Regulatory Wrap-Up
Wages
St Paul, MN - The city council continues to debate legislation to raise the city’s minimum wage to $15/hr over several years. An amendment to extend the phase-in for small businesses passed with a 5-2 vote despite opposition from labor representatives. The new language decreases the initial hike slated for 2020 by $1.50/hr for small businesses with 5-100 employees and by $1.75/hr for those with fewer than five workers, referred to as micro-businesses. It also extends the timeline to reach $15/hr to 2026 for small businesses and to 2028 for micro-businesses. Franchisees that are part of a system with ten or more locations nationwide are considered large businesses under the proposed law.
Wage Theft
Red Robin - A class of more than 18,500 workers was certified by a federal judge in California. The workers allege that the restaurant chain underpaid wages, failed to reimburse employees for work expenses and didn't not follow state law regarding rest breaks.
Paid Leave
New Jersey - A senate committee approved legislation to expand the state’s paid family leave law. Among other changes, the legislation doubles the time employees can take off (from 6 to 12 wks/yr) to care for a newborn or other family member. It also increases the amount an employee can collect while on leave from 66% to 80% of the average weekly wage. Former Governor Christie vetoed a similar bill several times highlighting the questionable financial solvency of expanding the program.
Albany County, NY - The county legislature held a second public hearing on legislation to mandate businesses provide seven days of paid leave to employees per year. The language has been amended to allow small businesses with fewer than five workers to provide unpaid sick leave. The language has also reduced the number of days employers with 5-100 workers must provide to five.
Cava - The chain restaurant joined over 300 other companies nationwide and announced that it will give its employees paid leave to vote on Election Day.
Reynolds American, Inc. - The tobacco company announced a 16-week paid parental leave program for all full-time employees.
Scheduling
Boston, MA - Councilmember Michelle Wu introduced a “fair workweek” ordinance. The bill is being positioned as applying to city workers; however, “covered employers” is also defined as “the city of Boston and any firm, vendor, contractor, or supplier of goods and/or services to the City of Boston, and any of its subcontractors.” The rest of the language mirrors other laws passed in localities across the country and several councilmembers referenced multiple private-sector employers in the hotel, retail and restaurant industries during comments at introduction.
Labor Policy
EEOC - The Equal Employment Opportunity Commission alleged in a suit against Appalachian Wood Products, Inc. that the cabinet supplier broke federal law by requesting private medical information and then not hiring applicants who were taking medically-prescribed Suboxone. Suboxone is an FDA-approved treatment for opiate addiction. The suit alleges that the employer asked applicants medical questions that violated their privacy and then discriminated against the applicants based on their answers.
Labor Department - The administration officially rolled out the proposed rule that would allow small businesses to pool resources to offer retirement plans for employees. The comment period is open through Dec. 24.
Labor Department - The administration announced the launch of the “New and Small Business Assistance” website designed to provide streamlined information regarding Wage and Hour division compliance issues.
NLRB - The National Labor Relations Board indicated that the issue of “ambush elections” is not on its priority list for the next year. The Obama-era rule reduced the time allowed for a union election process which employers say unfairly favors the labor side in negotiations.
U.S. Supreme Court - The court has three prominent cases before it that involve determining the extent to which an employee can sue their employer and may provide clarity around the limits, if any, of mandatory arbitration clauses in employment contracts. Court experts predict the 5-4 conservative court may side with employers in the cases. The three cases that deal with distinct technical issues are New Prime Inc. v. Oliveira, Lamps Plus Inc. v. Varela, and Henry Schein Inc. v. Archer and White Sales Inc.
Washington D.C. - The city council approved a bill that mandates restaurant employers provide anti-sexual harassment training to all employees. The bill also establishes a hotline that restaurant employees can call if they suspect their employer is keeping any portion of their tips. The bill’s passage comes soon after the council voted to repeal a voter-passed initiative that would have eliminated the city’s tip credit.
Uber - The ride-hailing company announced an expansion of its temporary staffing function for a variety of jobs including waiters, bartenders, security officers and other temporary workers. For the last several months the company ran a pilot program in Los Angeles and is now expanding efforts to Chicago and other markets.
Health Care
Labor Department - The administration issued a proposed rule that would enable workers to buy their own health insurance and get reimbursed by their employer. Under the rule, money provided would remain exempt from federal income and payroll taxes.
Microsoft - The Seattle-based company is offering its employees a new health plan that collaborates with an insurer and service provider to focus on primary care and to provide a better consumer experience for employees. The announcement comes as more companies, particularly in the tech industry, are establishing innovative offerings designed to lower the cost of care.
Trade
China - In a departure from recent precedent, the Trump administration is not accepting applications for product exceptions from the latest tranche of $200 billion worth of imports from China that are subject to 10%-25% tariffs. The previous two tranches were open for public comment and the USTR held hearings during which they considered specific product exemptions in some cases.
Soda Taxes
Seattle, WA - The city’s soda tax is expected to bring in roughly $21 million this year, $6 million above the city’s estimate. The mayor is proposing the extra funds be directed to the general budget to help programs for the homeless and other city priorities. Some on the council would prefer the extra revenue be spent on healthy food initiatives as the law intended. Meanwhile, a statewide voter initiative to ban localities from implementing similar measures is on the ballot in November.
Swipe Fees
New York - New York is one of 11 states that allows merchants to provide a discount for using cash instead of a card. The state’s highest court determined that a merchant must post both the price for a purchase with a card and the discounted price for purchasing with cash.
Key Takeaways
Legislature Status for Week of 10/29/18
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 Nation's Restaurant News website, or by clicking here, and when you download the podcast and subscribe on iTunes here.
St Paul, MN - The city council continues to debate legislation to raise the city’s minimum wage to $15/hr over several years. An amendment to extend the phase-in for small businesses passed with a 5-2 vote despite opposition from labor representatives. The new language decreases the initial hike slated for 2020 by $1.50/hr for small businesses with 5-100 employees and by $1.75/hr for those with fewer than five workers, referred to as micro-businesses. It also extends the timeline to reach $15/hr to 2026 for small businesses and to 2028 for micro-businesses. Franchisees that are part of a system with ten or more locations nationwide are considered large businesses under the proposed law.
Wage Theft
Red Robin - A class of more than 18,500 workers was certified by a federal judge in California. The workers allege that the restaurant chain underpaid wages, failed to reimburse employees for work expenses and didn't not follow state law regarding rest breaks.
Paid Leave
New Jersey - A senate committee approved legislation to expand the state’s paid family leave law. Among other changes, the legislation doubles the time employees can take off (from 6 to 12 wks/yr) to care for a newborn or other family member. It also increases the amount an employee can collect while on leave from 66% to 80% of the average weekly wage. Former Governor Christie vetoed a similar bill several times highlighting the questionable financial solvency of expanding the program.
Albany County, NY - The county legislature held a second public hearing on legislation to mandate businesses provide seven days of paid leave to employees per year. The language has been amended to allow small businesses with fewer than five workers to provide unpaid sick leave. The language has also reduced the number of days employers with 5-100 workers must provide to five.
Cava - The chain restaurant joined over 300 other companies nationwide and announced that it will give its employees paid leave to vote on Election Day.
Reynolds American, Inc. - The tobacco company announced a 16-week paid parental leave program for all full-time employees.
Scheduling
Boston, MA - Councilmember Michelle Wu introduced a “fair workweek” ordinance. The bill is being positioned as applying to city workers; however, “covered employers” is also defined as “the city of Boston and any firm, vendor, contractor, or supplier of goods and/or services to the City of Boston, and any of its subcontractors.” The rest of the language mirrors other laws passed in localities across the country and several councilmembers referenced multiple private-sector employers in the hotel, retail and restaurant industries during comments at introduction.
Labor Policy
EEOC - The Equal Employment Opportunity Commission alleged in a suit against Appalachian Wood Products, Inc. that the cabinet supplier broke federal law by requesting private medical information and then not hiring applicants who were taking medically-prescribed Suboxone. Suboxone is an FDA-approved treatment for opiate addiction. The suit alleges that the employer asked applicants medical questions that violated their privacy and then discriminated against the applicants based on their answers.
Labor Department - The administration officially rolled out the proposed rule that would allow small businesses to pool resources to offer retirement plans for employees. The comment period is open through Dec. 24.
Labor Department - The administration announced the launch of the “New and Small Business Assistance” website designed to provide streamlined information regarding Wage and Hour division compliance issues.
NLRB - The National Labor Relations Board indicated that the issue of “ambush elections” is not on its priority list for the next year. The Obama-era rule reduced the time allowed for a union election process which employers say unfairly favors the labor side in negotiations.
U.S. Supreme Court - The court has three prominent cases before it that involve determining the extent to which an employee can sue their employer and may provide clarity around the limits, if any, of mandatory arbitration clauses in employment contracts. Court experts predict the 5-4 conservative court may side with employers in the cases. The three cases that deal with distinct technical issues are New Prime Inc. v. Oliveira, Lamps Plus Inc. v. Varela, and Henry Schein Inc. v. Archer and White Sales Inc.
Washington D.C. - The city council approved a bill that mandates restaurant employers provide anti-sexual harassment training to all employees. The bill also establishes a hotline that restaurant employees can call if they suspect their employer is keeping any portion of their tips. The bill’s passage comes soon after the council voted to repeal a voter-passed initiative that would have eliminated the city’s tip credit.
Uber - The ride-hailing company announced an expansion of its temporary staffing function for a variety of jobs including waiters, bartenders, security officers and other temporary workers. For the last several months the company ran a pilot program in Los Angeles and is now expanding efforts to Chicago and other markets.
Health Care
Labor Department - The administration issued a proposed rule that would enable workers to buy their own health insurance and get reimbursed by their employer. Under the rule, money provided would remain exempt from federal income and payroll taxes.
Microsoft - The Seattle-based company is offering its employees a new health plan that collaborates with an insurer and service provider to focus on primary care and to provide a better consumer experience for employees. The announcement comes as more companies, particularly in the tech industry, are establishing innovative offerings designed to lower the cost of care.
Trade
China - In a departure from recent precedent, the Trump administration is not accepting applications for product exceptions from the latest tranche of $200 billion worth of imports from China that are subject to 10%-25% tariffs. The previous two tranches were open for public comment and the USTR held hearings during which they considered specific product exemptions in some cases.
Soda Taxes
Seattle, WA - The city’s soda tax is expected to bring in roughly $21 million this year, $6 million above the city’s estimate. The mayor is proposing the extra funds be directed to the general budget to help programs for the homeless and other city priorities. Some on the council would prefer the extra revenue be spent on healthy food initiatives as the law intended. Meanwhile, a statewide voter initiative to ban localities from implementing similar measures is on the ballot in November.
Swipe Fees
New York - New York is one of 11 states that allows merchants to provide a discount for using cash instead of a card. The state’s highest court determined that a merchant must post both the price for a purchase with a card and the discounted price for purchasing with cash.
Key Takeaways
- In anticipation of a Democratic takeover of the U.S. House and a subsequent barrage of investigations and hearings, major industries and companies are busy hiring Democratic lobbying firms, public relations firms and other resources with access to Democratic leadership. Our industry can expect increased scrutiny on a number of major issues including wage disparity, gender equity and sexual harassment.
- Companies need to pay attention to Uber’s simultaneous and aggressive entry into both the restaurant industry as well as the staffing industry. A company whose core business strategy is disruption has now entered a space where they can quickly change customer and employee expectations - just as they did with the taxi industry. Operators should not look past or discount what is happening with Uber.
Legislature Status for Week of 10/29/18
- The United States Senate is on recess this week
- The United States House is on recess this week
- Two state legislatures are meeting actively this week:
- MA & NJ
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 Nation's Restaurant News website, or by clicking here, and when you download the podcast and subscribe on iTunes here.
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