Executive Directors Report
By Jim Partington, Executive Director
As 2016 comes to a close and we review significant events and achievements the most significant of these are:
ProStart: The National Restaurant Association, Hospitality Education Foundation has changed the criteria for allocation and use of grant funds. These changes require state associations to be more accountable and use the funds in a way that benefits all ProStart Schools. While this change was underway we were fortunate to have Fayrene Hamouz join our staff as a volunteer ProStart Coordinator. Her experience as an educator and contacts in the hospitality industry are making a very positive contribution to improving the quality of support for the ProStart Program and opening the door for additional sponsors. Fayrene’s leadership in improving the quality of ProStart educator training, recruiting additional schools and revising the format for state and regional ProStart Competitions has generated strong support from educators and the hospitality industry. Our goals for this initiative are to provide opportunities for restauranteurs to connect with students in a classroom setting and make them aware of the many opportunities for successful careers in the culinary arts and restaurant management.
The Central Nebraska Chapter of the Nebraska Restaurant Association was officially established last year and our goal is for the chapter to be recognized as the premier advocate for the Central Nebraska Food and Beverage Industry. Membership is open to all food service organizations including restaurants, beverage establishments and private clubs. Chapter leadership will coordinate with the University of Nebraska extension educators, community colleges and other training and educational resources to provide opportunities for cost effective training for the industry in food, alcohol and workplace safety, business management and other related subjects.
Work force development is an issue critical to the future of the industry in the Central Nebraska Region so we will encourage educational institutions to support and coordinate with local high schools in providing interested students opportunities for culinary training and internships.
Brandy Nielson has worked diligently to get this chapter established and accomplishing the goals we have established. The success we have enjoyed so far is a direct result of her excellent planning and communications with members.
The election is over and we have a new president inaugurated in January. I’m sure our members have mixed reactions to the election results depending on political preferences but the key question now is “what next?” for the hospitality industry.
Based on positions taken during the campaign we can expect some relief from the more onerous provisions of the overtime regulations and affordable care act and government agencies will be less aggressive in enforcing a number of regulations.
Nationwide the restaurant industry employs a significant number of immigrant workers – about 10% of the workforce. President Trump’s policies could create worker shortages for employers who depend on migrant labor and temporary visa employees. The impact in Nebraska will vary
depending on location and composition of the employee pool. The effect of these policies will also impact the food processing industry.
In general we can expect a friendly environment for business and less support for labor unions and issues in Washington, DC.
Federal Legislative Issues
Affordable Care Act
The National Restaurant Association, with our support, has urged Congress to make changes in four key areas:
- Bring the ACA’s definition of full-time in line with typical workplace standards
- Simplify and streamline the employer reporting requirements
- Raise the threshold that determines which businesses are treated as “large” under the ACA
- Eliminate the ACA’s auto-enroll mandate that requires some companies to automatically enroll full-time employees in a company health plan
President Trump supported repeal and replacement of ACA during his campaign and is expected to support action by Congress to accomplish this and address these issues.
Fair Labor Standards Act (FLSA) regulations on overtime
The DOL issued a proposal that could dramatically alter the white collar exemptions for overtime pay under the Fair Labor Standards Act that will greatly limit restaurant flexibility and unnecessarily increase costs for businesses across the country.
A recent decision by a Federal Court for the Eastern District of Texas delayed enactment of this regulatory change and we are optimistic that the new administration will act to modify this NLRB action.
For several years, the lack of cooperation and dysfunctional political environment in Washington, DC prevented enactment of any positive legislation on health care, immigration reform and other issues of interest to our members. We are hopeful that a new administration will support legislation to alleviate the burdensome regulatory environment limiting investment and growth in the hospitality industry. It’s up to Congress to cooperate and make the necessary changes.
Nebraska Unicameral Issues 2017
The 2017 legislative session convened Wednesday, January 4 with seventeen new senators. This is the first and “long” session of the two year cycle and will last until early June. As we go to press, the introduction of new legislative bills is not complete but here are some issues that could arise.
Minimum Tip Wage
There was legislation to raise the minimum hourly tip wage in both the 2015 and 2016 sessions. The proposal in the 2016 session, LB1089, was introduced by Senator Hansen and would have increased the minimum tip wage to $3.60/hour starting August 1, 2016 and $4.50/ hour on January 1, 2017. We testified and worked in opposition. LB1089 was not advanced by the Business and Labor Committee and the minimum tip wage remains at $2.13 per hour in Nebraska. This seems to come up nearly every session so it could very well be reintroduced.
Mandatory Server Training
The Nebraska Liquor Control Commission issues a letter each year stating concerns and suggestions of the Commission. This year’s letter states: The Commission believes a statute requiring mandatory server training of employees should be enacted. Having all employees involved in the sale or serving of alcohol and completing a certified training course would enhance the overall safety and welfare of the general public. As this update goes to press, a mandatory training bill has not been introduced but we must be vigilant on this issue.
Increase Sales Tax Collection Allowance
Nebraska restaurants collect and remit sales tax and receive practically nothing for this service. The cost to restaurants is significant – especially on credit card sales since the restaurant is forced to “eat” the credit card swipe fee on the sales tax portion of the charge. Bills have been introduced in past sessions – at our request – to increase the amount Nebraska’s restaurants receive for collecting and remitting sales tax. In the end, the amount it would cost the State of Nebraska was more that we could overcome with the state facing a significant budget shortfall. We will work to fine tune this and get it reconsidered as we believe it is very important to educate the body on this issue each session. This is especially true with term limits as the makeup of the legislature is constantly changing.
Legislation Effecting Nebraska Franchises
We are fortunate to have several Nebraska-based restaurants that engage in franchise agreements. Previously, under Nebraska law an arbitrator or court threw out the entire franchise agreement if the non-compete clause was determined by the arbitrator or court to be unreasonable. This was financially damaging to both the franchisor and franchisee. LB942, introduced by Senator Scheer, brought Nebraska franchise law into conformance with other states and allows the arbitrator or court to reform the clause to make it reasonable, thus keeping the franchise agreement intact. It was advanced by the banking committee, passed by the body and signed by the governor. We do not anticipate further action on this specific franchise issue
but there is interest in legislation next session to clarify in Nebraska law that employees of the franchisee are not employees of the franchisor.