Operations

How Will President-Elect Joe Biden’s Policies Affect the Restaurant Industry?

The constitutional provisions, first implemented in the 1700s, were designed to create checks and balances in the executive and legislative branches. Congress took the lead with the executive branch taking the back seat. As our world formed and changed, the balance of power shifted dramatically.

Executive orders became the means of bypassing stalemates between Congress and the Presidency. Between 2017 and 2020, President Donald Trump issued 195 executive orders, a number that pales in comparison to the all-time high of Franklin D. Roosevelt at 3,721.

A new sheriff is coming to town, and that person and their policies will, for better or worse, affect the restaurant industry, as well as many others. It’s unclear yet how President-elect Biden will use this power, but this we do know: from COVID-19 regulations to minimum wage and immigration, change is in the air.

COVID-19 Policies

President-elect Joe Biden has made it clear that one of his top priorities is coming together as a nation to stop the current escalation of COVID-19 and “flatten the curve.” For those of you who have gotten out your history books, you know that the Spanish flu pandemic of 1918 came in “four waves.”  While this novel virus occurred in an era devoid of the tremendous medical technological advances of our current age, a warning bell emerges as the second wave of our current pandemic takes hold around the world.

The president-elect’s plan includes a federal mask mandate, expanded testing and contact tracing efforts, and taking calculated steps in an effort to avoid a full shutdown. These steps include stricter sanitation guidelines from OSHA and a doubling up of the number of their investigators. “Restart packages” are in the pipelines, funding that will help restaurants and other companies cover the costs of implementing pandemic safety precautions such as PPE and plexiglass.

According to the Biden-Harris “Build Back Better” plan, “President-elect Biden will direct the CDC to provide specific evidence-based guidelines for how to turn the dial-up or down relative to the level of risk and degree of viral spread in a community, including when to open or close certain businesses, bars, restaurants, and other spaces…”

Businesses and Employees

The Biden-Harris plan includes creating millions of good-paying jobs and making it easier for workers to organize unions. He also intends to promote higher wages and stronger benefits which includes legislation for universal paid sick days and 12 weeks of paid family and medical leave.

One of his policies presenting the greatest possible impact is his support for raising the national minimum wage to $15 an hour and ending the tipped minimum hourly wage of $2.13. The National Restaurant Association has argued that this increase would harm an industry already weighed down by thin margins and the burden of the pandemic.

Of course, many states and cities have already implemented rising minimum wages. California’s $15 minimum wage is set to go into effect in 2022 for those employers with 26 or more employees. Connecticut and Massachusetts follow suit in 2023, New Jersey one year later, and Illinois and Maryland by 2025.

The president-elect has also supported “fair and flexible” scheduling that requires businesses to provide employees with predictable shifts.

For small businesses and entrepreneurs, he presented the “comeback package,” funding that would help small businesses recover and get back on their feet. His racial equality plan includes providing small business opportunities for communities of color, neighborhoods that have been particularly heavy hit by the pandemic, leading to business closures and high unemployment rates.

Larger corporations and chains are looking at increased taxes. According to the plan, “President-elect Biden is working to ensure that corporate America finally pays their fair share in taxes…” Under Trump, large companies such as restaurant chains received a sharp reduction in tax rates with some falling from 35 percent to 21 percent. His 2018 tax reform ended up creating loopholes that allowed major corporations such as Amazon to pay $0 in taxes.

Immigration

It’s clear that Biden’s views on immigration cross a great divide when compared to Trump’s policies. His immigration policies include an understanding that key sectors of the U.S. economy rely on working-age immigrants.

As president, Biden will “take urgent action to undo Trump’s damage.” This includes modernizing the system, reforming temporary visa programs, welcoming immigrants, and recommitting to asylum-seekers and refugees.

Before the pandemic struck, many in the restaurant industry, as well as seasonal resorts, counted on recruiting international workers to fill positions. It appears that this administration will reduce regulations in this area, making the process easier.

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