Wages
U.S. Senate – Legislation was introduced by Republicans to raise the federal minimum wage to $11/hr by 2027 and then index it to inflation every two years moving forward. There would be a slower phase-in for businesses with fewer than 20 employees. The bill would also mandate E-Verify for all employers, phasing in implementation over 18 months to allow small businesses additional time to comply and raises civil and criminal penalties on employers that hire unauthorized aliens and/or violate I-9 paperwork requirements. Chances for final passage are unlikely. More details.
California – An emerging agreement between the Service Employees International Union (SEIU) State Council and the healthcare industry would secure a $25/hr pay rate for healthcare workers and impose a truce on recurring ballot fights over dialysis clinics. The industry agreed to the wage hike in exchange for a moratorium on bills and ballot initiatives targeting those facilities. Community clinics would potentially be covered in a separate bill. The compromise would cap a multiyear battle over industry wages. SEIU ramped up the pressure in recent years by pushing a series of local $25/hr wage ordinances around the state – including in Los Angeles – and sought to cut a deal with hospitals last year in exchange for relief from significant retrofit requirements. More details.
Chicago, IL – The city council referred tip credit elimination legislation to the Workforce Development Committee. The legislation, as currently drafted, will phase out the tip credit over a two-year period and bring server wages in line with the city’s current minimum wage of $15.80/hr. The legislation was previously advanced by the Rules Committee. The proposal is a priority for the mayor who promised to address the issue within the first 100 days of his new administration. He and other city council members recently appeared at a One Fair Wage rally led by key industry antagonist Saru Jayaraman. More details.
Amazon – The company announced it plans to invest an additional $440 million in their existing delivery service partner program that may increase average delivery driver pay to $20.50/hr. The investment in drivers comes at the same time as other logistics companies are upping wages through contract negotiations, and drivers (including at Amazon) are looking to unionize. More details.
Paid Leave
California – The senate passed 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 signed a memorandum of understanding (MOU) with the EEOC to address the need for information sharing, joint investigations, training, and outreach between the Wage and Hour Division (WHD) and the EEOC. Nothing in the MOU limits the agencies’ enforcement of their respective statutes. This MOU is a voluntary agreement that expresses the good-faith intentions of WHD and the EEOC, is not intended to be legally binding, does not create any contractual obligations, and is not enforceable by any party, private person, or other third party. Recent enactment of the Pregnant Workers Fairness Act prompted the agreement. More details.
California – Industry groups, SEIU, and political leadership struck a compromise on a number of issues related to the FAST Act. The legislature has approved much of the agreement which now heads to the governor for his signature. Per the agreement, the FAST Act (AB-257) will be repealed. When that is accomplished, the industry has agreed to withdraw the AB-257 referendum (which is now possible due to a new statute recently passed by the legislature). Additionally, all joint employer liability provisions in the pending AB-1228 were withdrawn and replaced with compromise language that, in effect, creates a watered-down version of the FAST Act’s Fast Food Council. Importantly, the new language reduces the authority of the council, prevents local councils, and narrows the scope of the council. Finally, the legislation will provide for a minimum wage increase to $20/hr with annual adjustments allowed based on CPI (capped at no more than 3.5 percent (as opposed to a $22/hr minimum wage proposed under the original FAST Act). More details.
EEOC – The agency announced an updated filing deadline for US employers to submit their demographic data. The EEO-1 Component 1 data collection for 2022 begins October 31 and the deadline to file is December 5. All private employers that have at least 100 employees are required to file the EEO-1 form annually, detailing the racial, ethnic and gender composition of their workforce by specific job categories. Likewise, federal government contractors and first-tier subcontractors with 50 or more employees and at least $50,000 in contracts must file EEO-1 reports. The form does not currently include pay data, though some states (like California) have added that requirement. More details.
Labor Activism
California – Legislation is on its way to the governor requiring employers to cover the cost of food safety training mandated by the state’s public health laws. If signed into law, the legislation would overturn a common practice in which employees cover the expense of obtaining the certification themselves. The measure, SB-476, which cleared the state senate by a wide margin in May, passed the assembly 56 to 18. After a senate vote on concurrence with amendments, the bill was sent to the governor who has not signaled whether he will sign it or veto it. The bill’s sponsors cited a New York Times investigation published in Jan. that alleged the National Restaurant Association raises millions of dollars from workers through the fees charged by a food safety training program it administers, ServSafe. More details.
Good Karma – Employees at the two remaining locations of the Philadelphia coffee shop voted to get rid of Workers United Philadelphia Joint Board as their union. The vote, which was overseen by the National Labor Relations Board (NLRB), took place on Sept. 7, less than a year and a half after the employees voted to unionize. The union and Good Karma management had not yet agreed to a first contract. The employee who started the decertification petition, Marco Camponeschi, is represented by the National Right to Work Foundation (NRWF). The same organization is working to decertify Workers United at several Starbucks locations, an effort that faces legal obstacles because of allegations of anti-union activity by Starbucks. More details.
Misc.
California – Legislation is on its way to the governor that would ban several food additives found in popular snacks, including Skittles. The California Food Safety Act – the first of its kind in the country – would ban the manufacture, sale, or distribution of brominated vegetable oil, potassium bromate, propylparaben, and red dye no. 3. If signed, the law would take effect on Jan. 1, 2027, and impose fines of up to $10,000 for violations. The sponsor argues that many of the chemicals included in the bill have already been banned in other countries, with manufacturers using alternative substances. The “Skittles Ban” has been the subject of vigorous public backlash but proponents argue that manufacturers can easily change their recipes to comply. More details,
Key Takeaway
- The industry notched an important victory in California this week. A vocal minority have been critical of the agreement. Their criticism does not properly account for the political reality in the state. In short, the industry was able to put the SEIU on the defensive by pursuing a referendum (which is quite a feat), and as a result, earn considerable concessions. Without that forceful industry response, the FAST Act would be in effect today: local fast food councils across the state would be promulgating all kinds of workplace mandates, the statewide minimum wage would be increasing to $22/hr in Jan., and the joint-employer issue would still be under consideration. The compromised outcome provides a much better business environment for operators. Finally, and perhaps most importantly, the industry sent a signal to the labor community that there will be a steep cost on this issue in other jurisdictions. Ultimately, that will be the best prevention against some version of the FAST Act emerging in other states.
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.