Wages
Harris Campaign – The Democratic nominee for president unveiled a 5-point economic policy platform, including an end to the “subminimum wages for tipped workers and people with disabilities.” The Harris campaign is also calling for raising the federal minimum wage, as well as eliminating taxes on tips. One Fair Wage, the leading advocate for eliminating the tip credit, “applauds the Harris-Walz campaign for elevating the fight to end the subminimum wage for tipped workers, addressing the real economic crisis for millions of workers in the service industry.” More details.
Arizona – The state labor department announced the new state minimum wage will be $14.70/hr that Jan. 1, a 35 cent/hr increase. The tip credit remains at $3/hr meaning the server wage will increase to $11.70/hr. More details.
Maine – The state labor department announced the new state minimum wage will be $14.65/hr as Jan.1, a 50 cent/hr increase. Maine law requires annual adjustments to the minimum wage based on the cost-of-living index for the Northeast Region. According to the Bureau of Labor Statistics, there was a 3.6 percent increase in the cost-of-living index between Aug. 2023 and Aug. 2024. The server wage will be increasing to $7.33/hr from its current $7.08/hr. More details.
Michigan – Compromise legislation has been introduced to gradually increase Michigan’s minimum wage to $15/hr by 2029, freeze the tipped wage at 38 percent of the state’s minimum wage, and guarantee paid sick time for workers. Under the wage proposal, the tipped minimum wage would remain at 38 percent of the state’s minimum wage, rather than being phased out. The legislature has a small window later this month in which to pass the bill but proponents are optimistic that it will get done. Additionally, Michigan Attorney General Dana Nessel has since filed a motion with the supreme court on behalf of the Department of Treasury and the Department of Labor and Economic Opportunity requesting “additional guidance and clarification” on how to implement the decision. For context, the legislature is responding to the recent state supreme court decision which determined that the “adopt-and-amend” strategy the legislature used in 2018 to rework two ballot initiatives had subverted the rights of Michigan citizens. More details.
Oklahoma – As expected, the pending ballot proposal to increase the minimum wage to $15/hr will not appear on the 2024 ballot. Instead, it will appear on the June 2026 ballot. Supporters of the Yes on State Question 832 campaign turned in nearly 180,000 signatures in less than 90 days back in July, nearly twice as many as the roughly 92,000 signatures of registered votes needed to qualify the question for the ballot. Oklahoma has a lengthy process for ballot certification involving the secretary of state’s office, the state election board, and ultimately the governor’s approval of an election date. Opponents of the measure were able to successfully leverage that process to “run out the clock,” and ensure the deadline for this year’s ballot was missed. More details.
Aldi – The company announced that it will increase its starting wages ensuring that median starting hourly rates would be $18/hr for store workers and $23/hr for warehouse workers. It also announced that it will be hiring 13,000 new store and warehouse employees as the company continues to add more stores across the U.S. The discount grocery store chain already employs more than 49,000 workers and looks to pass the 60,000 worker mark with the new hiring spree. Apart from these wage increases, Aldi is also offering workers various health care benefits. Employees who work more than 30 hours a week have access to healthcare insurance, paid time off as well as other perks. More details.
Amazon – Amid growing union pressure, the company is giving a pay boost to its subcontracted delivery drivers. Those drivers who work with Amazon’s Delivery Service Partners, or DSPs, will earn an average of nearly $22/hr, a 7 percent bump from the previous average of $20.50/hr. The increase to the $20.50/hr level occurred just last year. More details.
Bank of America – The company announced it will raise its minimum starting pay to at least $24/hr starting in Oct. The company says that this pay raise, up from the current $23/hr, will affect “thousands” of its 212,000 employees. The wage increase will particularly affect tellers and other customer-facing employees, such as call-center workers. Bank of America has been raising wages relatively aggressively for its hourly workers since early 2019, when it paid $15/hr. The bank had previously said that it plans to pay all such employees $25/hr by next year. And even today, the company is already paying significantly above the median wage for all U.S. bank tellers, who earned $18.10/hr in 2023, according to the Bureau of Labor Statistics. More details.
Paid Leave
Michigan – As noted above, compromise legislation to amend the pending paid sick leave law passed by the voters in 2018 has been introduced. The law, recently reinstated by the state supreme court, will require businesses with fewer than 10 employees to allow workers to accrue up to 40 hours of paid sick leave annually accrued at the rate of one hour of leave for every 30 hours of work. It will require larger businesses to let their workers accrue up to 72 hours of annual leave. Under the current law, employers with fewer than 50 workers were exempt from having to offer paid sick time. The new language would leave those parameters largely intact but tweak language around how increments of hours are used and employee notification processes.
Labor Policy
Labor Department – In a major win for the agency, a federal appeals court ruled that it has the power to set a salary basis floor in order for workers to be considered exempt from overtime pay. The ruling from the 5th Circuit Court of Appeals was a small but meaningful victory given the U.S. Supreme Court recently curtailed federal agencies’ authority and told federal judges they should exercise their own independent authority in this space. But a three-judge panel from the conservative appeals court agreed with the agency, upholding the salary basis floor just months before a new rule takes effect on Jan. 1 to raise the minimum salary level to about $59,000 per year. The case stems from the overtime rule passed in 2019 by the Trump Administration. There is still litigation pending from the Biden overtime rule, mostly focusing on the agency’s authority to establish escalators automatically increasing the threshold every three years. More details.
Labor Activism
One Fair Wage – At a ballot forum in Sacramento this week, One Fair Wage (OFW) head Saru Jayaraman squared off on a panel with the CEO of the California Restaurant Association Jot Condie to debate the merits of the pending ballot initiative to raise the state minimum wage to $18/hr. The state has no tip credit. The CRA was a late substitute for the California Chamber of Commerce and while the increase would affect all California businesses, the panel clearly had a restaurant industry focus. More details.
Key Takeaway
- This week, the California Fast Food Council met for a third time with little or no meaningful business being conducted. The internal process of recruiting and hiring staff as well as significant agenda time given to scripted public comment has neutered any real policy proposals and outcomes. Those will come eventually, but in the meantime, it’s providing operators breathing space to organize and partner with industry associations on the ground pushing back. Brands should be seizing on that opportunity.
Podcast
Check out our Working Lunch podcast each week that includes further analysis into these legislative issues, policy, politics and much more. You can find Working Lunch on the Restaurant Business online website, SoundCloud, iTunes and Spotify.