Wages
Florida – Effective Sept. 30, the state’s minimum wage will go up a dollar, from the current hourly rate of $12/hr to $13/hr. The increase is due to a 2020 voter-approved constitutional amendment. As required by the amendment, the minimum wage is scheduled to go up to $14/hr in 2025 and reach $15/hr on Sept. 30, 2026. In 2028, the minimum wage will resume the increases, but the changes will be dependent on the Consumer Price Index. The server wage will increase next week to $9.98/hr. Those workers also are slated to receive annual minimum wage increases until reaching $11.98/hr in 2026. More details.
Massachusetts – New polling data commissioned by WBUR in Boston (an NPR affiliate) found that just 43 percent of poll respondents said they’d vote yes on Question 5, the pending ballot measure to eliminate the tip credit by 2029. Forty percent of respondents said they’d vote no, and another 16 percent said they weren’t sure or refused to answer the question. The poll of 800 likely voters was conducted Sept. 12 to 18 and has a margin of error of 4.1 percent. More details.
Michigan – Compromise legislation that had 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, was not acted upon during this week’s two-day session. Any potential action will be delayed until after the election. Under the pending wage proposal, the tipped minimum wage would remain at 38 percent of the state’s minimum wage, rather than being phased out. For context, the legislature is potentially 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.
Paid Leave
Nebraska – Organizers of a Nov. ballot measure that would require Nebraska businesses to provide employees with a minimum level of paid sick leave announced this week that they had secured the public backing of more than 200 businesses. Paid Sick Leave for Nebraskans rolled out the list of supportive businesses as part of the latest step in a campaign that has yet to draw organized public opposition. Years of polling on the issue indicates bipartisan support. The ballot measure would require businesses with 20 or fewer employees to fund a minimum of five paid sick days a year for full-time employees. Bigger businesses would be required to fund seven days of paid sick leave. Full- and part-time employees would earn an hour of paid sick leave for every 30 hours worked. More details.
Labor Activism
Waffle House – The Union of Southern Service Workers (USSW), an affiliate of the SEIU, filed a complaint with the Labor Department accusing the company of engaging in “rampant wage theft like performing non-tipped work for tipped wages.” The complaint cites the company’s use of the tip credit to pay servers a tipped wage even when they are performing unrelated, non-tipped tasks such as dishwashing or cooking. According to the document, the company does not employ dishwashers, kitchen helpers, or janitors, but relies on servers to clean the restaurant and wash dishes. They allege that janitorial and dishwashing work are not infrequent tasks, but a core part of servers’ duties. Waffle House has been the subject of a corporate campaign by the USSW for the last two years. More details.
Swipe Fees
Justice Department – The agency filed a civil antitrust suit in New York for “monopolization” and other unlawful conduct against Visa, the world’s largest payments network. The Justice Department claims that Visa propped up an illegal monopoly over debit payments by imposing “exclusionary” agreements on partners and smothering upstart firms. According to the agency, Visa’s conduct over the years has resulted in American consumers and merchants paying billions of dollars in additional fees. “We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” Attorney General Merrick Garland said in a release. More than 60 percent of debit transactions in the U.S. run over Visa rails, helping it charge more than $7 billion annually in processing fees, according to the DOJ complaint. The payment networks’ decades-old dominance has increasingly attracted attention from regulators and retailers. More details.
Misc.
California – The governor signed legislation amending the existing California Franchise Investment Law. The updated law adds that independent franchise sellers, including franchise brokers and franchise sales organizations, must register annually in California prior to engaging in franchise sales activity in the state and provide information about their experience, franchised industries represented, services offered, compensation received, recent litigation (if any), and brands for whom the franchise seller sold franchises during the preceding year. The legislation will go into effect July 1, 2026. The measure was a brokered compromise between the International Franchise Association (IFA) and the Coalition of Franchisee Associations (CFA). More details.
Key Takeaways
- In just a matter of a few weeks, state lawmakers have announced no-taxes-on-tips legislation in five states. For context, former President Trump, campaigning at a rally in Nevada in June, said that his administration would eliminate taxes on tipped income as a “first thing” if he is elected. Vice President Harris subsequently embraced the idea. Now Republican lawmakers in Michigan, New York, Ohio, and Oregon have announced they are introducing bills to end taxes on tips. A similar effort was recently defeated in California. We should expect an onslaught of similar bills in the 2025 state legislative sessions. Federal and state tax laws around tipping are complex and the industry, while seemingly supportive of the concept, needs to be vigilant that any bills proceeding through state legislatures next year don’t lead to unintended consequences that could be detrimental to operators.
- This week, new Starbucks CEO Brian Niccol responded to a letter sent to him by the bargaining delegation from Starbucks Workers United, committing to “engage constructively” with the union, which represents nearly 500 Starbucks stores. In the letter to Niccol, the union encouraged Starbucks to “do more to act boldly, be forward thinking, and be the best-in-class in setting standards to support partners throughout the system and industry, which in turn improves the customer experience.” Niccol’s response, among other things, said that he “deeply respects” the right of partners to “choose to be represented by a union.” Whether the changing tone and tenor of the company’s new leadership will impact the ongoing collective bargaining negotiations is unclear. It does, however, set a new environment for cooperation that other brands, when and if faced with an organizing campaign, will have to consider when formulating their strategies.
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.