February 25, 2021

What will Biden Administration policy mean for restaurants?

President Biden’s primary focus is on the pandemic, and on a two-part economic recovery plan.

National Restaurant Association policy experts say they’re optimistic about working with the Biden Administration to help small businesses, including restaurants and retail operations, start recovering from the devastating impact of the pandemic.

Shannon Meade, vice president of Public Policy and Legal Advocacy, indicated there are legislative and regulatory opportunities within the areas of immigration reform, infrastructure improvements and skills training.

Here’s a look at what’s happened and what’s to come.

December stimulus helped, but industry needs more

Back in December, when Congress passed the $900 billion COVID-19 relief bill, it included a second draw of the Paycheck Protection Program, the 100% forgivable loan ensuring that qualified business owners would have enough access to capital to continue operating.

It also included a tax-deductibility piece allowing restaurants and other businesses to deduct expenses paid with PPP loans, like payroll, rent and mortgage interest, and utilities, and extended employee-retention and work opportunity tax credits. The business meal deduction was reinstated, as well.

The policy team viewed December’s stimulus as a “down payment,” and anticipates more will get done once the new administration and congress are fully in place.

RESTAURANTS Act takes center stage in 2021

This year, the priority is passage of the reintroduced RESTAURANTS Act, the industry-specific $120 billion grant program the Association called for in its first Blueprint for Recovery in March 2020. Sens. Roger Wicker (R-Miss.) and Kyrsten Sinema (D-Ariz.), and Reps. Earl Blumenauer (D-Ore.) and Brian Fitzpatrick (R-Pa.) are the sponsors of the bipartisan legislation. Hopefully, $25 billion of RESTAURANTS Act is included in the Administration’s next round of relief.

The Association also advocated for the FEMA Empowering Essential Deliveries (FEED) Act. Recently mandated by executive action, the federal government will now pay 100% of the cost for states and localities to partner with restaurants and nonprofits who prepare and deliver meals to vulnerable populations, such as seniors and at-risk youth. The bill’s supporters include Vice President Kamala Harris and Chef José Andrés.

Administration’s economic recovery plan is main event

The President’s $1.9 trillion COVID-19 relief bill, which awaits passage, could kick start the anemic U.S. economy and bolster industries such as foodservice and hospitality that have lost billions of dollars in revenue and millions of employees over the last year. The restaurant industry alone estimates losses at more than $240 billion.

“President Biden’s primary focus is on the pandemic, making sure vaccines are distributed and that the process is streamlined, but he also is focusing on a two-part economic recovery plan,” Meade says.

The first part is the $1.9 trillion American Rescue Plan; the second is the Build Back Better recovery plan, which the President could unveil at or around the State of the Union address.

The American Rescue Plan features:

  • Federal minimum-wage increase to $15 per hour and elimination of tip credit
  • Extension of the Emergency Paid Leave Mandate (to Sept. 31, 2021)
  • Extension of unemployment insurance
  • Grants and credit assistance for small businesses
  • Passage of the FEED Act
  • Direct checks to individuals (potentially $1,400)
  • Creation of a national vaccination program

The Build Back Better Recovery Plan includes:

  • Increased emphasis on infrastructure and manufacturing improvements
  • Focus on innovation, research, development and clean energy
  • Investment in skills, training, and caregiving

Meade says increasing the minimum wage now would only create more economic pain for employers trying to recover their losses, and for employees looking for jobs.

“Calling for such a dramatic increase in the federal minimum wage at this time, in the midst of a pandemic when businesses are reeling, doesn’t make for good public policy,” she says.

There also might be challenges related to the administration’s regulatory agenda, particularly if it restores Obama-era regulations related to Joint Employer and Overtime rules, she adds.

Efforts that could impact workplace policies include:

  • Creating an OSHA COVID-19 emergency protection standard
  • Re-establishing the expansive Joint Employer Standard under the National Labor Relations Act and Fair Labor Standards Act
  • Revising the federal Overtime Rule to increase the minimum salary threshold and/or the “duties” test
  • Reversing the Trump administration’s tip-credit rule
  • Revising/expanding the Family Medical Leave Act

Still, she notes, opportunities are in sight. They include:

  • Expanding workforce training and strengthening the Registered Apprenticeship Program
  • Expanding funding and opportunities for Second Chance hiring
  • Immigration reform that protects ‘Dreamers’
  • Visa worker program reform

“There are going to be some key pieces we endorse and fully support, including workforce development initiatives,” she says. “A lot needs to be done in the aftermath of COVID-19—our registered apprenticeships, second chance hiring, and immigration reform. There’s a tremendous opportunity to get some of our immigration priorities resolved and make some great progress.”