Hot Off the Grill Edition #9
"Hot Off the Grill" - Edition #8
Introducing our sizzling new edition of newsletters: "Hot off the Grill"! We're fired up to bring you the latest and greatest industry updates, straight from the grill to your inbox. Curated by the National Restaurant Association and industry leaders, "Hot off the Grill" is your go-to source for the hottest industry topics happening across the county. So, sit back, relax, and let us serve you the freshest updates straight from the grill!
In This Issue:
- 2 wins in subcommittee appropriations bill
- Upcoming head-to-head on AZ tip credit
- MA court rules on tip credit ballot initiative
- Webinar: New federal reporting requirements due EOY
- PA restaurant owner testifies before House tax panel
- Increased funding forenergy-saving updates
House Subcommittee Includes Association-Backed Provisions in Appropriations Bill
The News: Last week, a House Appropriations subcommittee marked up the 2025 Agriculture, Rural Development, Food and Drug Administration (FDA), and Related Agencies funding bill. The House Republicans’ bill provides $25.9B in discretionary funding, a 4% cut from 2024.
Key Provisions: 2 Association-backed provisions were included in the bill related to food traceability and sodium.
- The bill requires the FDA to complete at least 4 pilot programs before moving forward with a rule on food traceability. It also changes the implementation timeline of that rule to begin 2 years after the pilots are complete.
- The bill also prevents the FDA from moving forward on long-term sodium guidelines until it assesses the impact of its current short-term sodium targets.
What’s Next: Government funding expires Sept. 30 and fiscal year 2025 begins Oct. 1, 2024. House Republicans have stated that they aim to pass the 12 requisite annual funding bills before the August recess
Arizona Voters Likely to Decide Future of Tip Credit in State.
What Happened: Last week, the Arizona State Senate passed a constitutional amendment that would ensure a tip credit in the state of Arizona.
Dive Deeper: The Arizona Restaurant Association backed this effort, which would allow employers to take a 25% tip credit if employers guarantee tipped employees at least $2 above the state’s minimum wage when tipped wages and tips are added together.
Why it Matters: This amendment will be on the Nov. 2024 ballot. A separate ballot measure to eliminate the tip credit in Arizona could also be on the Nov. 2024 ballot if enough valid signatures are gathered by early July.
What if: If voters were to approve both measures, the constitutional amendment preserving the tip credit would supersede the initiative to eliminate it.
Massachusetts Supreme Judicial Court Rejects Challenge to Ballot Question
The News: Last week, the Massachusetts Supreme Judicial Court (SJC) issued a ruling in SJC-13560, Stephen Clark & others vs. Attorney General & another, on whether Initiative Petition23-12, An Initiative Petition for a Law Requiring the Full Minimum Wage for Tipped Workers with Tips on Top was properly certified.
What Happened: The Massachusetts Restaurant Association’s (MRA) brought this challenge, arguing against the eligibility of a ballot question to eliminate the tip credit. The SJC ruled that the question as filed was properly certified.
Why it Matters: As a result, an initiative to eliminate the tipped credit through a ballot question can continue to gather signatures. If enough valid signatures are gathered and submitted by early July, the question will be on the Nov. 2024 ballot.
What’s Next: The Massachusetts Restaurant Association (MRA) will continue to vigorously oppose this effort.
PA Restaurant Owner Testifies Before House Tax Panel
What Happened: The powerful House Ways & Means Committee recently heard directly from a restaurant operator in May about how a soon-to-expire tax credit benefitted his business.
What Was Said: Jason Spore, owner of the newly formed Erie-based ippa Pizza Napoletana, testified in May about how his new business has benefitted from Opportunity Zone tax incentives.
About the Credit: The Opportunity Zone tax incentive is an economic development tool that allows people to invest in distressed areas. This incentive's purpose is to spur economic development and job creation in distressed communities by providing tax benefits to investors.
Why it Matters: At the end of 2025, the OZ program is set to expire along with several key tax programs that support the restaurant industry.
New Sweeping Reporting Rules and Key Steps to Comply—Supported by Frost Law
Mark Your Calendar: Join the Restaurant Law Center and Frost Law this Thurs., June 20, for a webinar that will review the federal reporting requirements that must be met by the end of 2024 due to the Corporate Transparency Act (CTA).
About the CTA: Enacted in 2021 to prevent illegal activities by anonymously owned entities, the CTA mandates that beneficial owners who exercise “substantial control” over the reporting company—or control at least 25% of company—must disclose information to a Department of Treasury by Jan. 1, 2025, including company names, d/b/a names, taxpayer identification numbers, individual information, and more. Non-compliance can result in major fines.
What to Expect: In this webinar, you’ll learn:
- What kinds of companies must report under the CTA
- The information needed to comply as a beneficial owner
- Which simple steps can help with compliance and safeguard your business from any penalties
- How to plan for a multi-year effort to protect beneficial ownership data
Register Today: Signup here
New Action Expands Loan Access for Energy-Reducing Retrofits, Solar Panel Installation
The News: The Small Business Administration has lifted the lending cap for clean energy projects through its 504 Loan Program, which is designed to benefit small and medium businesses. The cap was previously set at $16.5M.
What this Means: Restaurant operators interested in projects to reduce energy consumption through a building retrofit or to produce renewable energy will have greater access to capital.
More About the Program: The 504 Program has 10-, 20-, and 25-year maturity terms available with an interest rate above the current market rate for 10-year U.S. Treasury issues.
In the news…
Labor agency’s rule defense pivots ahead of high court action
The US Labor Department is abandoning a legal doctrine under which courts defer to agency interpretations of laws as a shield against challenges to some of its most high-profile rule makings—including in cases examining the DOL overtime rule and dual jobs—a sign it’s attempting to head-off the Supreme Court’s expected gutting of the Chevron standard. “The Department’s brief does not mention Chevron even once,” the National Restaurant Association argued in its lawsuit challenging the DOL’s final tipped wages rule, issued in 2021. “Nowhere does the Department expressly contend that the Final Rule satisfies any of the specific steps of the Chevron analysis, much less all of them, as the Final Rule must in order to be valid.” When the Restaurant Law Center and the Texas Restaurant Association sued over the rule in 2021, the DOL initially argued in its motion for summary judgment that the rule should remain intact under Chevron because Congress clearly “delegated authority to the agency” when it passed the FLSA’s tip-credit provisions in 1966, and that its final rule “was promulgated in the exercise of that authority.”
Trump floats tax-free tips for workers. That could mean more tipping for customers.
Former President Donald Trump’s proposal to make workers’ tips nontaxable introduces an untested idea to raise take-home pay that would encourage businesses and employees to recharacterize taxed wages as untaxed tips. Sean Kennedy, EVP of Public Affairs at the National Restaurant Association, said he appreciated that Trump is looking for ways to support tipped workers and expand the industry.
31 Republicans challenge Biden’s overtime rule that will crush small businesses
Republican senators are challenging President Biden's new overtime rule which raises the minimum salary threshold for overtime pay. “The National Restaurant Association has serious concerns with the impact the overtime rule will have on restaurant operators, especially the significant cost increases that come with it so soon after an increase just 4 years ago. Input costs for operators have increased significantly since then, with a 30% increase in labor costs alone in the last4 years. On top of that, the Department of Labor did not heed our concerns, especially as it relates to regional discrepancies and the burden of automatic increases every 3 years. We appreciate Sen. Braun showing his support of the industry by introducing this legislation to draw attention to problems with the DOL’s approach on this issue,” said Sean Kennedy, EVP of Public Affairs for the National Restaurant Association.
Tips to navigate summer job market for high school, college students
This summer, with more than 2M high school and college students anticipated to engage in summer jobs and internships, CBS News business analyst Jill Schlesinger offers valuable advice to assist students in navigating the job market. "Leisure and hospitality are always big in the summertime. The National Restaurant Association says they are going to hire more than half a million summer jobs. That’s amazing! "said Schlesinger.