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Restaurants and Third-Party Delivery Companies Agree to Public Policy Principles

1/19/2021

 
The National Restaurant Association released Public Policy Principles for Third-Party Delivery (Principles) that define best practices for third-party delivery to guide lawmakers in developing public policy. The release of the Principles culminates a year-long effort by the Association to develop national guidelines based on the experiences of restaurant operators of all sizes. The Principles represent the first time the restaurant industry and third-party delivery companies have come together and agreed on a framework for their relationship.

Delivery represents one of the most important segments of growth for the restaurant industry. In a National Restaurant Association online survey of 1,000 adults conducted Dec. 7-9, 2020, 70% of adults say they ordered delivery from a restaurant and 40% had used a third-party delivery company for their delivery. The pandemic has accelerated restaurant customers’ comfort with technology, and with that new level of access comes a lasting desire for easier ways to satisfy their pent-up demand for their favorite restaurant meals. 

“Even before the pandemic, delivery – and decisions related to delivery – had major impacts on restaurant operations,” said Mike Whatley, vice president for State and Local Affairs for the National Restaurant Association. “Until now, the relationship between restaurants and third-party delivery companies lacked a national framework to protect restaurants. These new Principles, which center around permission and transparency, add consistency and structure that will benefit all restaurants. This agreement represents an important first step in an ongoing dialogue between restaurants and third-party delivery companies about ways to improve our relationship going forward.”

The seven Principles are:
  • Restaurants have a right to know and determine when and if their food is delivered.
  • Customers should expect the same degree of food safety from delivery as they do when dining in a restaurant.
  • Restaurants should be able to offer alcohol to customers through third-party delivery in a safe and legal manner.
  • Restaurants deserve transparency on fees (including commissions, delivery fees, and promotional fees) charged by third-party delivery companies.
  • Third-party food delivery contracts need contractual transparency, and issues surrounding fees, costs, terms, policies, marketing practices involving the restaurant or its likeness, and insurance/indemnity should be clear.
  • Sales tax collection responsibility must be clear in terms of which party is collecting and remitting the specific sales tax to the appropriate authority.
  • As a best practice, third-party delivery companies should offer restaurants access to anonymized information regarding orders from their restaurant that originate on third-party platforms.

“We are grateful for the opportunity to have partnered with the National Restaurant Association in developing these principles, which will help platforms like DoorDash continue to empower restaurants to reach new customers and grow their revenue,” said Max Rettig, global head of Public Policy at DoorDash. “We are proud to support these principles through the range of products and services we’ve developed for restaurants, and we look forward to continually improving our offerings to best serve our restaurant partners.” 

"These principles will help strengthen the critical relationship between the diners, drivers and restaurants that has grown even more important during the pandemic," Seth Priebatsch, chief revenue officer at Grubhub, said. "We look forward to continuing to work with the National Restaurant Association to deliver for the hundreds of thousands of restaurants we’re proud to partner with every day."

“The teams at Uber Eats and Postmates are committed to the restaurant community,” said Stephane Ficaja, head of Uber Delivery for the U.S. & Canada. “As one company, we’ve recently made commitments to listening to and learning from merchants and have worked together to support the National Restaurant Association’s development of these new principles that are designed to address the most pressing interests of the industry.”

In the customer survey, roughly 90% of customers who ordered delivery in the last six months favor each of the seven Principles. Read the full Public Policy Principles for Third-Party Delivery here. 

Biden's American Rescue Plan

1/19/2021

 
President-elect Biden made a speech announcing his framework for an American Rescue Plan (ARP), a $1.9 trillion COVID relief bill.  While the attached includes key insights, it lacks the detail needed for a thorough analysis.  Alarmingly, it would raise the minimum wage to $15 per hour and eliminate the tip wage (see below for additional details). Until we have a copy of the proposed bill, what is included below is speculation based on the content of his speech.
 
Speaker Pelosi and incoming Senate Majority Leader Schumer swiftly endorsed the proposal, encouraged Republicans to  support it, and pledged to work on its passage.  Biden has suggested that he would like to see it enacted by the end of the month.
 
Following are some of the ARA’s key elements:
  • Federal Minimum Wage
    • Raise the federal minimum wage to $15 per hour (no details on a timeline and/or phased-in approach).
    • Eliminate the tipped minimum wage.
    • Eliminate the sub-minimum wage for people with disabilities.
    • No further details are provided for consideration of this proposal.  We are, however, informed by Democratic senior leadership staff that the minimum wage increase will likely not be tied to a post-inauguration COVID bill, as they do not want to bog it down; and that the minimum wage debate will likely occur in the House in February, and the Senate in March.
 
  • OSHA COVID-19 Protection Standard
    • Calls on Congress to “authorize OSHA to issue a COVID-19 Protection Standard that covers a broad set of workers” to protect them from the virus.
    • Organized labor has pushed heavily for this safety standard.
    • As authorized, OSHA would promulgate an emergency temporary standard pursuant to its statute but there are no details provided as to how far reaching the standard would be.  We suspect, however, it could be very similar to the recently issued overreaching California safety standard.  
    • Increases funding for OSHA enforcement and grant funding.
    • Given the lack of legal liability protections in place for employers for exposure-based claims, the overlay of this safety standard on employers is concerning and potentially opens the flood-gates to potential litigation.  

  • Emergency Paid Leave
    • Extends the emergency paid leave requirements contained in the Families First Coronavirus Response Act to September 31, 2021, and eliminates the 500 employee threshold, mandating all private and public sector employers to offer paid leave.
    • It would also, eliminate the safe harbor provision for covered employers with less than 50 employees. 
    • It only extends the refundable tax credit for employers with less than 500 employees. 
    • Additionally, it would provide over 14 weeks of paid sick and family and medical leave for parents to take care of their child and family members under certain conditions.
 
  • $15 billion in grants to small businesses
    • We do not have details yet on these grants.
 
  • Community Credit Corporation Assistance – Restaurants
    • Calls for providing a bridge to recovery – including through the Community Credit Corporation at the U.S. Dept. of Agriculture – for restaurants, bars, and other businesses that have suffered disproportionately.
    • We do not have details yet on what he will specifically propose.
 
  • $35 billion in government funds to leverage $175 billion in additional small business lending and investment
 
  • FEMA Empowering Essential Deliveries (FEED) Act
    • This Act would leverage the resources and expertise of the restaurant industry in helping to get food to families in need and laid-off restaurant workers back on the job.
    • The FEED Act would  authorize the Federal Emergency Management Agency (FEMA) to approve state, local, and Indian tribal government plans to partner with small and mid-size restaurants and nonprofit organizations to provide nutritious meals to individuals in need.
    • We called for passage of this legislation in our Blueprint for Restaurant Revival in July 2020. 
 
  • Direct Checks to Individuals
    • Increases direct financial assistance to $2,000 by an additional $1,400 per person in direct checks (that is in addition to the $600 per person that Congress authorized in December.)
 
  • Unemployment Insurance (UI)
    • Extends expanded unemployment benefits through the end of September, with an extra $400 weekly supplement.
 
  • Eviction and Foreclosure Moratoriums
    • Extends eviction and foreclosure moratoriums and continues applications for forbearance on federally-guaranteed mortgages until September 30, 2021. 
 
  • Increases to the Child Tax credit
    • Increases the credit to $3,000/child ($3,600 for a child under age 6) and qualifying 17-year olds as children for the year.
 
  • National Vaccination Program
    • Creates a national vaccination program in partnership with states, localities, tribes and territories; and will include the launching of community vaccination centers around the country and deploying mobile vaccination units to hard-to-reach areas.​​

LRA Announces 2021 Chair & Officers

1/18/2021

 
The Louisiana Restaurant Association announced its 2021 volunteer leadership with Keith Bond as its Chair. Bond has been in the restaurant business since 1997 when he and his wife Shelly partnered with her father to open the second Mel’s Diner in Broussard. Named for Shelly’s mother Mel, she and Keith are rebuilding the original Mel’s Diner Johnston Street location which was gutted by a fire and is expected to reopen it in April 2021. He has served on the LRA’s Board of Directors since 2014 and has been active in the LRA’s Acadiana chapter for many years.
 
“The LRA is fortunate to be led by a group of professionals who are actively involved in the restaurant industry, especially after the past year we’ve experienced,” said Stan Harris, LRA President and CEO. “These leaders support their peers by sharing best practices and ideas on how we can make this industry more resilient. Their willingness to volunteer their time and efforts during an extremely difficult business climate is critical to the mission of the LRA.”
  
The 2021 officers of the LRA:
 
  • Michael Boudreaux, Vice Chair— Boudreaux is a partner in the soon to open SouLa restaurant and co-owner of Juban’s restaurant in Baton Rouge
  • Michael Maenza, Secretary— Maenza is the owner of MMI Culinary, Mr. Mudbug’s, 12 Seasons Catering Company and SWEGS Kitchen in New Orleans
  • Alan Guilbeau, Treasurer—Guilbeau is the Executive Vice President of Business Development of PJ’s Coffee & Tea of New Orleans and New Orleans Roast Coffee & Tea
  • Mark Latter, At-Large–Latter is owner of Latter Hospitality including Tujague’s Restaurant, Claret Wine Bar, The Bower, and the soon to open Birdy’s in New Orleans
 
The following members were elected to serve as an LRA Director for a one-year term in 2021:
 
Acadiana Chapter
  • Keith Bond, Mel’s Diner Part II, Lafayette and Broussard
  • Dwight Prudhomme, Republic National Distributing Company
 
Greater Baton Rouge Chapter:
  • Bruce Attinger, Walk-On’s Sports Bistreaux
  • Michael Boudreaux, SouLa and Juban’s restaurants
  • Michael Carmouche, Ecolab
  • Mickey Freiberg, A La Carte Food Properties
  • Matt Massey, Raising Cane’s Chicken Fingers
  • Peter Sclafani, Down South Hospitality  - Phil’s Oyster Bar, Portabello’s, P-Beaus and the soon to open SouLa restaurant
  • Scott Taylor, Walk-On’s Sports Bistreaux
 
Bayou Chapter:
  • Randy Barrios, Flanagan’s Restaurant and Fremin’s Restaurant
  • Greg Hamer, Taco Bell—B&G Food Enterprises
 
Greater New Orleans Chapter:
  • Tony Abadie, Jack Rose Restaurant, Hot Tin, Bayou Bar and Silver Whistle
  • Glen Armantrout, Mahony’s Po-boys & Seafood
  • Patrick Brennan, Ralph Brennan Restaurant Group
  • Ralph Brennan, Ralph Brennan Restaurant Group
  • Geordie Brower, II, Dickie Brennan & Co.
  • Katy Casbarian, Arnaud’s and Remoulade restaurants
  • Billy Clark, Galatoire’s Restaurant and Galatoire’s 33 Bar and Steak
  • John Eastman, Auto-Chlor Services
  • Nick Hazard, Crescent Crown Distributing
  • Jason Jones, Sysco
  • John Lalla, Natco Food Service
  • Mark Latter, Claret Wine Bar, The Bower and Tujague’s Restaurant
  • Helen LeBourgeois, TLC Linen Services
  • Michael Maenza, MMI Culinary, Mr. Mudbug’s, 12 Seasons Catering Company and SWEGS Kitchen
  • Octavio Mantilla, BRG Hospitality including August, Borgne, Domenica, Luke, Willa Jean, Shaya, Cho Thai and Pizza Domenica
  • Greg Reggio, Taste Buds Management including Zea Rotisserie & Bar and Semolina’s
  • Melvin Rodrigue, Galatoire’s Restaurant & Galatoire’s 33 Bar and Steak
  • Paul Rotner, Acme Management Group
  • Randy Stein, Mr. B’s Bistro
  • Emery Whalen, QED Hospitality including Jack Rose Restaurant, Hot Tin, Silver Whistle and Bayou Bar
 
Northeast
  • Darrell Whaley, Taco Bell
 
Northshore
  • Brian Girardot, Community Coffee
  • Alan Guilbeau, PJ’s Coffee & Tea of New Orleans and New Orleans Roast Coffee & Tea
  • Jake Palmer, Acme Oyster House
 
Southwest
  • Chauncey Davis, Ben E. Keith Company
  • Rob King, Pitt Grills & Southern Kitchens

​*Headshots attached. 

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LRA Announces 2021 Leadership

1/18/2021

 
The Louisiana Restaurant Association is proud to announce the chapter presidents who will lead its membership in 2021. The LRA is comprised of nine chapters across the state, each designed to support our advocacy and membership activities. Every year, the chapters’ Board of Directors elects a restaurant owner in its ranks to serve as President. This year’s leaders, who volunteer their time and efforts at the highest level, are charged with localizing the overall LRA member experience and cultivating opportunities for growth within the association.
 
The 2021 LRA Chapter Presidents are:
 
  • Acadiana Chapter: Randy Daniel of OMW Restaurant Holdings including La Pizzeria in Lafayette
  • Bayou Chapter: Buddy Aucoin of DJ’s Grille in Vacherie
  • Cenla Chapter: Scott Laliberte of The Diamond Grill, The Mirror Room, The Bentley Room and Hotel Bentley in Alexandria
  • Greater Baton Rouge Chapter: Jeffrey Conaway of Beausoleil in Baton Rouge
  • Greater New Orleans Chapter: Mark Latter of Latter Hospitality including in New Orleans including Tujague’s Restaurant, Claret Wine Bar, The Bower, and the soon to open Birdy’s in New Orleans
  • Northeast Chapter: Tara Ambrose of Tara’s Taste of the Town West Monroe
  • Northshore Chapter: Jake Palmer previously of Acme Oyster House
  • Northwest Chapter: Jason McKinney of Texas Roadhouse in Bossier City
  • Southwest Chapter: Ben Ferguson of Sysco in Sulphur
 
“The LRA’s impact is significant because of its volunteer leaders,” said LRA President and CEO Stan Harris. “This group of restaurateurs and industry professionals will serve as strong representatives of their respective regions and the industry statewide in 2021.”

Wins for Restaurants in the Latest Stimulus Package

1/13/2021

 
The NRA/LRA successfully worked to include the following three items in the recent stimulus package.

  1. A second draw of PPP (application now available). 

  2. The deductibility of expenses for tax purposes using PPP funds. This will save the average PPP borrower 30-35% of the tax burden that would have been proposed under IRS guidance. For example, a restaurant borrows $500,000 in PPP, and the forgiveness of the loan triggers a tax effect of $150,000. So in essence the cost of the loan would be $650,000.
    ​
  3. And specifically for restaurants- only we can borrow 3.5 x our average monthly payroll when other businesses are limited to 2.5 x average payroll. We also retained the total employee carve-out for restaurants and hotels at 300 per location, not total enterprise headcount.

Metro Council Abandons Resolution to Prohibit Curbside Alcohol Sales

1/11/2021

 
You may be aware that the Baton Rouge Metro Council planned to vote this Wednesday to repeal the suspension of Alcoholic Beverage Control Board ordinances. In April 2020, the Metro Council suspended their ATC ordinances which allowed restaurants to sell to-go alcoholic beverages given the restrictions in place at that time.
 
We are pleased to report that after discussions with Mayor Broome and her team along with LRA member outreach to council members, this item has been removed from this week’s agenda and will not be considered or voted upon at this time. We appreciate the timely engagement of Mayor Broome and her staff working with us to address this issue at a time when further restrictions would negatively impact our industry as we operate under extended reduced capacity.
 
If you have any questions about this or any other issues, please reach out to us at communications@lra.org. 

PPP "User Manual" from the NRA

1/8/2021

 
The Small Business Administration (SBA) and Treasury have released their official guidance on how the second round of PPP will work. 
 
As a reminder, application timing: the PPP reopened on Monday, January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially, only community financial institutions were able to make First Draw PPP Loans on January 11 and Second Draw PPP Loans on January 13, 2021. The PPP will open to all participating lenders shortly thereafter. There are also targeted “set aside” funds for categories such as new and smaller borrowers, borrowers in low- and moderate-income communities, and for community and smaller lenders. 
PPP User Manual

Employer Considerations For Determining Whether To Continue Providing FFCRA Leave After Law’s Expiration

1/7/2021

 
After much heated negotiation in passing Stimulus 2.0, Congress reached a compromise on employee COVID-19 leave, allowing the leave requirements of the Families First Coronavirus Response Act (FFCRA) to expire on December 31, 2020, but continuing tax credits through March 31, 2021 for employers who choose to voluntarily provide paid leave after that date. Now that employers with fewer than 500 employees are no longer obligated to provide FFRCA leave, many are left wondering whether they should continue to provide leave for their employees who are impacted by COVID-19. This article aims to provide an overview of the state of the law and provide employers with the pros and cons of continuing to provide FFCRA leave to make the best decision for their workplace.

Stimulus 2.0
Because Stimulus 2.0 does not extend the leave requirements of the FFCRA, employers are no longer required to provide Emergency Paid Sick Leave (EPSL) or Emergency Family and Medical Leave (EFMLA) after December 31, 2020. Additionally, Stimulus 2.0 does not provide any additional leave entitlement for employees who have exhausted their FFCRA leave entitlement (up to 80 hours of EPSL and up to 12 weeks of EFMLA). If employers used all of the leave by December 31, the limits did not reset January 1.
The final legislation simply extended the refundable employer payroll tax credit for both EPSL and EFMLA until March 31, 2021, subject to the applicable caps. Therefore, you may choose to voluntarily continue to provide FFCRA leave, in whole or in part, until the end of March.

DOL Guidance
In response to “the critical need for American workers and employers to understand this relief program as they deal with the effects of this crisis on the workplace,” as expressed by Department of Labor (DOL) Wage and Hour Division Administrator Cheryl Stanton, the agency issued guidance on December 31 to provide clarity on the issues raised by the expiration of the FFCRA.

The DOL confirmed that the obligation to provide FFCRA leave applies only from April 1, 2020, through Dec. 31, 2020, and that change to extend the requirement to provide leave under the FFCRA would require an amendment to the law by Congress, which has not occurred. Likewise, the DOL affirmed the continued availability of refundable employer payroll tax credit for FFCRA leave through March 31.

Additionally, the DOL cautioned that, despite the FFCRA’s expiration, employers must still pay any FFCRA leave wages owed to employees who used FFCRA leave between April 1, 2020 and December 31, 2020. With that backdrop, employers are now quickly weighing the pros and cons of extending leave as COVID-19 numbers spike to an all-time high, employees are returning to work after the holidays, and some schools are going back to virtual learning.

Pros Of Continuing To Provide Leave
There are several significant reasons why you should consider extending FFCRA leave into 2021.

The Need Remains
The FFCRA was passed, in part, to respond to the issues caused by the significant numbers of employees who were unable to work or telework due to COVID-19. These issues did not resolve with the ringing in of the new year. In fact, COVID-19 numbers are on the rise and showing no sign of slowing. As a result, the need for FFCRA leave is as substantial as when it passed in March 2020.

Leave Slows The Spread
One of the primary purposes of the FFCRA was slowing the spread of COVID-19. By providing paid leave for employees who have been diagnosed with COVID-19, have been exposed to COVID-19, or are experiencing symptoms, employees are encouraged to stay home when sick and avoid the risk of spreading the virus to others in their workplace. Without paid leave, employees are more likely come to work sick or knowingly exposed because they either have no employer-provided paid leave, or they simply do not want to use all of their paid leave when they are ill, preferring to save their paid time off for vacation.

As a result, if you do not continue to offer the leave, you run the risk of employees who should be in quarantine reporting to work and potentially infecting their coworkers or customers, potentially leading to a super-spreader event. The disruption, including having a significant number of employees out of work or being required to shut down the workplace entirely, far exceed any potential adverse impact of eligible employees using up to two weeks of EPSL.

There Is No Significant Financial Loss
While you will initially have to foot the bill and provide the out-of-pocket costs for employee wages while on leave, the wages paid are not a loss, per se, because Stimulus 2.0 provides for continued tax credits. If administered correctly, the financial impact should be a wash, excepting any costs and effort expended in administering the leave. Overall, considering the risks of employees reporting to work sick, the cost of providing and administering leave are miniscule compared to the cost of being forced to close your doors as a result of your workplace being riddled with COVID-19 exposure or infection, loss of business, negative publicity and more.

Issues With Providing Continued Leave
There are several concerns you should recognize, however, before you decide to extend FFCRA past the December 31 expiration date.

Tax Credits Not Guaranteed
Ultimately it is up to the IRS whether your FFRCA wage payments qualify for the tax credit. This was true in 2020, and not just unique to employers who extend the leave into 2021. In order to receive the credit, employers must be diligent in ensuring they meet IRS requirements. If an employer fails to properly administer leave or is unable to substantiate their qualification for the tax credit, they may be left footing the bill.

Time Spent Administering The Leave Balanced Against Employee Usage
In order to obtain the tax credit, you must be diligent in satisfying numerous administrative requirements: confirming that your employees who use FFCRA leave actually qualify, ensuring wages don’t exceed the statutory caps or limits, tracking the leave, maintaining documentation, and meeting other IRS requirements. For small employers, this may be additional work they do not want to take on in the new year, particularly if only a few employees did not use the leave entitlement by December 31. Small employers should consider how many employees may be left to qualify for the leave before March 31.

Potential For Discrimination Claims
Employers who choose to continue to provide FFCRA leave should have a clear and consistent plan. You could draw some lines to limit the leave to certain classes of employees, such as only for non-exempt employees. Or you may choose only to offer up to two weeks of EPSL and not up to 12 weeks of EFMLA. Whatever route you take, you should develop it in an objective fashion, clearly articulate your plan, and ensure it is consistently followed. Arbitrarily picking and choosing who can receive the leave could pose a risk for a discrimination claim on the basis of race, age, sex, etc.

Work Disruption
Employees using any form of paid leave for an extended period of time have the potential to cause a business disruption to your operations. Considering EPSL and EFMLA may be taken for up to two weeks and 12 weeks, respectively, there is the potential that such extended leaves may result in significant disruption, depending on the employee’s role and the business circumstances. Given that the two weeks of sick leave is largely designed to slow and curb the spread of COVID-19, you may decide to only offer the emergency sick leave versus the full 12 weeks of EFMLA for childcare and school closures.

What Employers Should Do Next
You need to quickly weigh and determine the benefits and burdens of continuing to provide paid leave created under the FFCRA, and timely communicate the decision to your employees. On balance, for employers that still have a number of employees who could have a qualifying need for leave before March 31, the pro of curbing the spread of the virus by providing at least the emergency paid sick leave is strong.
You should also pay close attention to developments in Congress in the new term. There has already been discussion of a larger stimulus package after President-elect Biden is inaugurated. Under the new administration, paid leave may extend or even expand. You should also stay abreast of state and local paid leave laws that may afford time away from work for COVID-19 related reasons.
​
We will continue to monitor further developments and provide updates, so make sure you are subscribed to Fisher Phillips’ alert system to gather the most up-to-date information. If you have questions, please contact your Fisher Phillips attorney or visit our COVID-19 Resource Center For Employers.
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