Wages
Arizona – The state announced that as of Jan. 1, 2026, the minimum wage will increase from $14.70/hr to $15.15/hr due to an annual inflation adjustment. As a result of the mandated $3/hr tip credit, the server wage for tipped employees will increase to $12.15/hr. More details.
Maine – The state labor department announced that the minimum wage will increase to $15.10/hr beginning Jan. 1, 2026, up from the current rate of $14.65/hr. The adjustment is based on a 3.1 percent rise in the Consumer Price Index for the Northeast Region, as reported by the U.S. Bureau of Labor Statistics. The cash wage for tipped employees will increase to $7.55/hr and the monthly tip threshold to qualify as a service employee will also increase from $185 to $191. More details.
San Diego, CA – The city council unanimously passed a proposal to raise the minimum wage to $25/hr by 2030 for certain hospitality workers in the city including those at hotels with at least 150 rooms, convention centers, and amusement parks. There are 103 hotels that the measure would impact – around 27 percent of the city’s 385 hotels, motels, and bed-and-breakfast businesses. Notable government-owned entities were exempted out of the final bill including San Diego State University and the San Diego Zoo. Other jurisdictions in the state including Los Angeles and Long Beach have adopted similar ordinances with even higher wage levels. More details.
Flagstaff, AZ – The city announced that as of Jan. 1, 2026, the local minimum wage will increase to $18.35/hr for all workers as the final step in the elimination of the tip credit takes effect. In 2016, Flagstaff voters passed Proposition 414 which mandated a $15/hr minimum wage by 2021 and then tied annual increases thereafter to inflation. It also included elimination of the tip credit by 2026. More details.
Bank of America – The company has raised its minimum hourly wage to $25/hr across the United States fulfilling its 2021 pledge of annual $1/hr increases until it reached the $25/hr level. The company has increased its minimum hourly pay by nearly 67 percent since 2018. With the latest increase, the minimum annualized salary for full-time employees in the U.S. will exceed $50,000, the bank said. More details.
Disney – A state judge approved the company’s $233 million settlement with 51,478 Disneyland employees who said the entertainment company denied them a living wage. The judge determined that the class-action settlement was “fair, reasonable, adequate, and consistent with public policy.” The lawsuit began in Dec. 2019, after Disney claimed it was exempt from a minimum wage law approved a year earlier by voters in Anaheim, where Disneyland is located. Known as Measure L, that law required businesses receiving tax subsidies from the city to pay resort workers at least $15/hr in 2019 and increasing amounts in subsequent years. Another $17.5 million represents a civil penalty being paid to the California Labor and Workforce Development Agency, while $35 million will go to the employees’ lawyers. Remaining sums will cover other costs. More details.
Paid Leave
U.S. Congress – The FAMILY Act was reintroduced in both chambers by sponsors Rep. Rosa DeLauro (D-CT) and Sen. Kirsten Gillibrand (D-NY). This legislation would establish a national paid family and medical leave program, guaranteeing workers 12 weeks of paid leave to welcome a new child, care for a seriously ill loved one, attend to one’s own serious medical needs, address military family caregiving needs, and to respond to domestic, sexual, and other forms of violence. The bill is similar to previous paid leave legislation that has gained little momentum in recent years. In April, a bipartisan group of lawmakers introduced a bill aimed at expanding paid family leave, the result of more than two years of work by the House Paid Family Leave Working Group. The More Paid Leave for More Americans Act would establish a three-year pilot grant program within the Labor Department aimed at encouraging states to establish paid family leave programs using public-private partnerships. More details.
Labor Policy
New York – The governor signed legislation authorizing the New York State Public Employment Relations Board (PERB) to assert jurisdiction over disputes between employers and unions if the National Labor Relations Board (NLRB) is unable or unwilling to do so. The new law creates the potential for both the NLRB and PERB to assert jurisdiction over the same labor dispute, escalating costs for employers and unions alike. The NLRB filed suit this week against the state saying the law potentially conflicts with federal law and violates the U.S. Constitution’s Supremacy Clause. Acting NLRB General Counsel William Cowen warned state lawmakers last month against enacting laws that are typically in the federal agency’s domain, stating that “concern that the National Labor Relations Board is unable to fulfill its statutory duties … is unfounded.” Similar legislation is pending in Massachusetts and California where that bill is currently sitting on the governor’s desk awaiting his signature. More details.
Starbucks – Workers in three states took legal action against the company, saying it violated the law when it changed its dress code and refused to reimburse employees who had to buy new clothes. The employees, who are backed by the union organizing Starbucks’ workers, filed class-action lawsuits in state court in Illinois and Colorado. Workers also filed complaints with California’s Labor and Workforce Development Agency. If the agency decides not to seek penalties against Starbucks, the workers intend to file a class-action lawsuit in California, according to the complaints. More details.
Misc.
Prince Georges County, MD – An ordinance was introduced that would significantly restrict the construction of new drive-thru restaurants in the county. The proposal would ban drive-thru restaurants in residential areas and restrict them to certain zoning districts as well as create a special permitting process for that sector only. The sponsor cited “unhealthy menus” at quick service restaurants as the impetus for the bill. Chances for passage are unclear, and if passed, litigation is likely. More details.
McDonald’s – McDonald’s is launching the Grassland Resilience and Conservation Initiative, along with the National Fish and Wildlife Foundation (NFWF), the U.S. Department of Agriculture’s Natural Resources Conservation Service (NRCS) and other key McDonald’s suppliers. The initiative will invest more than $200 million over the next seven years to help promote and accelerate regenerative grazing practices, habitat restoration, water and wildlife conservation on cattle ranches spanning 4 million acres across up to 38 states. Participating ranchers will have the opportunity to leverage tools and resources to help them improve wildlife habitats, conserve water and enhance soil health. NFWF will independently award competitive grants to organizations that will assist participating ranchers in adopting practices that advance wildlife conservation and regenerative agriculture. Suppliers Cargill, Golden State Foods, Lopez Foods, OSI and The Coca-Cola Company also have committed money to the effort. HHS Sec. Kennedy publicly lauded the effort. More details.
Key Takeaways
- Last week, the Congressional Budget Office released revised demographic data showing that U.S. population growth will slow to a crawl over the next few decades as fertility rates decline and net immigration shrinks due to stricter enforcement. Deaths are now projected to exceed births in 2031. Just eight months ago, CBO had projected that threshold wouldn’t be crossed until 2033. By 2055, the U.S. population will be about 367 million, up from 350 million today. In Jan., CBO had projected a 2055 population of 372 million. By the early 2050s, according to the latest projections, population growth will effectively be zero. What this means for employers, especially those in the service sector, is that labor scarcity and the resulting upward pressure on wages will be an unrelenting constant for the business model going forward.
- Brands have been dealing with employees, managers, and even owner-operators that have posted insensitive online comments related to Charlie Kirk’s slaying. Many companies, including many restaurant brands, have acted and fired employees over comments. Starbucks recently posted a statement that customers can use the name Charlie Kirk for their orders after an in-store incident. There is also an online petition calling upon Starbucks to memorialize his favorite drink. This serves as the latest example of how quickly external issues can impact a brand’s reputation if handled improperly. Public affairs teams need to be advising the c-suite on how to navigate through tense periods, such as this.