second-largest) in paying an hourly rate of at least $21/hr. The wage hike took effect last Sunday and translates into an annual salary of $43,680, in addition to retirement and other benefits. Prior to this week, USAA had been paying an hourly minimum of $16/hr. More details.
Paid Leave
Labor Department – The Bureau of Labor Statistics (BLS) released an exhaustive report of paid leave availability during the pandemic. Among other findings, access to paid sick leave availability hit a high of 79 percent of civilian workers in the spring of 2021. More details.
Labor Policy
DHS – The Biden Administration decision to pivot away from mass worksite immigration raids drew headlines this week but many other elements of the “Strategy to Protect the American Labor Market, the Conditions of the American Worksite, and the Dignity of the Individual” drew less attention but could be more impactful to employers. In short, the memo instructs DHS to focus on “exploitative employers” by “increasing the willingness of workers to report violations of law.” It also calls for greater coordination between DHS and the Labor Department in enforcing workplace standards. Some view the bureaucratic reorganization as part of a larger effort being spearheaded by the Vice President and Labor Secretary to dramatically retilt the federal government toward assisting unions and labor advocate groups. More details.
California – The governor signed legislation making the state the first in the country to let some adult children add their parents as dependents on their insurance plans. Advocates hope the move will cover a small population of people living in the country illegally who don’t qualify for other assistance programs. To be eligible, adults must rely on their child for at least 50 percent of their total support. The law applies only to people who buy their health insurance on the individual market. Those who get insurance through their jobs, which includes most people in the state, aren’t eligible. More details.
Activism
Striketober – Tens of thousands of U.S. workers are threatening to strike in what has been deemed “Striketober”. Many individual union pressure campaigns – healthcare workers, TV and film crews, and farm equipment manufacturing workers, to name a few – have merged their activism under the banner. While union organizers and activists organizing in the restaurant and retail space have not folded into the effort, it may be a matter of time. More details.
Starbucks – The company temporarily closed two stores at the center of a union organizing effort in Buffalo, New York. The company said that the two temporary store closures in Buffalo have nothing to do with the union drive – one is for a remodel and the other is for training new hires. One of the stores in Buffalo has been closed for weeks and will remain closed indefinitely. It is being used as a site to train new hires, under a program Starbucks relaunched in May in response to labor shortages. Starbucks has closed stores in California and Indiana for training purposes as well. More details.
Alcohol
California – The governor signed a series of bills to extend outdoor dining and alcohol sale permits for a year after the pandemic emergency ends, to give establishments an opportunity to permanently expand outdoors. Additionally, he also signed legislation allowing restaurants, along with bars, breweries, and wineries that sell food to offer to-go cocktails with food orders through the end of 2026. More details.
Misc.
FDA – The Food and Drug Administration (FDA) released voluntary sodium reduction guidelines for 163 categories of processed food, including baby food, snacks, and foodservice items. These guidelines which have been pending since 2016 are nonbinding recommendations for manufacturers and foodservice to follow for the next two and a half years in order to cut down on the average consumer’s sodium intake. The FDA couldn’t move forward with more stringent or mandatory salt-reduction guidelines until the proposed voluntary ones were codified. While these guidelines are voluntary for the next two and a half years, it isn’t the end of federal attention to salt reduction. Longer-term or mandatory guidelines could be proposed for when these expire. More details.
Key Takeaways
- “Striketober” hasn’t hit the restaurant and retail industries but we’re only halfway through the month. Increased worker activism has become a regular storyline in the national media. As a result, workers and labor advocates are feeling more emboldened and taking action, creating a feedback loop of even more headlines. Stores that have experienced unrest in recent years should be prepared for turbulent times through the holidays, as labor organizers look to press their advantage.
- The award of the Nobel Prize to David Card, whose research on minimum wage demonstrated that raising the minimum wage doesn’t necessarily lead to lower employment, provides further credibility to Card’s findings. His study contradicted many economists’ views at the time, as well as many industry arguments against wage increases. Since his 1993 study, the examination of wage increases has become much more nuanced, focusing on potential impacts such as reduced hours, benefits, or firm growth. Industries hoping to engage in productive policy conversations (and stay ahead of political arguments) should be aware that the “job killer” rhetoric holds much less potency than it once did.