GRA Weekly

September 19, 2024

This week's newsletter is brought to you by GRA Corporate Partner, Moore Colson

LAST CALL: GRACE NOMINATIONS

GRACE Nominations Close Tomorrow

We want to hear from YOU! Let us know who you think should be a recipient of a 2024 GRACE Award! Submit your nominations before tomorrow, September 20 at midnight.

Categories Include:

Lifetime Achievement

Restaurateur of the Year

Restaurateur Rookie of the Year

Industry Partner of the Year

Hospitality Hero of the Year

Restaurant Manager of the Year

Restaurant Employee of the Year

"Georgia On My Mind" People’s Choice

Nominate Here

KAMALA HARRIS PROPOSES NEW POLICY TO END TIP CREDIT

Kamala Harris Proposes New Policy To End Tip Credit

Vice President Kamala Harris’ campaign released a 23-point policy platform on its website this week, and one phrase in particular is catching the restaurant world’s attention: a promise to “fight to end sub-minimum wages for tipped workers.” The policy could trigger sweeping changes across the industry if enacted, reshaping how servers are compensated and how operators run their businesses.

The tip credit allows restaurants to pay servers and bartenders a lower base wage, supplementing it with tips to meet minimum wage thresholds. Employers are required to make up the difference if total earnings fall short of that standard. Eliminating this system would mean paying tipped workers the same hourly rate as non-tipped employees.

Understanding Debt-Like Items and Their Cash Flow Impact

As mergers and acquisitions begin to pick back up, buyers and sellers should not lose sight of potential debt-like items that can significantly impact net proceeds from a sale and post-close cash flows.

What Is a Debt-Like Item?

Transactions are typically structured on a cash-free and debt-free basis, meaning the seller pays off all outstanding bank debt and... continue reading.

NATIONAL FOOD SAFETY MONTH

September is National Food Safety Month!

This year ServSafe is getting smart about foodborne illnesses by understanding, managing, and preventing outbreaks. To kick things off, they are examining common culprits of foodborne illnesses like Norovirus, Salmonella, E. coli, Hepatitis A, and Shigella.

Download their eBook, "The Science of Foodborne Illnesses and Outbreaks," to learn about these pathogens and how to prevent contamination in your operation.

To celebrate NFSM2024, GRA members can save 20% off on popular ServSafe products all month with code NFSM2024.

GRA IN THE NEWS

James Magazine Releases their Top 30 Trade & Business Associations for 2024!

The Georgia Restaurant Association is featured in James Magazine's current issue as a Top 30 Trade & Business Association! We're honored to be included in this list, alongside 29 other amazing associations of Georgia!

View the full list here.

BEN'S FRIENDS

Ben's Friends Meets Weekly in Atlanta

Ben’s Friends, a national support group for people in the hospitality industry struggling with addiction, launched in Atlanta this month. Weekly meetings will be held on Mondays from 11AM - 12PM at Pricci Restaurant.

This chapter welcomes anyone who has found, or is struggling to find, sobriety while working in the food and beverage industry.

For more details and updates, follow their Instagram here.

RESTAURANT LEGAL SUMMIT

8th Annual Restaurant Legal Summit

Join the Restaurant Law Center this October 23-25 for the 8th Annual Restaurant Legal Summit in San Juan, Puerto Rico! Learn and connect with other industry chief legal officers, attorneys, and human resource professionals. In addition to meeting senior representatives from some of the industry’s most successful brands, attendees get access to the latest information on current trends and best practices from legal experts at some of the nation’s top law firms.

WHAT WE'RE READING THIS WEEK:

FEDERAL UPDATE

New Study Finds Eliminating the Tip Credit Has No Impact On Earning Gaps

Top Line: The Employment Policies Institute (EPI) recently released a study conducted by University of California-Irvine economists, that finds eliminating the tip credit does not have any discernible impact on eliminating earnings gaps between minority, female, and white male employees.

Zoom in: The study of more than 2 decades of Census data found:

Total weekly earnings for women and minority tipped workers does not increase with tipped minimum wage increases.
For minority tipped employees, the minimum wage increase actually makes the hourly wage gap greater.
Keeping the tip credit is more efficient at raising wages and reducing the earnings gap.

Bottom line: According to the report, eliminating the tip credit, “in fact stands to hurt employees and restaurants by taking away jobs and earnings.” Read the full report here.

Voluntary FDA Sodium Reduction Recommendations Released

What happened: The Food and Drug Administration (FDA) has proposed Phase II voluntary targets to reduce sodium in over 150 categories of packaged foods and restaurant foods.

Why it’s important: The guidance is Phase II of the FDA’s sodium reduction efforts and builds on the Phase I sodium reduction targets issued in Oct. 2021. The new draft targets represent anywhere from a 1%-58% reduction from the current marketplace sodium levels, with the majority of restaurant food categories having a 20%-35% reduction goal over the next 3 years.

Phase I update: The FDA also released preliminary findings on progress toward achieving the 2021 Phase I sodium reduction targets between 2010 and 2022, which called for around 10%-20% reductions depending on food category. They found that since 2010, 35% of restaurant food categories have decreased in sodium while 49% of restaurant food categories have increased in sodium. The agency said it will issue a complete evaluation of the industry’s progress to the Phase I targets when the data from 2024 is available. The FDA has said it anticipates regular evaluations of sodium in the food supply every 3 years.

What’s next: The Association has expressed to the FDA the industry’s concern with these steep Phase II reductions and explained that challenges within our supply chain make it difficult to meet these goals. The Association continues to push for realistic timelines, credible data, and better understanding of restaurant supply chains.

In Big Win for Restaurant Operators, U.S. Court of Appeals Wipes Away 2021 Amendments to the Dual Jobs Regulation

What happened: In a 3-0 decision, the 5th Circuit Court of Appeals vacated the U.S. Department of Labor’s 2021 Final Rule amending the “Dual Jobs” regulation, agreeing with the Restaurant Law Center and the Texas Restaurant Association (TRA) that the Final Rule is arbitrary and capricious because it draws a line for application of the tip credit based on impermissible considerations and contrary to the statutory scheme enacted by Congress. This is a major win for restaurant operators, the Association, the Law Center and the TRA.

What it means: The amendment to the Dual Jobs regulation is now unenforceable. The Court noted in its decision that this case holds no bearing “on the validity of the dual-jobs regulation,” which was not at question. The decision highlights the importance of the restaurant industry having its own legal representative to take cases where others will not.

What they’re saying:

“This decision is a big deal for restaurant owners and for tipped employees. For more than two and a half years, restaurant owners have worked in fear of not being in compliance with the complicated and confusing requirements of the 2021 amendments. Today’s decision will alleviate the confusion and allow operators to focus on the economic challenges that threaten their business viability.” –Sean Kennedy, Executive Vice President of Public Affairs, National Restaurant Association

“We are pleased that the court agreed with us and determined that the Wage and Hour Division overreached and exceeded its proper authority with its amendments to the ‘Dual Jobs’ regulation. The Department of Labor and its agencies had no authority to redraft the laws that Congress enacts, denying businesses the rights conferred by statute. The Restaurant Law Center and the Texas Restaurant Association brought this case because local restaurants would suffer irreparable damage from the illegal and unjust 2021 amendments to the ‘Dual Jobs’ regulation and we’re satisfied to have ultimately succeed in having the new regulation thrown out due to its illegality.” –Angelo Amador, Executive Director, Restaurant Law Center

NLRB Drops Joint Employer Appeal

What Happened: The National Labor Relations Board (NLRB) has officially dismissed its appeal of the Eastern District of Texas decision vacating the 2023 Joint Employer Rule. The 2020 Final Rule, which requires direct and immediate control to establish a joint employer relationship, remains in effect.

Why it Matters: The NLRB's decision to drop its appeal is a significant win for the Restaurant Law Center (RLC), a leading co-plaintiff in the legal challenge against the 2023 Rule, and the industry as a whole.

The RLC-supported 2020 Rule provides clear guidance for employers.
We remain vigilant against future attempts by the NLRB and the Administration to expand joint employer liability.
Go Deeper: For more information, please see the attached press release.

ICYMI: LAST WEEK'S TOP STORIES

Employer Educational Assistance Programs Can Still Be Used

The Internal Revenue Service today issued a reminder that employers who offer educational assistance programs can also use them to help pay for their employees’ student loan obligations through Dec. 31, 2025.

Though educational assistance programs have been available for many years, the option to use them to pay for workers’ student loans has only been available for payments made after March 27, 2020. Under current law, this student loan provision is set to expire Dec. 31, 2025. Continue reading.

Georgia DOR | Quarterly Sales & Use Tax Rate Updates

Effective October 1, 2024, Georgia Department of Revenue has published the new quarterly sales and use tax rates. Historical, current and upcoming sales and use tax rates changes may be viewed here.