COVID-19
Restaurant Revitalization Fund – The Small Business Administration (SBA) alerted an additional pool of applicants that their grants have been canceled as a result of pending litigation asserting that racial, gender, and other types of loan prioritization were discriminatory. Last week, the agency halted payments for nearly 3,000 applicants pending the outcome of lawsuits in Texas and Tennessee that seek to bar the SBA from distributing grants on the basis of race and sex. More details.
Paycheck Protection – The Iowa governor signed conforming tax legislation aligning the state with federal tax law on a number of fronts but most importantly for operators, removing forgiven PPP and EIDL loans from counting as taxable income. Similar legislation is pending in Minnesota. More details.
Liability – South Carolina’s governor signed legislation making the state the latest to provide businesses with COVID-related legal protection. More details.
Chicago, IL – A vote on the mayor’s pandemic relief package was delayed at the city council after a contentious debate over her proposal to enact a 10:00 PM liquor sales curfew. A new curfew of 12:00 AM was negotiated and the bill is poised to clear its first vote today. Included in the package are a number of provisions: a requirement that third-party delivery services collect and remit Chicago’s restaurant tax and extending the 15 percent cap on delivery fees until 180 days after all pandemic-related restrictions on restaurants are repealed; an authorization on both delivery and carryout of cocktails-to-go; a shortening of the time it takes for new restaurants to get licenses to open in spaces occupied by previously shuttered establishments, and; relaxing restrictions on sidewalk sandwich boards and overhauling licensing and permitting to make it easier for restaurants to open. More details.
McDonald’s -Numerous locations in California are partnering with the state health department to give out free vaccines with a free menu item for those who get their shot. Over 70 locations in the state are participating and no appointments or health insurance is required. More details.
Federal
Infrastructure Package – The White House and a group of centrist U.S. Senators reached a tentative agreement on a compromise infrastructure investment package. From an industry perspective, many of the key issues were removed from the package, most notably significant funding for childcare, a federal paid leave program, and any increase in corporate taxes. House Democrats announced they will link a second legislative package that includes those items to the Senate’s more narrow approach. Debate over these items is likely to spill into late fall. More details.
Wages
Labor Department – The agency issued a proposed rulemaking that would scale back the circumstances under which an employer may pay a lower minimum wage to workers who earn tips. The proposal would require an employer paying a standard minimum wage to workers who spend more than 30 minutes of uninterrupted time on side tasks that “directly support” tip-producing activity, effectively reinstating the old “80/20 rule” with the addition of the 30-minute cap. Under the rule, an employer would lose the tip credit if a tipped employee spends more than 20 percent of their weekly hours performing work that “directly supports” tip-producing work (but is not tip-producing itself). The comment period is 60 days from the date of the publication or on or before Aug. 23, 2021. More details.
Labor Department – The agency is close to public release of its proposal to require federal contractors to pay workers at least $15/hr. The proposal is currently in the approval process at the White House’s Office of Information & Regulatory Affairs, the last stop before agency publication. Brands with outlets in airports, national parks, museums, and military bases among others could be affected. More details.
Tucson, AZ – Proponents of a local ballot initiative to raise the city’s minimum wage to $15/hr by 2025 announced they have secured 20,000 signatures. The group needs 27,000 valid signatures to qualify for the Nov. 2021 ballot. More details.
Washington, DC – Initial paperwork was filed with the city to place an initiative on the 2022 ballot. Similar to the 2018 ballot that passed with 55 percent of the vote, this measure would raise the base minimum wage for tipped employees from the current rate of about $5 per hour to the city’s standard minimum wage, which will increase from $15 to $15.20 an hour July 1. The increases for tipped employees would come in steps, beginning in 2023 and would eventually eliminate the tip credit by 2027. The D.C. Board of Elections will have two months to approve the initiative before organizers can begin circulating a petition. They will then have 180 days to collect about 26,000 valid signatures before March to place the initiative on the June 2022 primary ballot. The 2018 ballot measure was ultimately repealed by the city council in an 8-5 vote but three of those members voting to repeal have since been replaced on the council. More details.
Labor Policy
NLRB – President Biden nominated David Prouty, the general counsel of SEIU Local 32BJ (New York City) to fill the seat of Republican member William Emanuel. Emmanuel was nominated by former President Trump in 2016. His term expires in Aug. When Prouty is seated, Democrats will have a 3-2 majority on the Board. Prouty has served as general counsel of the Major League Baseball Players Association and UNITE HERE and was a member of the NLRB’s union advisory panel from 1997 to 1998. More details.
U.S. House – By a 247-178 vote, the house passed the Protecting Workers Against Discrimination Act, legislation which if passed will, among other things, make it easier for workers to prove they are victims of age discrimination in the workplace. Despite a number of Republican votes, the bill faces a much tougher road ahead in the senate. More details.
Massachusetts -A new coalition of labor and civil rights activists announced their intention to pursue a 2022 ballot initiative to clarify that gig workers should be treated as employees and entitled to traditional worker benefits and protections. The announcement comes in response to similar threats by rideshare and delivery platform companies, which have threatened to do in Massachusetts what they did in California – go to the ballot to maintain their current independent contractor status for drivers. Massachusetts is shaping up to be the latest battleground in the ongoing debate over classification of this subset of workers. More details.
Delivery
San Francisco, CA – The board of supervisors unanimously voted to make the city the first in the country to permanently cap delivery fees at 15 percent. There are other amendments to the law still to be hashed out before going to the mayor’s desk – most notably delivery apps may still be allowed to charge restaurants more for “marketing” and “additional services,” something that DoorDash has been testing. More details.
Alcohol
New York – The governor ended his declared state of emergency. With it, many of the executive orders designed to protect and bolster the industry also ended, namely the takeout and delivery of alcohol for restaurants. Pending legislation to make those rules permanent has languished. More details.
Colorado – The governor signed legislation extending until 2025 takeout and home delivery of beer, wine, and cocktails. The new law will restrict to-go drinks from 7 AM. to midnight every day, and limit each order to one liter of spirits, two bottles of wine, and two six-packs of beer. It also allows for restaurants to continue serving drinks in communal outdoor dining areas if their local governments approve them. More details.
Rhode Island – Senate-approved legislation passed the house extending beer, wine, and cocktails to-go until March of 2022. The bill is on its way to the governor for his expected signature. More details.
Packaging
Florida – The governor signed legislation requiring the Department of Environmental Protection to review and update the department’s 2010 Retail Bags Report. The agency’s conclusions and recommendations are due to the legislature by Dec. 31, 2021. Until the report is concluded, the new law prohibits local governments from restricting, banning, or taxing auxiliary containers, wrappings, or disposable plastic bags.
Oregon – The senate narrowly passed legislation creating a producer responsibility program for packaging and food service ware. Under the program, producers would be responsible for a portion of the costs of recycling their products. Fees would be set by producer responsibility organizations, not by the state Department of Environmental Quality. The bill has advanced out of one committee stop in the house. More details.
Misc.
Maine – Legislation has passed both chambers of the legislature establishing a California-like Private Attorney General Act law (PAGA). If passed, the law would permit workers alleging violations of certain labor laws – including wage and hour violations – to bring private enforcement in the name of the state after providing notice to the state attorney general, state labor department, or the Maine Human Rights Commission. While aggrieved workers in California must take action themselves under PAGA, Maine’s version allows advocacy groups and other organizations to sue on behalf of workers. Maine’s attorney general, a Democrat, argued against the bill because of fears it would interfere with the attorney general’s ability to ensure litigation is consistent with his office’s position in other cases. Procedurally, the bill has to return to both chambers for additional action and then will go to the governor’s desk. More details.
Key Takeaways
- This week, the U.S. Supreme Court struck down a nearly fifty-year old California law that required employers to provide property access to farmworker union organizers. The ruling does not directly impact the retail community but the conservative court’s decision is likely to further incentivize legal challenges to other areas of labor and employment law, and provide some backstop to overreach. That said, the impact to the industry may not be limited to the arena of labor law, and may not always result in positive outcomes. The lawsuits that have halted the RRF program are part of a larger campaign to challenge the Biden Administration policies on multiple fronts, banking on conservative jurists.
- The beginning of July is often when wage and benefit mandates go into effect, or automatically increase. Compliance teams should be prepared for new requirements and related enforcement actions in certain jurisdictions. Of note, the New York City “just cause” mandate will go into effect July 4 and concerns around employer compliance should extend beyond meeting the legal requirements under the new law. Expect unions to use the new law to advance corporate campaigns.
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, SoundCloud, iTunes and Spotify.