Bloomberg Law
Free Newsletter Sign Up
Login
BROWSE
Bloomberg Law
Welcome
Login
Advanced Search Go
Free Newsletter Sign Up

Tip Credits, CROWN Act, Pay Transparency on States’ 2023 Agendas

Jan. 11, 2023, 10:05 AM

State lawmakers are poised to consider additional workplace protections in 2023, as labor advocates look to fill the policy vacuum created by a divided Congress and to address worker challenges exacerbated by Covid-19.

Minimum wages, pay equity, sexual harassment, and paid leave will feature among the bevy of employment-policy proposals up for debate this year in statehouses, several of which open their 2023 sessions this week.

“Labor is really going to push hard in blue states,” said Tim Goodrich, vice president of state government relations at the National Federation of Independent Business, which advocates for small businesses and opposes expansion of workplace mandates such as minimum wages and paid leave. “Nothing is going to happen in D.C. over the next couple of years.”

Part of the momentum will come from statehouses that saw significant blue gains in November’s elections.

Michigan and Minnesota will be key to watch, as Democrats have gained majority control in both chambers of each state’s legislature for the first time in years.

In Michigan, labor leaders have made clear they will try to boost unions by repealing the state’s anti-union “right to work” law. Michigan is one of 27 states with such a law, which bans mandatory union membership as a condition of employment. States rarely repeal the measures.

Business groups argue a repeal in Michigan would hurt the state’s ability to attract companies and create jobs, but labor backers counter that companies picking a state for its right-to-work policy would tend to create low-paying jobs with minimal benefits.

“The one that we’re most worried about in Michigan is an attempt at a right-to-work repeal,” Goodrich said, noting the law marks its 10th anniversary this year. “Hopefully we’re not attending its funeral.”

Minnesota legislative leaders and Gov. Tim Walz (D) have declared enacting a paid family and medical leave program to be a top priority. Paid leave laws are poised for expansion in the year ahead, potentially in Maine, Michigan, and New Mexico, as Congress continually fails to pass leave legislation.

Wages and Hours

Proposals to phase out tip credit laws are among the worker- and union-led efforts gaining steam in state legislatures.

Similar to the voter-approved Initiative 82 in Washington, D.C. last November, these proposals would require restaurants and other employers of tipped workers to pay them the full local minimum wage in addition to any tips they receive from customers. Federal law lets employers pay tipped workers as little as $2.13 per hour before tips, if no state or local law sets a higher bar.

“We know when a tipped worker has to rely on tips for their pay that really leaves them incredibly vulnerable economically and also vulnerable to harassment,” said Andrea Johnson, state policy director for the National Women’s Law Center. She said NWLC heard “reports of disgusting behavior” during the pandemic, such as customers asking a server to pull down her mask so they could see how much they should tip her.

But business groups including the National Restaurant Association have long fought against efforts to end tip credit laws, including the recent D.C. ballot measure. They argue that doing it now while restaurants are recovering from the pandemic’s economic impacts could force them to cut workers’ hours or even to shut down.

As a neighbor to D.C. with a Democratic-majority legislature, Maryland is a good candidate for ending its subminimum wage for tipped workers, Johnson said.

Likewise, advocates are targeting New York state to end its tipped minimum for restaurant workers, after the state previously addressed the policy for tipped workers in other industries, according to Paul Sonn, state policy program director at the National Employment Law Project.

Aside from tipped minimum wages, Sonn said there’s momentum for increasing standard minimum wages too, even in states that previously passed $15 wage laws, such as New York. Lawmakers there are considering a bill that would raise the minimum wage to $21 and link future annual increases to inflation.

“With the highest inflation in years squeezing families, workers are saying they need much more than $15 an hour and they’re pushing states to act,” he said, noting Hawaii’s passage of a law last year to phase in an $18 minimum wage.

Workplace lawyers also are closely watching for the spread of pay transparency laws, similar to those passed last year in California, New York, and Washington, which require salary ranges be included in job postings.

Maryland lawmakers are expected to introduce a similar salary disclosure bill this year, Johnson said. Massachusetts is a likely candidate too, she added, given its history of equal pay legislation.

“One of the biggest efforts we’ll see across the country this year is around pay range transparency,” she said.

Anti-Bias, #MeToo Measures

State lawmakers also will consider expansions of anti-discrimination laws, such as protections against workplace bias for people with traditionally Black hairstyles or textures.

At least 18 states have enacted some version of the CROWN Act—including Louisiana and Massachusetts last year—which adds race-related hairstyles and textures to the characteristics shielded against racial bias at work. In its first week of the 2023 session, the Minnesota House advanced a similar bill through committee, teeing it up for a House floor vote.

Workers who use cannabis outside of work also could see further state-law protections enacted this year, similar to a law enacted in California in 2022.

California became the seventh state with a law protecting workers from being fired for off-the-clock cannabis use, as long as they’re not coming to work impaired. Another 15 states provide some level of legal protection for workers who use marijuana for medical reasons.

Washington state’s legislature is among those considering cannabis-user protections in the workplace, with a bill that got its initial public hearing Jan. 10. Massachusetts also considered similar legislation in 2022 that could be reintroduced for 2023.

Proposals aimed at workplace sexual harassment also continue to advance five years after the #MeToo movement put a spotlight on the issue.

These include proposals to limit employers’ use of non-disclosure agreements, similar to a federal law passed in 2022. Several states have passed restrictions covering a broader range of NDAs, according to Johnson.

California and Maine have banned employers from imposing NDAs related to any form of workplace harassment and discrimination, and Washington last year enacted an even broader law banning NDAs related to claims of wage-and-hour violations too.

States also are increasingly tackling the definition of illegal harassment, moving away from the traditional standard of requiring plaintiffs to show “severe and pervasive” misbehavior by bosses or coworkers, a standard that Johnson said only covers the most egregious cases.

Maryland and D.C. passed legislation last year to relax the standard of what plaintiffs must prove, as California and New York have done in prior sessions.

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloombergindustry.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Genevieve Douglas at gdouglas@bloomberglaw.com