Federal Legislative Update

Senate Budget Resolution Votes:

After a long night/morning, the Senate just concluded its “vote-a-rama” on the budget resolution.  Rather than setting policy, vote-a-rama largely consists of symbolic messaging votes. While typically non-binding, they can shed light on Senators’ positions on key policy issues, or attempt to place them on the record in support of a position or approach, which can be highlighted subsequently if they deviate.  While there are numerous votes that took place, following are some of particular interest to restaurants:

• RESTAURANTS Act – The Senate passed, 90-10, Senators Roger Wicker (R-MO) and Kyrsten Sinema’s (D-AZ) amendment calling for the creation of a grant fund for food service and drinking establishments affected by the COVID-19 Pandemic.  The strong vote reflected the Senate’s interest in providing targeted grant relief for our industry.  We worked closely with the Senators on the amendment and in garnering support for its passage.  Additionally, we have collaborated with the Senators and Representatives Earl Blumenauer (D-OR) and Brian Fitzpatrick (R-PA) on a unified Senate/House RESTAURANTS Act, which we anticipate being introduced later today in the respective chambers.

• Minimum Wage – Senator Joni Ernst (R-IA) – Ernst sought a vote on her amendment to prevent an increase in the minimum wage to $15/hr. during a pandemic.  She spoke about restaurants, child care, and others, in the process, and how a one size fits all wage is the wrong approach, because the wage for NY and CA may not work for states like hers.  Budget Committee Chair Bernie Sanders (D-VT) responded about the need to increase the existing “starvation wage,” and highlighted that the minimum wage hasn’t risen since 2007.  He stressed that he will do everything in his power to put the Raise the Wage Act into a reconciliation bill.  Then, in a surprising twist, he stated that because his bill wouldn’t raise wages to $15/hr. during the pandemic, it would phase them in over five years, he supported her amendment…It was voice voted and passed.

• Minimum Wage – Tip Credit – Republican amendments were filed, that were targeted at messaging opposition to eliminating the tip credit.  While we worked diligently to secure commitments from Democratic Senators to support such an amendment, if voted upon, it ultimately wasn’t. While a vote didn’t occur, the exercise had extensive value, further elevating the issue with key Democratic Senators, who will be pivoting to the conversation in the context of a budget reconciliation bill.

• No-Tax Increases on Small Businesses During a Pandemic – All 100 Senators supported an amendment by Senators Marco Rubio (R-FL) and Tim Scott (R-SC) opposing tax increases on small businesses during a pandemic.  Republicans are messaging that this should dissuade Democrats from using budget gimmicks – like eliminating tax deductions for businesses that pay lower wage rates – in an attempt to overcome procedural hurdles in attaching a minimum wage increase to a budget reconciliation bill.

• We will continue to work aggressively on the minimum wage/tip wage issues and keep you informed as things progress.  Attached are issue briefs and background in opposition to the Raise the Wage Act and the elimination of the tip credit.

• Cortez Masto – Hospitality and Jobs Recovery – Cortez Masto’s amendment – to expand support for Americans in relation to their employment in hospitality – passed by a voice vote.  This vote was geared toward increasing support for her Hospitality and Commerce Job Recovery Act.

As a reminder, the budget resolution votes are typically non-binding, so they should not be interpreted as setting or precluding certain policies.  But, as mentioned above, in some instances they can help frame future conversations on policies and on what should/shouldn’t be included into a reconciliation package or future pieces of legislation.

The Senate passed the budget resolution, along party lines, advancing Senate Democrats’ drive toward assembling a budget reconciliation bill.

Protecting the Right to Organize Act (PRO Act):

Senate HELP Committee Chair Patty Murray (D-WA) and House Education and Labor Committee Chair Bobby Scott (D-VA) have reintroduced the PRO Act.  The legislation contains over a dozen provisions that would substantially alter settled federal labor law and cause further damage to the economy struggling to recover from the pandemic.  Together with our colleagues in our Coalition for a Democratic Workplace (CDW), we aggressively opposed the legislation in the last Congress, and will continue in this Congressional session.  Attached is our press statement and CDW opposition letter. 

Senate HELP Committee Hearing on the Nomination of Marty Walsh for Secretary of Labor:

The Senate HELP Committee held a hearing on Marty Walsh’s nomination to serve as Secretary of Labor.  The hearing was balanced, largely avoiding politically charged opposition and fireworks.  As expected, Walsh did not offer specific policy prescriptions and portrayed himself as a “consensus builder” who wants to hear from all sides of the regulated community.  He was asked direct questions on some of our key priorities, including the $15 minimum wage; elimination of the tip credit; and the PRO Act. 

Senator Roger Marshall (R-KS) noted that costs of living across the country vary greatly and that a $7.25/hr. minimum wage, in his hometown, would be equivalent to a $16/hr. minimum wage in Boston, adding that a $15/hr. federal minimum wage would kill jobs in Kansas. Mayor Walsh replied that he supports a $15/hr. minimum wage, but acknowledges that “there will need to be many conversations in Congress before it is passed, including the best way to institute it.”

Regarding the tip wage, Senator Mike Braun (R-IN) referred to restaurants as the most devastated industry during the pandemic and criticized Democratic proposals to take away tips favored by servers and bartenders.  He suggested that the tip credit allows these workers to “exceed the minimum wage.”  Walsh replied that he has talked to many Boston restaurant owners, since the pandemic, “would like to continue the conversation on tips,” and wants to “talk more offline on working toward a resolution.” 

Senator Tim Scott passionately criticized the PRO Act, asserting that it would be devastating for America’s workforce, asking Walsh to talk to both sides of the aisle before moving forward with the PRO Act.  Walsh committed to do so. Senator Scott also criticized raising the minimum wage to $15/hr. given regional economic disparities. 

Chair Patty Murray (D-WA) asked Mayor Walsh for his priorities in respect to job training and apprenticeships. Mayor Walsh responded that we need to continue to invest in recovery and that President Biden’s Build Back Better plan will require significant investment in workforce development. Mayor Walsh also said that we need to look at ways to return older Americans back to the workforce.

U.S. Department of Labor (DOL) to Delay Trump Tip Credit Final Rule:

As anticipated, the DOL is seeking to push back the effective date for the tip credit rule – which had an original effective date of  March 1, 2020 – to April 30, 2020 and is seeking public comment on the delay.  In a notice to be filed in the Federal Register, set to be published on Friday, the DOL's Wage and Hour Division contended that the proposed delay of the Tip Regulations under the Fair Labor Standards Act is necessary so the Administration can review the regulations. The Association will file comments opposing the delay.