Restaurant Industry InsightsRestaurant Law

Policies and Changing Legislation Affecting the Restaurant Industry

The National Restaurant Association serves as an advocate for restaurants as legislators look to tighten or change regulations that affect the industry’s safety and economic livelihood. The following represent the restaurant policies the Association is currently involved with and how the outcomes may affect restaurants across the nation.

The Employee Retention Tax Credit

This COVID-10 relief measure, known as ERTC, went into effect on March 27, 2020, encouraging employers to keep employees on the payroll despite the challenges brought on by COVID-19. It enabled employers to claim a tax credit of up to 50 percent for up to $10,000 in wages. 

The program, originally scheduled to end on December 31, 2021, was cut short, ending on November 5, 2021, due to the Infrastructure Investment and Jobs Act. The Association reached out to Congress to expedite the processing of claims and alerted restaurants.

Currently, the IRS is reviewing claims for compliance concerns. This includes audit work and criminal investigations on businesses filing false claims. Businesses that filed a claim in error and received payments may participate in the IRS Voluntary Disclosure Program, which runs through March 22, 2024. This program allows repayment of 80 percent of the claim received without penalty. 

Essential Workers for Economic Advancement Act 

According to the Association, over 15 million people work in the restaurant and food service industry, which employs more minority managers and females than any other. The industry is also facing an ongoing workforce shortage.

The EWEA was introduced on May 25, 2023, and would create a new H-2C nonimmigrant visa for people coming to the U.S. to work in nonagricultural, less-skilled positions. Rep. Smucker (R-Pennsylvania) introduced the bill in an attempt to help alleviate workforce shortages in industries like construction and hospitality. 

The EWEA would increase the workforce and help restaurants fill vacancies by connecting prospective workers and providing them with valuable training and experience. 

Immigration Reform

The Association reports that restaurants over the next decade will create more jobs and need more employers than the U.S.-born workforce can fill. It’s estimated that positions will grow by 14 percent, but the workforce will only increase by 10 percent. Because of this, the Association is supporting immigration reforms that improve the ability to hire.

Some of their prospective policies include providing a pathway to legalization. Over 11 million undocumented workers contribute to the economy and pay taxes and should have a clear path to obtaining legal status in the country. 

They also support a temporary worker visa program that matches workers and employers, and a national standard for verifying and hiring. 

Natural Gas Bans

The association is monitoring laws banning the use of natural gas and state laws stopping local jurisdictions from implementing bans. While they stand by eco-friendly environmental legislation, they believe banning natural gas would pose a serious threat to restaurants, including degrading the quality of food, affecting their ability to operate their outdoor dining areas, and increasing operating costs. 

According to the Cato Institute, a public policy think tank, a natural gas ban would have virtually no effect on global climate change. The Natural Resources Defense Council (NRDC) disagrees, believing it is a major contributor to air and water pollution as well as climate change.

Reducing Credit Card Transaction Fees

Credit card processing fees have more than doubled over the last 10 years and are a significant operating expense for restaurants. According to the National Restaurant Association, only two credit card companies control 80% of the processing market. 

For this reason, they support the Credit Card Competition Act, which would increase competition and, as a result, drive down swipe fees while improving security. It’s estimated that enhancing competition would save businesses and consumers about $15 billion every year. 

Maintaining the Tip Credit

Another of their continued efforts is preserving the tip credit. Operators, employees, and customers support the existing tipping system as it helps staff earn a median of $27 per hour. According to the Employment Policies Institute, ending the tip credit results in pay cuts, not raises.

Those are just some of the policies the National Restaurant Association is currently working on. As you can imagine, the policies and laws affecting restaurants are vast, and keeping up with them takes an organization committed to the industry.

At EMERGING, we stay abreast of the changing legal landscape to provide our clients with up-to-date information and strategies regarding labor, the supply chain, real estate, and finance. To learn more about identifying opportunities for long-term growth and excellence in the industry, contact EMERGING.

  • Subscribe to our latest insights


Are you capital raise ready?