Restaurant Industry Insights

How the Latest Regulations Are Changing the Restaurant Landscape

For better or worse, politicians have been busy passing legislation that affects the restaurant industry. From the state to the national level, several laws and regulations have gone or are going into effect in the coming year. 

These significant policy changes affect everything from labor to food safety and delivery. Let’s review some of the latest decisions from today’s policymakers. Even those that are state-specific tend to ultimately affect the broader arena.

New York’s Delivery Wage

New York has been at the forefront of challenging third-party delivery services. New York’s proposed delivery worker wage started at a targeted $23.82 per hour by 2025. Despite Grubhub, DoorDash, and Uber’s temporary injunction, the hourly wage for delivery workers made it through the courts and landed at $17.96.

California’s AB 1228 Fast Food Wage

What started as AB 257, the $22 per hour wage for fast food workers and broad regulatory powers, faced a massive pushback that resulted in the compromise known as AB 1228. This $20 minimum wage for fast food workers goes into effect on April 1 and affects chains with more than 60 units.

In response, Pizza Hut franchises in California are eliminating staff delivery driver positions, resulting in about 1,200 lost jobs. Chipotle and McDonald’s are raising menu prices.

California’s Health and Safety Code

The Golden State has been busy with regulations. SB 476 requires the employers of restaurant workers to pay for obtaining their food handler card, a requirement that must be met within 30 days of hire. This includes the cost of the course and the time it takes to complete it. 

Eliminating the Tip Credit Option

According to the National Restaurant Association, the tip credit helps tipped workers earn a median hourly wage of $27, with some making as much as $41.50 an hour. Eliminating this forces operators to adopt an hourly wage system, ultimately reducing employee earnings in many instances. 

Despite this, Chicago eliminated the tipped minimum wage. This progressive elimination starts by capping the tip credit at 40% of the minimum wage and continues reducing it until 2028 when it’s eliminated.

Residents in Washington, D.C., overwhelmingly passed Initiative 82 in November 2022. This initiative eliminates the tipped credit by 2027 when employees will earn the current minimum wage of $17 per hour. 

Ohio also has a bill, SB 146, introduced in 2023 to raise Ohio’s minimum wage and end the tipped employee minimum wage. 

Outdoor Dining Extension

Many states and regions lent a helping hand to restaurants during the pandemic by allowing outdoor dining. California extended that ability, allowing outdoor, patio, and al fresco dining until July 1, 2026.

Alcohol-Related Legislation

Five states made the temporary alcohol-to-go drink privileges that emerged during the pandemic permanent. These states joined the other 21 states that have already transitioned from temporary to permanent. These include Connecticut, Hawaii, Maine, Michigan, and Washington.

Dram Shop Liability refers to establishments serving intoxicated customers alcohol and their liability should the customer harm another party. Three states modified these laws due to the shockingly high liability insurance costs nationwide. The three states are Alabama, Montana, and Utah.

Several states also lowered the age to serve alcohol due to labor shortages. Workers can now serve alcohol in Kentucky at age 18, Michigan at 17, and Iowa at 16.

As you can see, it’s been a busy year, with many additional regulations slowly making their way through the legal landscape. Keeping up to date with these regulations and laws is nothing if not challenging. To ensure compliance, check with state and local authorities to make sure you’re aware of any changing laws, giving yourself time to adopt them. 

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