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US Election 2020: what the results will mean for foodservice

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With uncertainty raging over the winner – and the potential fallout – of the election, Amelia Levin reports on what’s at stake for the US foodservice sector

It’s two days since the election polls opened and, at the time of publication, we still don’t know who the next president of the United States will be, nor do we know the final makeup of Congress. We might not know for days or weeks.

What’s also at a standstill, or which will require decisions soon, are a few pieces of legislation, pending in Congress, that could impact the foodservice industry in various ways.

Charlie Souhrada, CFSP, vice president, regulatory & technical affairs, NAFEM, offered a statement. “From a government relations standpoint, we expect next year to be a very busy year for the equipment and supplies industry,” he said.

“If there’s a change in the Oval Office, we anticipate the Biden administration will re-introduce most of the energy or environmental regulations the Trump administration rolled back, such as EPA SNAP’s Rule 20 & 21. On the other hand, if president Trump gains a second term, the industry and manufacturers in particular, may face ongoing international trade measures, such as the steel and aluminum Section 232 tariffs, while states will continue to patch and fill perceived voids left by the federal government.

“No matter what happens, it’s increasingly important for all of us to pay close attention to legislative activity for its effect on the industry and to make sure our voices are heard.”

We checked with the National Restaurant Association for any statements regarding the election; they did not have one to share. But, the Restaurant Law Center’s 2020 Restaurant Legal Summit (virtual edition), held in October, featured a session, Legislative and Regulatory Review: Where We’ve Been and Where We [May] Go From Here, presented by two restaurant lawyers, Michael Lotito and Jim Paretti, both of Littler Mendelson/Workplace Policy Institute, who offered information on what’s been passed in Congress as well as legislation that’s still pending and other deadlines coming due.

Legislation already passed include: Coronavirus Preparedness and Response Supplemental Appropriations, which includes $8.3 billion in emergency funding for the Health and Human Services and the Centers for the Disease Control; Families First Coronavirus Response Act (FFCRA), which includes paid sick leave as well as an expansion of the Family and Medical Leave Act expansion; Coronavirus Aid, Relief and Economic Security (CARES) Act, which includes the Paycheck Protection Program, unemployment expansion of $600 per week and industry loans; and the Paycheck Protection Program and Health Care Expansion ACT (PPPHCEA), which included an additional $310 billion for PPP as well as more money for Economic Injury Disaster Loans through the Small Business Administration.

Based on leads from the Restaurant Law Summit session, as well as from Souhrada, here’s a quick rundown of some pending legislation and government activity with upcoming deadlines that could be impacted by changes in government:

COVID-RELATED:

HEROES Act

The $3 trillion package, passed by the House on May 15, is currently pending in the Senate. The package includes hazard pay, extended unemployment insurance at $600/week, extended and expands the previously passed, FFCRA paid sick leave and family leave provisions and additional funds for state and local governments. The House revised and passed a “lighter” version of the package that was passed on October 2.

Lotito and Paretti said during the session that they expect that the stall in the Senate is a result of the proposed unemployment insurance because of its high cost to government and the incentivizing it might have on workers, especially restaurant workers, to not come back to their jobs.

HEALS Act

This $1 trillion package was introduced to the senate on July 27, and is still pending. The package also includes liability protections and a limited extension of unemployment insurance.

OSHA

OSHA has resisted calls to enact a temporary, emergency COVID-19 standard and has instead released guidelines. The AFL-CIO brought a lawsuit against the agency to try compel it to issue a standard, but it was rejected by a D.C. Circuit Court judge. In the meantime, states have been adopting their own emergency standards. The state of Virginia was the first state to do so, and its standard addresses issues such as paid sick leave, disability and other worker benefits. It is possible that other states could follow suit if OSHA continues to take a guidelines approach.

RESTAURANTS Act

The Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive (RESTAURANTS) Act, proposes providing $120 billion in relief through a grant program administrated by the Treasury Department. Restaurants, bars and even caterers, who experienced heavy losses during pandemic-related closures, and which continue to experience economic distress, would be eligible for funds outside of the PPP, which could still be used for payroll, but also for mortgage, maintenance, rent, supplies and other needs. The Act passed in the House, but remains at a standstill in the Senate.

Non Covid-related:

Joint Employment Rule

On January 12, the Department of Labor issued a final rule updating its interpretation of “joint employer” status under the Fair Labor Standards Act (FLSA), which requires covered employers to pay their non-exempt employees at least the federal minimum wage and overtime. The final rule provides guidance for determining who can be considered joint employers are those who hire or fire employees; supervise and control the employee’s work schedule or other conditions of employment; determines the employee’s rate and method of payment; and maintains the employees employment records. This rule, which means that a restaurant can be held legally accountable for its franchisees if it hires and fires the operator’s employees and conducts other business as stated above, took effect on March 16.

According to Lotito, a lawsuit filed by about 17 state attorney generals against the ruling was struck down by federal court (New York v. Scalia). Deadline for appeal is November 9. Department of Justice would be the department to file this appeal, but has not yet filed the appeal.

Tip Credit Final Rule

The proposed “Tip Credit” rule would allow employers to take a tip credit toward wages, meaning restaurants can continue to count a portion of tipped employees tips toward their minimum wage standards. A rule like this allows restaurants to pay less than the state or federal minimum wage, assuming the tipped server makes up the rest in tips. A ruling is expected this month (November); however, none have yet been filed.

If there is a late filing, coupled by a change in the White House, there could be an invoking of the Congressional Review Act (signed into law in 1996), which allows Congress to overturn rules issued late in a previous president’s term and enact changes or amendments if they are approved by the current Congress and signed by the current president.

DOL Independent Contractor Rule

The Independent Contractor rule helps a business determine if an individual performing services for the company is a W2 employee entitled to benefits, sick leave, break times, etc., or if the individual is an independent contractor not requiring those benefits. Comments were due Oct. 25, but there has not yet been a final ruling.

Lotito said he filed comments on behalf of restaurants to ask that the Department of Labor make clear that there would not be invoking of the Independent Contractor Rule, particularly when it comes to restaurants working with third-party delivery drivers who deliver the food, and to ensure that these delivery workers would continue to be considered independent contractors.

On November 3 Election Day, California’s Proposition 22 passed. This prop allows third-party delivery companies like Uber, Lyft and DoorDash to continue to treat their drivers as independent contractors rather than employees. While this Proposition was hotly contested by labor unions focused on workers’ rights, this could bode well for restaurants concerned about a DOL rule that would require them to treat third-party delivery drivers as essentially employees.

Department of Energy activity

According to NAFEM, the DOE is currently in the process of proposing revisions to enforcement regulations; evaluating amending ACIM energy-conservation standards; and proposing to address hot gas defrost-equipped unit coolers. A new Energy Bill could result in a patchwork of state-by-state standards.

Tariffs and trading

NAFEM members have opportunity to file suit, potentially recover Section 301 tariffs based on the World Trade Organization’s finding of violations of those tariffs.

Amelia Levin