2022 is upon us, and there is a lot of activity in Washington, D.C. The rise of Omicron put new pressures on the restaurant industry, and it is an important backdrop against the National Restaurant Association’s efforts in Congress, regulatory agencies, and the courts. Here is a quick update:
Holiday Media Highlights Restaurant Challenges - Need for RRF Replenishment
While Congress was home for the holidays, the LRA along with the NRA used the time to obtain greater local press coverage of the unique challenges facing our industry and tie it to the need for replenishing the Restaurant Revitalization Fund (RRF). Sean Kennedy recently appeared on Fox News to highlight the unique challenges of Omicron for us, which you can watch here.
The media campaign is working, and policymakers in our nation’s capital continue to raise the need to replenish RRF. We need more Republican support, but we also need Democrats to work with the GOP on how best to fund an RRF replenishment. Do not be discouraged by the ups and downs in media reports on how our efforts are faring. Every large legislative effort has fits and starts - we just need to stay focused on not stopping our advocacy efforts.
Department of Labor “Dual Jobs” Final Rule Impact on Tip-Credit Employers
On Dec. 28, the Labor Department’s new “Dual Jobs” final rule went into effect for tipped employees of restaurants. Under the new regulations, the Labor Department takes the position that employers may only take a tip credit for “tip producing work” and tasks that “directly support” tip producing work, provided that the directly supporting tasks are not performed for a “substantial amount of time.” As to what constitutes a “substantial amount of time,” the Labor Department proposes to use an “80/20” percentage of hours limitation and a continuous 30-minutes limitation. Some tasks that used to be considered duties of a tipped employees, like wiping tables by a waiter after a customer departs, will not be considered “tip producing work.”
If this sounds hopelessly confusing for you and your team, it’s because it is. The Labor Department exceeded its authority in releasing the final rule, and its impact will be a definite net-negative for our industry. The Restaurant Law Center filed a lawsuit in federal court challenging the final rule and asked the Court to suspend the final rule’s implementation while the litigation is ongoing. We expect to appear in court early next month and will keep you updated. You can read our arguments against the rule here.
Supreme Court to Decide Fate of OSHA Vax/Testing Mandate
Today, the Supreme Court of the United States will hear arguments regarding challenges to the Biden Administration’s mandate for vaccination/weekly testing of 100+ employers. The rule is set to be implemented starting this Monday, Jan. 10, with enforcement to begin on Wednesday, Feb. 9.
If we were to make a prediction, we feel the Court is unlikely to make a broad ruling on the constitutionality of the mandate, as it has not been extensively considered at the lower court level. As a result, we’d predict the Court will further delay the start date for the mandate and send the case back to lower courts for a greater debate on the constitutionality of the action. But, of course, we are preparing for all contingencies. If the Court allows the mandate to remain in effect, we will have a webinar and guidance for larger restaurant groups on how best to comply.