COVID-19
Health and Safety – This week the FDA approved Pfizer booster shots for a wider array of audiences. The CDC also approved Pfizer booster shots, aligning with the FDA’s approval. That approval process was somewhat irregular in that the CDC Director overruled an advisory panel that advised narrowing the booster’s availability. Among other recommendations, the panel had voted against giving booster shots to adults at a higher risk of exposure to the virus due to their workplace or institutional setting. Of particular importance for restaurant brands, many states may once again categorize restaurant and retail workers as essential, making them eligible for the booster. Brands need to pay attention to how various states categorize workers as well as policies (paid leave, for instance) or incentives for workers that receive the shot. More details.
Wages
Labor Department – The agency finalized a new rule that would impose monetary penalties of up to $1,100 on employers who take workers’ tips. It replaces a Trump-era regulation that constrained the fines to instances in which the agency could prove employers took the tips willfully or repeatedly. The new regulation also clarifies that managers or supervisors can contribute to mandatory tip pools and other tip-sharing arrangements, and that managers and supervisors can only keep tips that were given for work provided “directly and solely” by the manager or supervisor. More details.
Puerto Rico – The governor signed legislation to raise the minimum wage to $8.50/hr effective Jan.1. and to $9.50/hr by July 2023. This is the first increase in over a decade. The cash wage for tipped employees remains frozen at $2.13/hr. More details.
New York, NY – The city passed an ordinance that will study food delivery working conditions with an eye toward raising the minimum wage for delivery drivers by Jan. 2023. The study will consider how delivery workers are paid, the total income food delivery workers earn, the equipment required to perform their work, the hours worked, and the average mileage of a trip, among other items. More details.
Washington, D.C. – The D.C. Board of Elections approved the language of a new ballot initiative, Initiative 82, which would end the tip credit by 2027. It would raise the mandatory tipped wage (now $5.05/hr, indexed to inflation) to parity with the city’s minimum wage over that period, which is currently $15.20/hr, indexed to inflation. Supporters must now gather signatures to ensure the measure appears on the ballot in D.C.’s primary election next June. A similar initiative that would have eliminated the tip credit, passed in a citywide referendum in 2018 but was overturned by the city council. More details.
One Fair Wage – The labor advocacy group hosted a webinar to highlight their new report that, among other things, found that more than 34 percent of workers surveyed reported more violations of their rights in 2021 compared with last year. Nearly 35 percent said their tips and additional wages did not bring them up to their state’s minimum wage and nearly half (47 percent) said they were not compensated for overtime. Labor Secretary Marty Walsh appeared at the event in support of the group led by Restaurant Opportunities Center founder Saru Jayaraman. More details.
Paid Leave
JetBlue – The Transport Workers Union of America is taking the company to court, alleging that it violated paid sick leave laws in New York. The laws require employers to grant workers up to 56 hours of paid sick time each year. According to the suit, employers cannot require a doctor’s note unless the employee calls in sick three consecutive days, but it claims JetBlue is demanding it for one or two sick days. More details.
Labor Policy
Infrastructure – President Biden met with Democratic members of Congress this week in an attempt to break the logjam on infrastructure negotiations. Progressive and moderate wings of the Democratic caucus continue to debate the size and scope of the so-called soft infrastructure package that will be advanced through the budget reconciliation process. This week a group of fifty CEOs, including the CEO of Pizza Hut, called for the inclusion of childcare in the final package. A national paid leave program is likely to be included as well. Republican House members mobilized this week in opposition to both the bipartisan infrastructure deal as well as the soft infrastructure package. More details.
NLRB – The Service Employees International Union (SEIU) filed a lawsuit against the National Labor Relations Board challenging its joint-employer regulation. The complaint, filed in Washington, D.C., federal court said the 2020 rule, which the current NLRB is widely expected to repeal, violates federal labor law by limiting the factors the board can consider in determining whether a company can be held jointly liable for legal violations and be made to bargain with unions. The union said that in particular, the rule arbitrarily excludes health and safety issues from the set of employment conditions a company must control to be found a joint employer. More details.
OSHA -The agency will launch a rulemaking process to develop a workplace heat standard to protect workers in both indoor and outdoor settings. A proposed rule is scheduled to be published in the Federal Register next month for public comment. Included in the pool of affected workers are kitchen staff. More details.
California – The governor signed legislation making California the nation’s first state to impose restrictions on online delivery giants like Amazon to ensure that warehouse workers get required rest and bathroom breaks despite production quotas. The new law will bar companies from enforcing quotas and penalties that affect employees’ health and safety, including the ability to take breaks or use the bathroom. It will also require companies to disclose their quotas and work-pace requirements to employees and state agencies. More details.
Activism
Darwin’s – The Boston-area four-unit coffee chain said it will recognize a union formed by its employees without going through the formal election process. “If the Union has a written support of a majority of our employees, Darwin’s will recognize the Union and begin negotiations for a contract,” the Cambridge-based café chain said in its Twitter post. The union, calling itself Darwin United, is affiliated with UNITE HERE, one of the major national unions representing food service workers. More details.
Restaurant Opportunities Center – The advocacy group entered into a partnership with SUNY Empire State College whereby all Restaurant Opportunities Center United (ROC United) members, their employees, retirees, and family members have access to heavily subsidized degree programs and other benefits to assist in achieving a college degree. More details.
Delivery
New York, NY – Lawmakers in New York City passed several bills that seek to improve working conditions and set minimum pay for food delivery workers. The move makes New York City the first to pass sweeping legislation that regulates the delivery industry. Included in the bills are provisions such as: drivers can set a maximum distance per trip they travel; food delivery apps can’t charge couriers for payment of their wages, and they have to pay delivery workers at least once a week; drivers can choose not to accept trips over bridges or in tunnels; apps need to provide the driver, before a trip begins, with the food pickup location, the destination, and the estimated time and distance, and; food delivery apps can’t solicit a tip unless they disclose how much is paid to the delivery worker, and whether or not it’s available immediately or paid in cash. More details.
Philadelphia, PA – Legislation was introduced to make permanent the existing temporary cap of 15 percent on food service delivery fees. The bill is expected to pass. More details.
DoorDash – The company announced that it will now deliver alcohol. Customers of drinking age can use the alcohol tab on the DoorDash app to order beer, wine, and spirits from a selection of restaurants, grocery stores, convenience stores, and local retailers. The company said it will check the buyer’s ID in the app and during delivery. More details.
Sustainability
McDonald’s – The company announced new global sustainability goals to reduce virgin fossil-fuel based plastics in its Happy Meal toys by 90 percent within the next five years. Over a billion Happy Meals are served each year making the company one of the largest toy distributors in the world. More details.
Restaurant Brands International – The parent company of Burger King, Popeyes, and Tim Horton’s announced new targets on climate-change-related greenhouse gases, saying it would work with franchisees and suppliers to cut emissions 50 percent by 203 and set a target to achieve net-zero emissions by 2050 or sooner. More details.
Key Takeaways
- The new regulatory framework for the delivery industry in New York City could have a dramatic effect on the delivery marketplace itself. The bundle of new laws will certainly build significant additional cost into the model, potentially making food delivery itself less feasible for some customers. Operators will likely be forced to counter by reducing costs on the frontside, namely in the food preparation space. The new laws may ultimately expedite the ghost kitchen model for many operators or some may choose to bring the delivery function in house. Brands would be wise to closely monitor the marketplace impacts in the city.
- The collaborative seminar this week with One Fair Wage and Labor Secretary Marty Walsh is significant and could have real world ramifications. Many will remember the cozy relationship that the Obama Administration had with activist groups like One Fair Wage and the Restaurant Opportunities Center (ROC) going so far as to essentially deputizing the groups to identify workplace violations. We should be vigilant in closely watching – and preparing – for a similar type of relationship and arrangement between labor activists and the Biden Administration.
- RBI is one of the first major restaurant brands to make a commitment to carbon neutrality. Many other major brands have made similar commitments and over the coming years, many more will. Expect increased scrutiny in the coming years over brands’ commitment to reducing their carbon footprint.