Regulatory Wrap-Up
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Regulatory Wrap-Up

BY HBSDealer Staff

Wages

Federal – This week, at an event sponsored by the Restaurant Opportunities Center and their One Fair Wage Campaign (the effort to eliminate the tipped wage), Rep. Rashida Tlaib (D-MI) called for a $20/hr minimum wage. She’s been seen as a rising star within the progressive movement but gained broader notoriety when President Trump identified her as part of “the squad.”  The event continues to show ROCs ongoing efforts to grow progressive adoption of their agenda in Washington, D.C.

Florida – Orlando attorney John Morgan announced this week that he has gathered more than enough signatures to qualify his minimum wage proposal for the 2020 ballot. The state statute calls for a minimum threshold of 766,200 verified signatures to qualify. He announced that he has now collected over a million signatures of which 363,157 have been verified to date. Under the proposed minimum wage amendment, the state’s rate would increase to $10/hr on Sept. 30, 2021, escalating $1/yr until it reaches $15/hr on Sept. 30, 2026. The state’s current minimum wage is $8.46/hr.

Idaho – Activists announced that they have gathered 5,000 of the roughly 55,000 petitions needed to place a minimum wage measure on the ballot. Petitions have to be submitted by April 2019. The mandate would eliminate the state’s tipped wage as well as the training wage, and it would raise the state’s rate to $12/hr.

Emeryville, CA – Under pressure from activists, the city council repealed an amendment to the city’s minimum wage requirement that had frozen the minimum wage at $15/hr for restaurants with fewer than 55 employees. The city’s minimum wage rose to the highest in the country on July 1 (to $16.30/hr up from $15/hr). That rate will now apply to all restaurants in the city.

Paid Leave

Texas – The state attorney general intervened in a lawsuit brought by area businesses against the city of San Antonio to block the local paid leave mandate from going into effect. While not binding on the final outcome, it was an important political achievement by the business community. Additionally, the city of San Antonio successfully sought a delay in implementation of the paid leave ordinance until December 1, 2019 to allow the legal process to play out. Dallas businesses face a similar mandate and the Texas Public Policy Foundation announced this week that it will pursue a lawsuit to block that ordinance.

Oregon – The governor signed legislation requiring 12 weeks of paid family leave. The cost of the program is split between employers and employees, 60 percent and 40 percent respectively. Small businesses, defined as companies with fewer than 25 employees, could apply for grants to cover some costs of the program.

Labor Policy

California – The state supreme court will decide whether the new independent contractor standard, established in the recent Dynamex case, will apply to gig economy companies like Uber and Lyft. A federal appeals court had already decided that the case retroactively applied to transportation network companies, but the court withdrew that decision and has referred it back to the state court. The timing of a final decision is unclear.

Bill DeBlasio – In an effort to boost his struggling presidential campaign, the New York City mayor announced his proposal for a “Workers’ Bill of Rights.” Among other provisions, the proposal calls for a national $15/hr minimum wage, two weeks of paid time off and a “just cause” policy to replace at-will employment.

Scheduling

Chicago, IL – The city council unanimously approved a predictive scheduling ordinance. Under the new law, employers will have to give at least 10 days advance notice of workers’ schedules starting July 1, 2020, and that will grow to a minimum of 14 days notice two years later. If an employer changes a worker’s schedule less than two weeks before the shift, it will have to give the worker an hour of “predictability pay” at the regular wage rate. If an employer cancels or reduces hours within 24 hours of the start of a previously scheduled shift, it will have to pay workers half of what they would have made had they worked. The ordinance does not prevent workers from trading shifts or requesting changes to their schedule. Employers can also change an employee’s hours without penalty when it is mutually agreed upon in writing. Restaurants with fewer than 250 employees and fewer than 30 global locations are exempt from this ordinance.

Labor Activism

Little Big Burger – Little Big Burger employees rejected representation by the Little Big Union affiliated with the International Workers of the World (IWW). Of the 109 eligible voters, the final vote was 41 “no,” 29 “yes,” and 12 ballots are being challenged or contested. Adding the challenged ballots to the union votes would result in a tie, 41 to 41, which is a rejection of the union. The union has until the end of the month to contest the outcome of the election and request another vote.

Private Equity – A collection of union-backed organizations is ramping up their attacks on private equity firms that are “pillaging American retail.” This follows Sen. Elizabeth Warren’s introduction of legislation that would stop “Wall Street” from “gutting companies and loading them with debt.” Recent retail bankruptcies have spurred organizing efforts and in some cases, those campaigns have resulted in enhanced severance payments.

Misc.

Texas – The governor signed into law legislation that bars governments from taking “adverse” actions against companies on the basis of their religious beliefs or affiliations. The action stems from the city of San Antonio’s earlier efforts to deny airport concession space to Chick-fil-A due to the company’s stances on social issues, hence the titling of the bill as the “Save Chick-fil-A Act.”

Key Takeaways

  • Last week, both Coke and Pepsi parted ways with one of their key trade associations, the Plastics Industry Association. The move was a result of their collective corporate decisions to pivot from playing defense on ordinance after ordinance across the country and adjust their business models to get in front of the issue. To that point, both companies announced this week that they are pursuing the goal of having 100% of their packaging made from recyclable, compostable or biodegradable materials by 2025. This action will further isolate other consumer-facing brands, like restaurants, who in the absence of an alternative, will be forced to continue their uphill battle against packaging proposals.

 

  • Presidential candidate Pete Buttigieg became perhaps the first candidate in American history to provide prominent space in his campaign platform to the issue of independent contracting. Buttigieg prefers an ABC test similar to California’s and many other Democratic presidential candidates have voiced their support for this approach. This is notable because a once-sleepy issue for policy wonks has made its way to the mainstream of political conversation. Expect issues related to the “fissured workplace” to continue to drive both federal and state employment law conversations.

 

  • A new union campaign tactic – targeting private equity firms – is worth watching. Clearly, the labor community hopes to portray private equity firms as corporate raiders that leave bankrupt companies and out-of-work employees in their wake. Their call for increased regulation and transparency is intended – among other things – to give unions increased leverage in corporate campaigns. At this point, it’s unclear how much their attacks will resonate or whether they have staying power, but it’s possible over time that private equity investment could invite additional scrutiny and potentially carry reputational liability as well. With so much private equity money currently flowing into the restaurant industry, our brands would be wise to keep tabs on this effort.

Legislature Status for Week of 7/29/19

  • The United States Senate is in session this week
  • The United States House is in recess this week
  • Five state legislatures are in regular session: MA, MI, NJ, NC & WI

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.

The Regulatory Wrap-Up is presented by Align Public Strategies. Click here to learn how Align can provide your brand with the counsel and insight you need to navigate the policy and political issues impacting retail.

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