Wages
Washington – The state labor department announced that the state’s minimum wage will increase 54 cents to $16.28/hr on Jan. 1. The 3.37 percent increase is a cost-of-living adjustment based on the federal CPI. At least three Washington cities already pay more per hour. Seattle’s minimum wage is $18.69/hr for most workers, and the Seattle suburb of Tukwila is at $18.99/hr. In SeaTac (where the Seattle-Tacoma International airport is located) the minimum wage is $19.06. More details.
Montgomery County, MD – A hearing scheduled for Oct. 10 on legislation to eliminate the tip credit in the county was delayed by a week until Oct. 17. 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 was introduced to incrementally eliminate the server wage by 2027. The bill was developed in coordination with One Fair Wage who recently gave a “briefing” to county council members. No date for further action has been set. More details.
Chicago, IL – The city council advanced a proposal to phase out the minimum wage for tipped workers (currently $9.48/hr) over five years. Under the plan, businesses would be required to increase tipped workers’ wages by 8 percent annually until they’re paid the same minimum wage as other employees in the city ($15.80/hr). Workers could still accept additional tips. The proposed ordinance was revised in a deal hammered out between Mayor Brandon Johnson, aldermen and the Illinois Restaurant Association (IRA). More details.
Evanston, IL – A city council committee approved legislation to increase the local minimum wage to $16.25/hr. The full council will vote on the measure next week. Of note, the original bill language called for the elimination of the tip credit but that provision was removed. For context, Cook County, in which Evanston is located, just increased their county minimum wage to $13.70/hr with the tip wage at $8.00/hr earlier this summer. More details.
Paid Leave
California – The governor signed legislation expanding the state’s paid leave requirement, increasing the number of paid sick days that workers in the state are guaranteed each year from three to five. The original legislation called for seven days of leave but was pared back due to stiff opposition from the business community. More details.
Labor Policy
Labor Department – The agency submitted its long-awaited new rule regarding which workers can be classified as independent contractors to the Office of Information & Regulatory Affairs (OIRA), the final step before regulations are publicly released. The final regulations should be published in the coming weeks. More details.
NLRB – The National Labor Relations Board (NLRB) Inspector General released a report finding the head of the St. Louis regional office “grossly mismanaged” a union election at a Starbucks store in Kansas. Regional Director Andrea Wilkes’ failure to properly supervise and manage the mail ballot election and to take reasonable steps to address issues as they arose “created the risk of great reputational harm” that could hurt the NLRB’s ability to conduct neutral elections. The report comes in the wake of Starbucks and other critics of the NLRB asserting that the agency is working collaboratively with unions at the expense of employers. The election is at the center of a congressional inquiry into the agency’s overall objectivity. An NLRB official last month threw out Starbucks Workers United’s victory at the store and ordered a rerun election because agency staffers in the St. Louis office failed to keep Starbucks apprised of special voting arrangements for workers who didn’t receive mail ballots. More details.
California – The governor signed legislation creating the first general industry workplace violence prevention safety requirements in the country. Covered employers must develop and create a workplace violence prevention plan as part of their Injury and Illness Prevention Plans. Among other things, employers would have to assess their workplaces and identify potential safety risks, create incident response plans and maintain all related records for at least five years. The new law also makes three substantive changes to California’s law allowing employers to seek restraining orders on behalf of employees. The new law covers almost all California employers. More details.
California – The governor vetoed legislation that would have made workers eligible for unemployment payments after two weeks on strike. He felt the bill would have added strain to California’s already overburdened unemployment system. California’s unemployment fund is about $19 billion in debt after borrowing heavily from the federal government in 2020 to pay people who were out of work due to COVID-19 pandemic lockdowns. The action upset many in the labor community who were already upset about a previous veto of legislation to ban driverless trucks, a top priority for the Teamsters union which feels the technology threatens jobs. More details.
Chipotle – The Equal Employment Opportunity Commission (EEOC) filed a lawsuit against the company claiming the restaurant chain violated federal law when a manager at a Kansas location harassed a teen worker for wearing a hijab. The EEOC alleges the company retaliated against the employee when she complained about the harassment by refusing to schedule her to work additional shifts unless she agreed to transfer locations, while the manager continued working at the same location. The lawsuit claims the worker was forced to submit her two weeks’ notice and calls the conduct “egregious, humiliating, and intimidating,” in addition to violating federal civil-rights law. The EEOC seeks monetary relief for the victim, as well as an order prohibiting future religious discrimination, and other relief. This is the latest in a long line of EEOC lawsuits the company has faced and agreed to numerous large settlements with the agency. More details.
Subway – The U.S. District Court for the Northern District of California has ordered the owners and operators of 14 Bay Area Subway restaurants, including six in Sonoma County and three in Napa, to pay employees nearly $1 million in back wages and damages. In a rare action, the consent order – meaning all parties agree to its directives – also requires the owners to sell or shut down their businesses by Nov. 27. Federal investigators found that the owners had directed children as young as 14 and 15 to use dangerous equipment and assigned minors to work hours not permitted by law, failed to pay employees their wages regularly, including by issuing them hundreds of bad checks, and illegally kept tips left by customers. More details.
Labor Activism
Hex & Co. – Workers at a Manhattan location of the board game cafe have petitioned the restaurant’s owners to recognize their union, Hex Workers United. As a result of the recent Cemex decision by the NLRB, management must either agree to recognize the union or petition the NLRB to conduct a unionization election. (Previously, it was the workers that had the burden of petitioning for the election.) The management team has decided to not recognize the union and ask for an election. Worker’s United, the same group organizing Starbucks locations across the country, says the Hex & Co bargaining unit will include about 75 employees, including baristas, retail workers, bartenders, after-school program workers, and workers who run some of the games, also known as “dungeon masters.” Workers are asking for $22.50/hr, a clearer path to promotion, and increased staffing. More details.
Starbucks – An NLRB judge ruled that Starbucks violated labor law by denying pay and benefit increases last year to unionized stores while it extended the increases to ones that had not organized. Former CEO Howard Schultz announced last Aug. that Starbucks would be raising its minimum wage to $15/hr, implement credit card tip prompts, and allow for faster sick time accrual for only those restaurants that had not unionized. The company claimed that federal law required them to negotiate those policies with the union instead of extending them unilaterally, an argument the judge rejected. The company said they would appeal the decision. More details.
Starbucks – The company appealed to the U.S. Supreme Court to review a case that resulted in an order from an appeals court to rehire employees who were dismissed from a store in Memphis, Tennessee. The discharged employees were dubbed the Tennessee Seven, and were leveraged as a rallying point in the Starbucks Workers United’s effort to organize other units. The company is asking for a writ of certiorari seeking a ruling on what criteria should be used by federal courts when the National Labor Relations Board asks for an immediate injunction against an employer contending with a unionization effort. It is unclear if the court will act. More details.
Waffle House – Workers at several restaurants in the Atlanta-area held rallies demanding better pay and increased worker safety protections. Workers are asking for $25/hr. The rallies are part of a broader effort by the Union of Southern Service Workers targeting the chain. More details.
Key Takeaways
- The application of the NLRB’s new Cemex precedent at Hex and Co. will provide further clarity as to how the new standard will work at restaurant and retail locations. The impact of this new precedent can not be overstated. It will dramatically change the way in which labor organizing efforts are conducted and significantly tilt the playing field in favor of union organizers. Brand’s labor relations teams need to brief field teams on the recent developments in this space, and the Hex and Co. campaign should bring into focus how the standard will be applied in a cafe setting.
- The Starbucks campaign continues to impact the overall organizing environment. The inappropriate and unlawful conduct by the NLRB St. Louis Regional Office provides credence to the company, and Congressional Republicans’ claims that the NLRB is not a neutral actor. And, the incident will fuel Congressional action against the Board, as well as Starbucks animus in other matters.
- This week, California Gov. Gavin Newsom signed legislation mandating that the last week in April be known as “Workplace Readiness Week” and requiring all public high schools, including charter schools, to annually observe that week by providing information to pupils on their rights as workers, and specifying topics to be covered. Those topics include, among others, child labor, wage and hour protections, paid sick leave, the right to organize, prohibitions on employers regarding retaliation and, most shockingly, the “labor movement’s role in winning those protections and benefits.”
Podcast
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