Government Affairs

AKFCF NE and SoCal Minimum Wage Update:

Minimum wage increases at the state-level have been on the docket for many state legislatures in the Northeast as well as in California this past session. Below is an updated from Yum! about the various minimum wage discussions in various states in play across the country.

As for the other regions, minimum wage has been pretty quiet at the state-level. However, we will keep the AKFCF updated on any changes in the upcoming year as the various state legislatures come back into session.

Northeast Minimum Wage Update

  • Delaware - did not pass any minimum wage bills this year. They considered a fairly moderate increase, however, it did not pass.
  • Connecticut – Sen. Republicans held on all labor issues resulting in no minimum wage legislation this year
  • Vermont – They did pass a $15/min bill earlier this year, but Governor Scott vetoed it late yesterday afternoon.
  • Road Island – We are continued to be dumbfounded by this state. The Democrats have majority, but the minimum wage bill didn’t pass this year. There is a possibility they get called back into special session late in the year to discuss state budget issues and it may come up again – but not likely.
  • Massachusetts – MA is in session virtually year round, so there’s a few underlying issues with this state. They would like to put $15 minimum wage on a ballot initiative. If they succeed in creating a ballot initiative, then $15 minimum wage will pass. The legislature is considering trying to take legislative action instead of having it on the ballot. Legislation could override the ballot initiative. Our goal would be to do $15/minimum slowly and phase it over a longer period of time instead of all at once. There is a high likelihood of seeing $15/minimum in MA over the next few months.
  • New York – The Governor mandated a fast food minimum wage a few years ago. The state legislature then passed their own $15 minimum wage for the whole state. At some point, everyone is going to get to a $15/minimum through a phase-in process. The challenge is the fast food wage gets to $15/minimum more quickly than the rest of the state and it’s created a bit of a competitive imbalance.  We are trying to get the two blended together.
  • New Jersey – It has been relatively quiet on minimum wage front and we are stunned by that. Governor Murphy had signaled it was his priority #1. There is some disagreement internally with Democrats in NJ about: 1. Is $15/minimum the appropriate number (the Senate President thinks it should be lower) and 2. How quickly the $15/minimum gets phased in.

Southern California

California passed a $15/minimum a few years ago, currently it is getting phased in – we are not all the way to $15 yet. The good news is that it was not discriminatory like in New York in that the $15/minimum will be phased in at the same rate across the board.

With respect to other CA bills, it’s been pretty quiet on scheduling front. They haven’t pushed aggressively on scheduling this year. Governor Brown is terming out and we’re likely to get progressive Democrat governor next year in Sacramento, which isn’t good news for the AKFCF. Right now, we’re in the calm before the storm. 

Scheduling Update

No states are passing scheduling legislation this year. Oregon was the first state to pass it last year. A few other states are kicking the idea around – however, nothing to pass this year.

Chicago and Philadelphia may be doing local scheduling issues, but nothing state-wide.

If you have questions or additional concerns, please contact your AKFCF GAC representative.

2018 AKFCF GAC Convention Update

The Government Affairs Committee had the pleasure of presenting to the AKFCF at the Townhall hosted on Saturday, February 24th in Anaheim, California.

During the presentation, Peg Duenow and Mary Donohue gave a comprehensive Government Affairs update to franchisees that covered pertinent issues on Capitol Hill.

Tax Reform: Tax reform was a major priority for Republican Leadership in this Congress. When the House tax bill was introduced, the original language was particularly problematic for franchisees registered as pass-through entities. We used KFC franchisee data to construct scenarios for legislators that outlined the effects that the original language could have had on franchise businesses.  When the numbers came back negative, we worked to distribute them to high-ranking Members of Congress. Through these examples, we were able to jump start the conversation about small business and turn the pass-through portion of the tax bill in our favor.

Joint Employer: In the recent months, there has been a flurry of activity surrounding the issue. First, on November 7th the U.S. House of Representatives passed H.R.3441 the Save Local Business Act by a roll call vote of 242-181. The bill would return the definition of a joint employer “direct and immediate control”.

Second, on December 14th, 2017 the NLRB reversed the 2015 decision to redefine the terms of a joint employer and returned to the original definition of “direct and immediate control”. In a 3-2 decision by the board’s conservative majority, they ruled that to be classified as a “joint employer”, jointly liable for labor violations, a business must have a direct and immediate connection to the employees in question.  However, this good news was fleeting.   On February 26th, the NLRB vacated their previous decision from December of 2017 and reverted to the Obama-era definition of a joint employer to “indirect and potential control”.

Overtime: The Final Obama Administration overtime rule was blocked by a preliminary injunction on November 22nd, 2016. A U.S. District Court granted summary judgement to the plaintiffs and declared the Final Rule invalid on August 31, 2017.

The DOL under the Trump Administration issued a Request for Information (RFI) on July 26th, 2017 in support of a new proposed overtime rule. The RFI was answered by businesses and business owners. Their responses included parameters about updating the salary threshold and what the appropriate bases for setting an updated standard should be and what businesses can afford.  The DOL received more than 140,000 comments before the comment period closed on September 15th, 2017. Likely, the DOL will make its position known sometime in 2018 and disclose the updated increase to the overtime threshold.

Renewable Fuel Standard: Under the Trump Administration, we’ve seen a slowing in our efforts to quell the RFS. President Trump was a vocal supporter of the RFS during his campaign, and we’re still attempting to see how he would respond to legislation to quell the program.  We’ve taken the approach amongst our coalitions involved with the RFS to strategically message Members who are undecided on the issue in hopes of gaining more support for the reversal of this program down the road.

Donate to the PAC: Contributing to the AKFCF PAC is the best way to support the election and reelection committees of pro-business Members of Congress who share the same concerns as franchisees. The money raised in the PAC goes directly to Members of Congress.  You may make your 2017 AKFCF PAC donation online by visiting our portal on the AKFCF website. Please click here to contribute.

For more information, please contact your regional GAC representative or Mary Donohue of Polaris Consulting, LLC (mdonohue@polariswdc.com).

News of the week ...

McDonald's Agrees to Settle Significant Labor Case

https://www.qsrmagazine.com/legal/mcdonalds-agrees-settle-significant-labor-case

  • Is McDonald's a joint employer of franchisees? That still isn't quite clear.

LEGAL MARCH 2018 BY DANNY KLEIN

McDonald's workers claim they were fired for fighting for higher wages.

In a case closely monitored by restaurant franchise companies around the country, McDonald’s and the National Labor Relations Board asked an agency judge to approve the settlement of a trial that was set to resume Monday (March 19) after a two-month delay.

According to Reuters, a source said the company agreed to settle the labor board case, intended to determine whether McDonald’s should be held accountable for its franchisees’ alleged labor law violations. While a NLRB judge still must approve it, this ruling would keep McDonald’s from being treated as a “joint employer” of workers at McDonald’s franchises, and, in turn, held liable for the illegal labor actions of franchisees.

The trail comes from claims made by employees of a McDonald’s franchisees who said they were fired for joining a national effort to fight for $15 hourly wages, also known as the “Fight for $15” movement. Democratic Senator Elizabeth Warren joined attorneys for the union-backed Fast Food Workers Organizing Committee Saturday in accusing the board’s general counsel, Peter Robb, of rushing to settle the case in favor of McDonald’s, according to Bloomberg.

In a motion filed Monday by a McDonald’s attorney, the company said: “A settlement that provides full relief on all the substantive unfair labor practice charges at issue in this case, and that avoids years of additional litigation that would otherwise delay whatever relief is ultimately determined, is more than reasonable.”

Some groups have warned that a ruling against McDonald’s in this case could disrupt the franchising industry by showing that franchisors could be sued and thus required to bargain with unions representing franchise workers.

According to Reuters, Robb and McDonald’s presented the settlement to an administrative judge at a hearing in New York City.

The issue stems to 2012, when Fight for $15 filed claims on behalf of McDonald’s workers, saying employees across the country were fired for protesting for a higher wage. The trial began in 2016 and was paused in January so President Donald Trump-appointed Robb could begin pursing a settlement. The issue being whether McDonald’s had enough control over its franchisees to be considered a “joint employer.” This settlement, Bloomberg said, does not include a determination that McDonald’s is a “joint employer” of the workers.

Micah Wissinger, an attorney for the Fast Food Workers Organizing Committee, is expected to object to the settlement.

This adds another chapter to the ongoing “joint employer” saga. On February 26, the NLRB unanimously vacated its December Hy-Brand ruling, meaning restaurant operators around the nation will once again be subject to the 2015 Browning-Ferris test for determining joint employment.

The NLRB did so following an inspector general report that said board member Bill Emanuel should have recused himself from voting in the case. The ruling reverts, at least for now, to the Obama-era precedent stemming from the Hy-Brand Industrial Contractors, Ltd. decision, which dramatically narrowed the situations where the joint employer doctrine could be applied. Read more about the reversal here.

 

Your AKFCF Government Affairs Committee

Peg Duenow - Chair

Ray Aley - Vice-Chair

Gene Duenow - Secretary

Dale Black - Treasurer

Lesley Hottinger - Representative GL

Leslie Sharp - Representative SE

Jim Waters - Representative NE

Joe Adams - Representative UMW

Franklyn Nye - Representative SW

Brett Harris - Representative NW

Shahid Chaudhry - Representative SOC

Bryan Robinson - EC Liaison

Wiley Dean - At Large

Jamie Jackson - Harman's (at large)

Click on the name to contact your GAC Representative via email.


Click the American Flag Below to Make your 2017 Political Action Committee (PAC) Contribution!

Questions?  Contact Ray Aley

(802) 318-4705