Minimum wage

by David Klemt David Klemt No Comments

FAST Act Fight Appears to be Over

FAST Act Fight Appears to be Over

by David Klemt

Tray with In N Out burgers and French fries

Well, that was fast: If recent reports are accurate—and it appears they are—the battle over the FAST Act has come to a close.

Rather than fight on the ballot, fast-food chain operators and labor groups have struck a deal. Per some reports, this puts a halt to a referendum battle that could have cost more than $100 million in campaign funds.

On its face, the deal is quite simple. AB 257, known as the Fast Food Accountability and Standards Recovery—or FAST Act—is dead. That is, dead save for one provision: the creation of the Fast Food Council will move forward.

The council will have a total of eleven members. Nine will have the power to vote, two will be non-voting members. The breakdown will be as follows:

  • two representatives of the fast-food restaurant industry (2);
  • two franchisees or restaurant owners (2);
  • two restaurant employees (2);
  • two advocates for fast-food restaurant employees (2);
  • member of the public who is not affiliated with either side (1, will serve as chair); and
  • members from the Department of Industrial Relations and the Governor’s Office of Business and Economic Development (2, non-voting)

Their first meeting is on the schedule for March 15.

In exchange, fast-food workers will see the minimum wage bump up to $20 per hour should they be in the employ of a fast-food chain with more than 60 locations throughout the US. That pay rise will come in April 2024.

When it comes to further pay rises, the council has two options:

  • An annual wage increase of 3.5 percent; or
  • An increase based on average changes to the consumer price index each year.

As one might expect, the rise will be whichever number is lower.

What was AB 257?

To summarize, FAST would’ve done the following:

  • Establishes the Fast Food Council, ten members appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee. The council will operate until January 1, 2029.
  • Defines “the characteristics of a fast food restaurant.”
  • Gives the Fast Food Council the authority to set “minimum fast food restaurant employment standards, including standards on wages, working conditions, and training.”
  • Provides the council the power to “issue, amend, and repeal any other rules and regulations, as necessary.”
  • Allows the formation of a Local Fast Food Council by a county, or a city that has a population of more than 200,000.

Click here to review the bill’s text in its entirety.

Why is this Important?

It’s entirely possible that similar bills will pop up in other states in the coming years.

If this result is anything go by, such bills may be used by QSR operators and labor groups as negotiating tactics. The most recent news regarding the FAST Act should have the attention of both operators and hospitality workers. In California alone, the pay rise is expected to affect at least 500,000 workers.

However, there is one provision of the FAST Act that workers may find less than encouraging. The deal that has been struck kills a notable provision: fast-food operators, at least in California, won’t be held legally responsible for labor violations that occur in franchise locations.

Operators in other states should keep an eye out for similar bills, as should all hospitality professionals.

Image: Kenny Eliason on Unsplash

by David Klemt David Klemt No Comments

American Trends 2023: Technomic

American Trends 2023: Technomic

by David Klemt

Pink pineapple against pink background

Foodservice research firm Technomic has some interesting predictions for the hospitality industry in the United States of America this year.

On the topic of operations, Technomic foresees more negotiating power among workers. Additionally, the firm looks at both the economy and pent-up guest demand.

When it comes to food, the US and Canada have a trend prediction in common. And as the image atop this article signifies, a particular color may be a hit on menus in 2023.

Before we jump in, Technomic’s 2023 Canadian trend predictions are here. Last year’s Technomic predictions for America are here. Curious readers can review the firm’s 2023 predictions in their entirety here.

Okay, let’s go!

Think Pink

I want to address this prediction first. According to Technomic, pink is going to be the F&B color of 2023.

As they explain, the color is fun, nostalgic, and photogenic. Yes, operators must still consider the Instagram-worthiness of their menu items. That may change one day, but it’s not today.

Per Technomic, pink also signals that a food or drink may have antioxidants.

Some of the items the research firm names specifically: pink pineapple, pink salt, pink celery, cara cara oranges, and schisandra berries.

Pickle It

This is the culinary trend that, per Technomic, Canada and America will share in 2023.

Along with fermenting, pickling gives the kitchen and bar teams a unique experimentation method to explore. So, encourage these teams to get creative and add pickling and fermentation to your next menu update.

Of course, that’s not the only reason to consider putting pickling front and center. For many, these preparations indicate a healthy F&B choice. Think kombucha, as an example.

As we know, healthy choices continue to be top of mind for many guests.

One more note: Technomic suggests being transparent and identifying the pickling and fermenting processes your team leverages to produce each menu item.

Economics

For those looking for a bit of optimism in these trying times, Technomic may have what you’re looking for. This year’s report, What We Foresee for 2023, says the following about the possibility of a recession:

“There is reason for optimism in the coming year, however, as any recession is expected to be relatively mild.”

Yes, that’s just one source’s opinion. However, Technomic is known for their voraciousness when it comes to data. So, if this firm is optimistic it could be a solid sign that things are looking up in 2023.

“Pent-up consumer demand” and variations thereof have been making the rounds since 2o21. However, it’s still a relevant phrase.

As it pertains to 2023, Technomic believes on-premise dining may “bounce back” this year. In fact, the firm suggests that people want to socialize and dine in person now more than ever.

Also, delivery and pickup times appear to be growing. So, plenty of people will see in-person dining as the more appealing option in 2023.

Operations

In part due to legislation addressing minimum wage and workplace conditions, employees may have the upper hand this year.

Add the fact that many people seeking work know many operators are dealing with a labor shortage and their negotiating position looks even stronger.

So, we could finally be in for a significant change when it comes to how the industry looks at compensation. More and more workers—and the guests they serve—are taking issue with tipping. Instead, many people outside and inside of the industry want to see operators pay staff a competitive, living wage.

Of course, there are also the hospitality professionals who prefer tips to minimum wage. In 2023, the industry could experience the start of a sea change. Time will tell.

For more predictions and this Technomic report in its entirety, please click here.

Image: Alex Gruber on Unsplash

by David Klemt David Klemt No Comments

Minimum Wage Rises for Most of USA

Minimum Wage Rises for Most of USA

by David Klemt

Closeup of Ben Franklin on $100 bill

More than half of the states across America are either now seeing a boost to minimum wage or plan to increase the hourly minimum by the middle of this year.

In total, minimum wage is up in 27 states. However, the rise isn’t yet in place in a handful of states, including Nevada.

Now, the federal minimum wage still has yet to go up. That rate remains at $7.25 per hour, where it has been since 2009. For the curious, if a person works 40 hours per week and is compensated at the federal minimum rate, that’s just over $15,000 per year—before taxes.

Per Motley Fool: “If we factor in inflation, [federal minimum wage] would have had to grow to $10.20 to let people buy the same amount of goods and services today [as in 2009]. In real terms, the current minimum wage has shrunk by almost 30% since it was set.”

You’ll see below that I didn’t list the increases for tipped workers. As an operator, you should already be well aware of the minimum rate your tipped workers must be paid. In all likelihood, your suite of software is already updated to the current requirements (but check yourself to be certain).

The list will provide an idea of what you’re up against. It’s difficult to recruit rock stars if you’re unable to offer wages above minimum wage, never mind at minimum wage.

Today, for most workers, the minimum isn’t going to cut it. So, when you’re looking at what you can offer, keep in mind the minimum wage for both tipped and un-tipped workers in your area.

Also, know what other operators are paying. To remain competitive, consider what else you can offer, including your values and culture.

States Increasing Minimum Wage

Below, the states with an increase to the minimum wage. Rather than organize the list by hourly rate or rate of increase, I set it up alphabetically.

  1. Alaska: $10.85 per hour
  2. Arizona: $13.85 per hour
  3. California: $15.50 per hour
  4. Colorado: $13.65 per hour
  5. Connecticut: $15 per hour (June 1)
  6. Delaware: $11.75 per hour
  7. Florida: $11 per hour (September 30)
  8. Hawaii: $12 per hour
  9. Illinois: $13 per hour
  10. Maine: $13.80 per hour
  11. Maryland: $13.25 per hour
  12. Massachusetts: $15 per hour
  13. Michigan: $10.10 per hour (could rise further; lawsuit pending)
  14. Minnesota: $8.63 per hour (small employer); $10.59 per hour (large employer)
  15. Missouri: $12 per hour
  16. Montana: $9.95 per hour
  17. Nebraska: $10.50 per hour
  18. Nevada: $11.25 per hour (July 1)
  19. New Jersey: $14.13 per hour
  20. New Mexico: $12 per hour
  21. New York: $14.20 per hour (excluding some areas); $15 per hour for fast food workers
  22. Ohio: $10.10 per hour
  23. Rhode Island: $13 per hour
  24. South Dakota: $10.80 per hour
  25. Vermont: $13.18 per hour
  26. Virginia: $12 per hour
  27. Washington: $15.74 per hour

Among the states on the list above, four are lifting minimum wage to at least $15. Those states are Connecticut, Massachusetts, California, and Washington. Additionally, the minimum wage is $15 per hour in parts of New York.

Interestingly, employers in Nevada can reduce the minimum wage by one dollar if they pay qualifying health insurance. In such a case, the hourly minimum will be $10.25.

Only one of these states, Montana, will remain under $10.

Cities, Counties, Districts

As stated above, some parts of New York have a minimum wage higher than $14.20.

There are also cities, counties, and districts boosting the minimum wage.

  • Denver, Colorado: $17.29 per hour
  • Long Island, New York: $15 per hour
  • New York City, New York: $15 per hour
  • Washington, DC: $16.50 per hour
  • Westchester County, New York: $15 per hour

Overall, more than half the country either already increased the minimum wage or will do so later this year.

Image: Adam Nir on Unsplash

by David Klemt David Klemt No Comments

FAST Act Dealt Knockdown Blow

FAST Act Dealt Knockdown Blow

by David Klemt

Boxer being knocked back by punch

A bill we think is one to watch, California’s Fast Food Accountability and Standards Recovery Act, may be on the ropes already.

Assembly Bill 257, known as the FAST Act, is “on hold” until 2024. So, while the Save Local Restaurants coalition and voters have yet to kill the bill, it may be out on its feet.

We reported two months ago that fast food chains were moving quickly to kill the FAST Act. It appears that the initial attack on AB-257 was successful.

That is, the chains and coalition got what they want: the ballot initiative vote has knocked down AB-257.

For those unfamiliar with the Save Local Restaurants Coalition, the following organizations are members: The National Restaurant Association (NRA), US Chamber of Commerce (USCC), and International Franchise Association (IFA). Further, fast-casual and QSR chain coalition members—including Starbucks, In N Out, McDonald’s, and Chipotle—threw nearly $13 million at the ballot measure that halted FAST.

What’s FAST?

To read AB-257, the FAST Act, in its entirety, click here.

In summary, FAST:

FAST does the following:

  • establishes the Fast Food Council, ten members appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee. The council will operate until January 1, 2029;
  • defines “the characteristics of a fast food restaurant“;
  • gives the Fast Food Council the authority to set “minimum fast food restaurant employment standards, including standards on wages, working conditions, and training“;
  • provides the council the power to “issue, amend, and repeal any other rules and regulations, as necessary”; and
  • allows the formation of a Local Fast Food Council by a county, or a city that has a population of more than 200,000.

Voters effectively stopped California from implementing FAST until November 2024 at the earliest. (That is, if the California Secretary of State verifies that the referendum effort did indeed secure the required amount of signatures.)

Opposition

A statement from Save Local Restaurants reads, in part:

The quick-service restaurants targeted by the law – which include coffee shops, juice bars, pizzerias, delis, and salad shops – already operate on small, single-digit profit margins. These include more than 10,000 small businesses, including thousands of women- and minority-owned businesses.

If these restaurants are forced to absorb the costs, the result will be bad for workers and local communities. To survive, many restaurant owners will have no choice but to reduce worker hours or introduce automation. Some may choose to leave their communities entirely or go out of business.

As is often the case with overreaching California policies, this is likely only the beginning.

Additionally, the National Restaurant Association, a member of the coalition, has said the following:

The impacts of the FAST Act won’t be limited to quick service restaurants in California. The law allows the new regulating council to set a higher minimum wage for quick service restaurants. Independent restaurants will, however, be forced to increase their pay to match, so they can remain competitive when recruiting and retaining workforce.

Takeaway

We believe this bill is one to watch because similar efforts could spring up in other states. Also, just because the bill is on hold until 2024 in California doesn’t mean other states aren’t working on similar legislation right now.

Now, there are obviously two sides to consider. Opponents, as we see above, say FAST will raise prices, eliminate jobs, and hurt families.

Proponents believe FAST will protect the health, safety, and welfare of fast-food workers. Additionally, the Fast Food Council could increase the minimum wage for fast food workers above California’s $15.50 minimum (effective January 1, 2023).

We’ll keep an eye on FAST over the next couple of years. Perhaps the coalition can work with California on a bill that protects fast food workers and doesn’t hurt operators and the communities they serve.

At any rate, FAST is down but certainly not yet out.

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by David Klemt David Klemt No Comments

$28.82 per Hour for NYC Delivery Workers?

$28.82 per Hour for NYC Delivery Workers?

by David Klemt

Delivery worker on bicycle on city street

In response to the New York City Council’s proposal of $23.82 per hour for delivery workers, some “deliveristas” are asking for more.

Now, before we proceed, no, this isn’t a re-run of an article from last week. This isn’t a case of déjà vu—it’s the evolution of a news story that’s developing rapidly.

So, how much more do delivery workers in NYC want? Well, they’re after a significant bump over the council’s minimum hourly wage proposal.

Requesting that the NYC Council more accurately account for deliverista expenses, some delivery workers are asking for $28.82 per hour.

Early last week, a group consisting of Los Deliveristas Unidos and the Worker’s Justice Project members came together. They gathered at New York City Hall to make their stance on the NYC Council’s minimum wage proposal.

As the deliveristas see it, an increase from $23.82 to $28.82 more accurately reflects their operating expenses. The argument is compelling when one considers costs beyond fuel.

Asking for More

After all, not every delivery worker in NYC (and other markets) uses a car, truck or SUV to make deliveries. That should explain the use of the term “delivery worker,” not “delivery driver.” Some deliveristas ride motorcycles, mopeds, or bicycles. I’m willing to bet some even use scooters, rollerblades, or skateboards.

Using any mode of transportation as a delivery worker comes with requirements, both legal and practical. For example, deliveristas must maintain insurance, maintain their transportation, and purchase and maintain safety equipment.

And yes, that safety equipment is crucial. According to some reports, around a third of NYC those who deliver on two wheels have been injured on the job. Tragically, 33 delivery workers have been killed since 2020. In fact, NYC says delivery workers have the highest injury rate.

Another interesting development may seem semantic. However, when one takes time to truly consider the point it’s rather poignant.

In asking for the proposal of $23.82 to rise by $5 by 2025, are asking for a living wage. Not minimum wage, as the proposal frames the hike, but a living wage.

One worker, Antonio Solís, as quoted by The City, a non-profit NYC news publication, explained: “We are asking the city to make a $5 adjustment, to go that extra mile to ensure we get to a living wage.”

A Request, not a Rejection

It’s also important to note that NYC’s delivery workers aren’t rejecting the council’s minimum wage proposal. Rather, the request is that the council considers updating their proposal ahead of a December 16 public hearing on the matter.

So far, companies like DoorDash, Grubhub, and Uber Eats haven’t released much in the way of statements. However, there have been reports quoting a handful of representatives. In pushing back against the proposal, they’ve mentioned increased costs; reduced deliveries; and the possibility of “locking out” deliveristas if delivery demand is low at a given time.

Should legislation go into effect after the public hearing, it’s likely we’ll see lawsuits from the delivery companies.

Image: Patrick Connor Klopf on Unsplash

by David Klemt David Klemt No Comments

$23.82 Minimum Wage for Delivery Workers?

$23.82 Minimum Wage for Delivery Workers in NYC?

by David Klemt

Red "New York" sign on building

With a public hearing on the docket for December 16, the New York City Council is proposing “fairer pay for delivery workers.”

The move is a year in the making. Last year, the NYC Council approved legislation with the goal of improving delivery worker pay and working conditions.

Now, the council is moving to increase minimum wage for the 60,000-plus delivery workers in the city.

At the risk of coming across as pessimistic, the legislation is likely to be unpopular with third-party delivery services. After all, when NYC and San Francisco passed laws to cap third-party delivery commissions, the big services filed lawsuits.

So, again, increasing the minimum wage for delivery workers in NYC will probably not go down well with companies like Uber, DoorDash, and Grubhub.

It’s possible we’ll find out before the end of this year. After the public hearing, the NYC Council will consider public comments. Then, the council could move forward and enact the legislation.

What’s in the Proposal?

Should the rule go into effect after the public hearing on December 16, minimum wage would rise to $17.87 per hour for third-party delivery workers. By April 1, 2025, that rate would increase to $23.82.

“This new proposed minimum pay rate would help ensure a fairer pay for delivery workers for third-party apps, providing more stability for 60,000 workers across our city,” says New York City Mayor Eric Adams.

According to reports, Brooklyn Borough President Antonio Reynoso is in favor of the legislation as well.

“It’s absolutely unacceptable that the restaurant delivery workers who provide for so many in this city are not justly compensated for their time, reimbursed for their expenses or provided essential benefits,” says Reynoso.

So, how did the council arrive at the $23.82 per hour figure? Well, we actually have that information:

  • $19.86, which matches standards set by the New York City Taxi and Limousine Commission for ride-hail drivers;
  • $2.26 for expenses delivery workers incur; and
  • $1.70 for worker’s compensation.

Why Legislate Delivery Worker Pay?

It appears the main reason is an incredibly simple one. In short, third-party delivery workers aren’t making minimum wage in NYC.

Per the Department of Consumer and Worker Protection (DCWP), delivery workers average less than the city’s $15 minimum wage. With tips, they’re averaging $14.18. And without tips? As one can imagine, the hourly rate plummets: $7.09 per hour.

According to the DCWP, the average hourly expense a delivery worker incurs is $3.06. So, that drives their hourly pay to $11.12 with tips, $4.03 without.

In an argument likely to be cited in any lawsuit filed by DoorDash (or at least shared in a public statement), the company claims its delivery workers make almost $29 per hour.

Clearly, there’s a discrepancy somewhere. Either delivery drivers are woefully underpaid for the service they provide or multiple researchers are misinterpreting hourly pay data.

Several sources have cited a statement made by a DoorDash representative about the NYC Council’s proposal:

“Dashing allows so many across New York City to earn when, where and how often they choose,” says the rep. “Unfortunately, the proposed rule does not appropriately account for this flexibility or that Dashers are able to choose which deliveries they accept or reject.”

Their statement continues, addressing a possible rise in costs and drop in orders:

“Failing to address this could significantly increase the costs of delivery, reducing orders for local businesses and harming the very delivery workers it intends to support.”

Why Should I Care if I Don’t Operate in New York City?

We’ll see—quickly, apparently—if this proposal becomes law. Should that happen, there’s reason to assume similar proposals will pop up in other cities and states.

We’ll also see whether or not third-party delivery companies file lawsuits in response. They’ve done so for commission caps, after all.

At any rate, this is one to watch. Similar legislation could be coming to your market.

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by David Klemt David Klemt No Comments

Tipping is on the Ballot in Washington, DC

Tipping is on the Ballot in Washington, DC

by David Klemt

Folded dollar bills

Out of concern that people who work for tips aren’t making minimum wage in Washington, DC, Initiative 82 is on the ballot.

This is interesting for several reasons. One of which is the fact this isn’t the first time this issue has been voted on in DC.

Back in 2018, Initiative 77 was presented to Washington, DC, voters. The initiative took the $3.33 per hour minimum wage for tipped workers up to $15 per hour, the full minimum wage.

In June 2018, the measure was approved by voters. However, the Washington, DC, Council held a vote and repealed Initiative 77 after if had been passed.

Phil Mendelson (D-Chairman) of the Washington, DC, Council, introduced the bill that ultimately repealed Initiative 77 in October 2018.

“The Council amends laws all the time. And if a law is a bad law it should be amended or repealed,” said Mendelson at the time. “It doesn’t matter if the law was adopted by Congress, the voters, or ourselves.”

Further, Mendelson claimed that tipped workers themselves—bartenders, servers, valets, manicurists, and more—didn’t hold a favorable view of the passing of the initiative.

“77 may be well-intentioned, but the very people the Initiative is intended to help are overwhelmingly opposed. If we want to help workers – protect them from harassment and exploitation – there are better ways than Initiative 77,” Mendelson said.

One council member, Mary Cheh (D-Ward 3), opposed repealing Initiative 77 and addressed claims that it was harmful to tipped workers.

“Although I take these claims seriously, in my view they are speculative and not borne out by the experience of the other jurisdictions that have one wage,” said Cheh.

Support

Whenever increasing tipped worker wages to full minimum wage comes up, we tend to encounter the same arguments for and against.

Currently, the tipped hourly wage in DC is $5.35 per hour. In comparison, full minimum wage in DC is $16.10 per hour.

Now, as the law reads, if a tipped worker’s wages don’t equate to full minimum wage, their employer is expected to bridge the gap.

The key argument for the passing of Initiative 82 is simple: tipped workers should make at least minimum wage. These workers deserve the stability of knowing how much they’ll make each shift and earning a living wage (consistently, hopefully).

Those who support Initiative 82 also say that since the measure doesn’t outlaw tipping, tipped workers would earn more than minimum wage.

Opposition

Opponents, however, argue that the initiative will harm tipped workers. Some say that operators will cut shifts and increase prices in response to Initiative 82 passing. This will, of course, lead to servers, bartenders, and other tipped workers making much less than they did in the past.

Traffic may also decrease because it’s assumed that operators will increase costs significantly.

There’s also the argument that’s often (if not always) made when this topic comes up: Tipped workers themselves don’t support these initiatives.

“I have not met a single server who wants this,” Washington, DC, bar owner David Perruzza told the Washington Blade. Perruzza added, “The people who support this don’t know anything about the service industry.”

A Few Questions…

I’ve made no secret of my cynicism when it comes to politicians and their relationships with our industry.

My main argument was made for me: the Restaurant Revitalization Fund saga. We watched for months as Congress failed to replenish the RRF, leaving more than 177,000 operators and their staffs to fend for themselves. This, after months of dangling replenishment in front of all of us. Ultimately, they abandoned us.

Tellingly, Senator Rand Paul (R-KY) referred to RRF replenishment as a “bailout.” And apparently he doesn’t think much of the challenges operators have faced since the start of the pandemic, asking, “Where’s the emergency?” The closures of tens of thousands of restaurants and bars, often the cornerstones of communities across the country, doesn’t rank as an emergency, apparently.

So, Initiative 77, Initiative 82, and similar measures beg a few questions:

  • Do politicians actually ask their tipped-wage constituents their thoughts on this topic before introducing these ballot measures?
  • When these initiatives are being considered, do people just ask a few operator friends their opinions?
  • Do local, state, and federal politicians really have a grasp of our industry?

One thing is certain: Industry eyes across the country are on Initiative 82. If it passes, we can likely expect similar measures to be introduced in cities and states. Should it fail, it may be a while before another jurisdiction sees this type of initiative again.

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by David Klemt David Klemt No Comments

Cali Chains Move Quickly to Kill FAST

California Chains Move Quickly to Kill FAST

by David Klemt

Huge pile of cash

If recent reporting is accurate, fast food chains with locations in California are fighting the Fast Food Accountability and Standards Recovery Act.

Several well-known restaurant chains have reportedly already dumped well over $10 million into a ballot drive effort. Among the chains lobbying to kill the bill are In N Out, McDonald’s, Wendy’s, and Chipotle.

In other words, the group of chains aiming to defeat AB-257 in California have very deep pockets. These heavy hitters are reaching deep to contribute millions of dollars to Save Local Restaurants, the coalition responsible for starting the ballot initiative.

And who are the Save Local Restaurants coalition members? The National Restaurant Association (NRA), US Chamber of Commerce (USCC), and International Franchise Association (IFA).

What is AB-257?

The Fast Food Accountability and Standards Recovery Act, also known as the FAST Act, is a California bill. Enacted on September 5 of this year, FAST amends a section of the state’s labor code that relates to food facilities and employment.

Click here to review the bill’s text in its entirety.

To summarize, FAST does the following:

  • Establishes the Fast Food Council, ten members appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee. The council will operate until January 1, 2029.
  • Defines “the characteristics of a fast food restaurant.”
  • Gives the Fast Food Council the authority to set “minimum fast food restaurant employment standards, including standards on wages, working conditions, and training.”
  • Provides the council the power to “issue, amend, and repeal any other rules and regulations, as necessary.”
  • Allows the formation of a Local Fast Food Council by a county, or a city that has a population of more than 200,000.

It’s that third bullet point that likely stands out the most to chain operators. On January 1, 2023, California’s minimum wage increases to $15.50 an hour. If the Save Local Restaurants ballot initiative fails, the Fast Food Council could boost the minimum wage to $22 per hour right after we all yell, “Happy New Year!”

Proponents say the bill protects the health, safety, and welfare of fast-food workers. Opponents call it radical.

Fighting FAST

According to Save Local Restaurants, it’s not just chains that want to kill FAST:

“The FAST Act is opposed by small and family-owned businesses, minority-rights groups, workers, consumers, your favorite restaurants, taxpayers and community-based organizations,” reads their website.

Among their reasons for attempting to kill the bill are:

  • a resulting increase in the price of food;
  • the elimination of thousands of jobs in California;
  • an increase in the cost of living in the state; and
  • the millions of dollars the coalition claims the bill will cost California taxpayers annually.

Reportedly, full-service restaurant operators also oppose FAST. The reason is simple: If the Fast Food Council hikes fast-food worker minimum hourly wages significantly, FSRs will struggle to compete. FSR operators will have to hike menu item prices further, a situation that’s growing untenable as consumers balk at paying more at restaurants.

Then, there’s the fact that bills similar to FAST could pass in other states. So, chains are contributing millions to see that the Save Local Restaurants ballot initiative succeeds.

Should the effort be successful, FAST will be included on California’s 2024 ballot. That means it will be suspended until 2024 and be in the hands of the voters.

Image: Tima Miroshnichenko via Pexels

by David Klemt David Klemt No Comments

Infographic: NRA Raise the Wage Survey

Infographic: NRA Raise the Wage Survey

by David Klemt

The results of a survey conducted by the National Restaurant Association to gauge operator reaction to the Raise the Wage Act are in.

Per the NRA’s infographic detailing the participant responses, there’s not much support for increasing the federal minimum wage and eliminating the tip credit.

What’s in the Raise the Wage Act?

If signed into law, the Raise the Wage Act will represent significant change for employers and employees.

The federal minimum wage will be raised incrementally to $15 by 2025. Two years later, in 2027, the tipped wage will be eliminated.

Survey Results

The NRA surveyed 2,000 restaurant operators between February 2 and 9. Respondents are clearly opposed to the Raise the Wage Act.

National Restaurant Association Raise the Wage infographic

What Does This Mean?

A vast majority of survey respondents—along with the NRA—definitely view the bill as a threat to the industry. An email sent by the NRA’s executive vice president of public affairs, Sean Kennedy, includes this succinct statement:

“These results make one point crystal clear—after seeing over 110,000 restaurants close and over 2.5 million jobs lost, increasing labor costs is going to make it more likely that more operators close their doors and lay off their staff. Tipped servers will lose with the end of a system that allows them to make $19-$25 an hour in tips under the current tip credit system.”

To the best of my knowledge, the NRA has not yet conducted a targeted survey of restaurant workers for their opinions of a $15 federal minimum wage and the elimination of the tax credit.

However, fast-food workers from McDonald’s and other chains have gone on strike in at least 15 cities in the United States to demand a raise to $15 per hour. That speaks volumes for how foodservice workers who aren’t typically tipped feel about the Raise the Wage Act.

What’s Next?

According to the NRA, the bill is slated to be fast-tracked and voted on in just a few weeks.

Agree that the Raise the Wage Act is going to hurt operators, workers and the industry? Click here to let Congress know.

Want Congress to pass the bill? Click here to find your representatives and let them know.

Infographic: National Restaurant Association

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by krghospitality krghospitality No Comments

National Restaurant Association Opposes Elimination of Tip Credit

National Restaurant Association Opposes Elimination of Tip Credit

by David Klemt

Citing a 600-percent increase in labor costs, the National Restaurant Association opposes the elimination of the tip credit.

An email sent out yesterday by NRA executive vice president of public affairs, Sean Kennedy, stated that doing away with the credit would present “an impossible challenge to restaurant owners” to remain open.

The email also opposes boosting the national minimum wage to $15 per hour.

Not every operation would see labor costs potentially skyrocket to untenable levels but wage changes could see restaurants, bars and other businesses in some states hit the cited 600-percent increase. If the majority of restaurant operators saw sales decline last month, as a previous NRA report said operators predicted, and that trend continues, the association’s standpoint could be proven right.

While the NRA continues its support for making the RESTAURANTS Act part of any new stimulus relief bill, the association has made their positions on the matter of a minimum wage hike and elimination of the tip credit clear:

“But now is not the time to insert wage changes–a hike in the minimum wage and elimination of the tip credit–to a stimulus bill. Tipped servers generally earn between $19-$25 dollars per hour, and this plan would punish these workers who use restaurant jobs to make a better life for themselves.”

The NRA appears concerned that the Biden administration’s efforts to quickly get Congress to pass a Covid-19 relief bill are short-sighted and will end up hurting tipped workers and the hospitality industry overall.

According to the message sent out yesterday, the majority of tipped workers across the country have, historically, opposed efforts to eliminate the tip credit. Per the NRA, tipped workers earn between $19 to $25 per hour when the tip credit remains intact.

Instead, the NRA prefers the next stimulus relief bill–there are currently two competing bills, one for $1.9 trillion plan and a GOP counterplan with a price tag of around $600 billion–to go with the Senate version of the RESTAURANTS Act.

If you agree with the NRA’s concerns, click here to take action.

Image: Mathieu Turle on Unsplash

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