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BPAA Federal Policy Update - July 9, 2021

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Small Business Funding

 

  • Restaurant Revitalization Fund is closed, portal will be disabled July 14 The Small Business Administration closed the Restaurant Revitalization Fund Wednesday, the agency wrote to RRF recipients in an email viewed by Restaurant Dive. Applicants who didn't receive funding as of Wednesday will have their applications held within the application platform to allow for processing in the order received if the fund is refilled by Congress. 
  • The SBA will disable access to RRF's portal on July 14. Until then, applicants can continue to check their status, address payment corrections and ask questions. The SBA closed the RRF to new applications on May 24. 
  • Lawmakers, along with the National Restaurant Association and Independent Restaurant Coalition, are pushing for the fund to be refilled with $60 billion. This amount is more than double the fund's allotment of $28.6 billion. More than 265,000 restaurant operators applied for the RRF's federal relief but did not receive funding, according to the SBA. Read more at Restaurant Dive here.

 

  • Potential Replenishment of the Restaurant Revitalization Fund The Restaurant Revitalization Fund Replenishment Act of 2021 (RRFRA) was proposed on June 10 by a bipartisan group of lawmakers in the House and Senate to provide an additional $60 billion for the RRF. According to the SBA, restaurant operators that did not get grants the first time around will automatically be eligible for the new funds if they have an application and the necessary documentation on file. Read more about the bill here.

 

  • More than 100,000 restaurants received relief grants, but 265,000 were turned away. More than 370,000 restaurants applied for more than $75 billion in funding from the Restaurant Revitalization Fund, nearly three times what the program had available. Around 105,000 businesses were approved for grants, which averaged just over $272,000.
  • The Small Business Administration, which runs the Restaurant Revitalization Fund, told unsuccessful applicants in an email that it was unable to fund all qualified applications because of “overwhelming demand.”
  • The restaurant fund, which opened in May, started off smoothly but was mired in turmoil in its final weeks, with thousands of grants rescinded because of policy changes and thousands more stalled by delays and glitches. Applicants awaiting decisions grew increasingly desperate as the remaining funding dwindled, Stacy Cowley reports for The New York Times.

 

More Restaurants Have Their Restaurant Revitalization Fund Awards Rescinded Another group of restaurant owners were informed this week that their Restaurant Revitalization Fund (RRF) award grants were rescinded amid court judgments that found that the way the U.S. Small Business Administration awarded the funds were discriminatory. A number of posters to Reddit forums noted that they received letters saying their awards were rescinded. The National Restaurant Association was able to confirm that the SBA, which administers the fund, sent letters to additional restaurants this week. Read more at Restaurant Business.

 

Congress

  • House Appropriators Are Halfway Through Markups House appropriators have advanced half of their fiscal 2022 spending bills out of committee, but still face fundamental partisan differences on funding totals and policy measures.
  • The House Appropriations Committee advanced its State-Foreign Operations bill and its Interior-Environment bill yesterday. Appropriators had advanced their Legislative Branch, Financial Services-General Government, Agriculture-FDA, and Military Construction-VA bills earlier in the week.
  • Republicans have criticized the Democrats’ spending levels, saying the $9.9 billion increase for the Department of Defense spending bill is too low and the nondefense discretionary figures are too high.
  • The bills “are completely misguided,” Rep. Kay Granger (R-Texas), ranking member of the House Appropriations Committee, said at a Wednesday markup. “The increases proposed for nondefense bills are just too high, and the funding for our nation’s defense is too low to meet the security challenges we face worldwide.”
  • Searching for a Plan to Raise Debt Limit: With a month to go before a suspension of the federal debt ceiling runs out, Congress lacks a clear plan to raise it, even as the majority Democrats express confidence that a payments default will be avoided, Bloomberg News’ Erik Wasson reports.
  • “We’re considering all the options,” Speaker Nancy Pelosi (D-Calif.) said in a brief interview yesterday when asked about her legislative strategy.
  • One option being discussed by Democrats is to raise the debt ceiling using the same so-called budget reconciliation package they plan to use to enact most of Biden’s $4 trillion, longer-term economic agenda. That package needs just a simple majority to pass in the Senate, thereby bypassing a Republican filibuster, but it may not be ready for final votes until September or October. Another option is to use the budget reconciliation process to set up a stand-alone bill to boost the debt ceiling.

CBO Predicts $3 Trillion Deficit in 2021: The U.S. will see a $3 trillion budget deficit this year, close to the 2020 record, while the economy will expand notably more than previously forecast, the Congressional Budget Office said as it incorporated the impact of Biden’s Covid-19 relief program, Bloomberg News’ Katia Dmitrieva reports.

Unemployment & Labor

 

  • Workers Would Gain Leverage to Sue Restaurants in DOL Proposal The U.S. Labor Department proposed reinstating a longstanding policy, revoked late in the Trump administration, that would require restaurants to pay tipped workers a higher minimum wage when they’re performing work that doesn’t directly generate gratuities. The regulation, proposed Monday, holds that when tipped employees, such as servers and bartenders, spend at least 20% of their workweek on duties that support their occupation but don’t produce tips—such as rolling silverware into napkins or cleaning—they’re entitled to the full minimum wage of $7.25 an hour, rather than the pay floor of $2.13 that’s reserved for workers who regularly earn tips. The same terms would apply when side-tasks are performed for at least 30 continuous minutes, DOL said. That interpretation, sometimes called the “80/20" rule, has triggered a wave of plaintiff lawsuits and class actions alleging that restaurant chains owe employees back pay for time spent on side work that’s separate from serving customers, for which they were paid less than $7.25 per hour. Read More at Bloomberg

 

  • DOL proposal would resurrect 80/20 rule for tipped workers who perform untipped work The U.S. Department of Labor announced Monday a rule withdrawing and re-proposing a portion of a Trump administration 2020 final rule regarding tip pool regulations under the Fair Labor Standards Act.
  • The proposal aims to address situations in which an employee performs both tipped and untipped work, also known as a "dual job." Under the proposed rule, employers would only be able to take a tip credit if their tipped employees performed work that is part of the employee's tipped occupation.
  • Such work would include work that produces tips as well as work that "directly supports" tip-producing work, DOL said, provided the supporting work is not performed for a "substantial amount of time." Work that supports tip-producing work is performed for a substantial amount of time if it either exceeds, in the aggregate, 20% of the employee's hours during the workweek, or is performed for a continuous period of time exceeding 30 minutes. Read more here for Dive Insight.

 

  • U.S. Employment Accelerated in June Rebound The U.S. unemployment rate rose to 5.9% in June, a 0.1 percentage point increase from the previous month, as the labor market added 850,000 jobs. Most of the job gains continue to be concentrated in the leisure and hospitality sectors. About 6.8 million fewer people are employed than before the pandemic, and the labor force participation rate hasn’t changed significantly since June 2020. Jobless rates increased across all racial groups in June, though Black and Hispanic unemployment remain the highest at 9.2% and 7.4% respectively.
  • Pandemic unemployment programs are slated to expire Sept. 6 and at least 25 states, all Republican-led, have ended or will end certain benefits sooner, such as the $300 additional weekly payment.
  • Republican and some Democratic lawmakers have indicated they’re unlikely to support extending the enhanced weekly payment. President Joe Biden said the administration would work with Congress to tie automatic jobless benefits to economic conditions in his proposed American Families Plan. Read more at Bloomberg.

 

  • Dueling Paid Leave Fly-Ins: Advocates on either side of the debate over paid leave are holding dueling fly-ins this week to lobby lawmakers. Groups like the National Partnership for Women & Families and Paid Leave for All have arranged for companies including Patagonia, Spotify, Rent the Runway and Salesforce to meet with lawmakers. The National Federation of Independent Businesses, which has testified in committee against a national paid leave program, is holding its annual fly-in at the same time.
  • Let’s Talk Child Care: Biden’s “soft” infrastructure bill, the American Families Plan, would set aside more than $225 billion for child care — an investment that economist Abby McCloskey argued in POLITICO Magazine last week would align with conservative values. Let’s continue the conversation: I’ll be live on Twitter Spaces with McCloskey and Laura Dallas McSorley, the early childhood policy director at the Center for American Progress, today at 1 p.m. ET to chat about expanding federal support for childcare. Read More at Politico

 

  • Is It A Sluggish Labor Market — Or Workers Positioning Themselves For Better Opportunities? It’s an evolution that everyone saw coming — and yet it still caught corporate America off guard. Labor economists had for years been warning of a looming demographic shift as America’s baby boomers aged out of the workforce, and as a manufacturing-based economy became supplanted by one that held out the promise of more autonomy and greater productivity in knowledge-based sectors. Yet, at the same time, it offered little for workers on the middle and lower rungs of the educational and socioeconomic spectrum other than demoralizing, low-wage and often piecemeal employment. Read More at NBC News

 

  • Biden Boosts OSHA Virus Enforcement as Vaccines Take Hold Five months into the Biden administration, changes are beginning to emerge in how the federal government’s occupational safety agency is enforcing its Covid-19 worker-protection mandates. The Occupational Safety and Health Administration has issued more than three times as many violations of the general duty clause, a provision of federal law, than it did during the Trump administration, according to a Bloomberg Law review of OSHA enforcement data. OSHA also has increased the number of inspections of workplaces where Covid-19 could be a hazard, even if an employer or workers haven’t reported complaints to the agency. Read More at Bloomberg

 

Employee Noncompete Clause Limits Adopted by Three More States Three more states are adopting or amending laws that would limit, if not prevent, businesses from using noncompete provisions to block low-wage workers from jumping to competitors. OregonNevada and Illinois bills passed in the states’ latest legislative sessions aim to blunt the increasingly prevalent practice and could be harbingers of federal regulation to come. The clauses, ostensibly meant to guard employer trade secrets, also hamper workers’ ability to change jobs or find work in the same profession after a layoff. Ten states and the District of Columbia have taken steps to curb the use of noncompetes for low-wage workers in the past five years. Read More at Bloomberg

Tax and Budget

 

  • McConnell Tries to Stall Democrats’ Tax Push Senate Minority Leader Mitch McConnell (R-Ky.) yesterday demanded that Democratic leaders keep a bipartisan infrastructure agreement separate from the White House’s larger tax and spending plans. The White House struck a tentative deal last week with a bipartisan group of senators, but more Republicans would need to back the agreement for it to pass the Senate. The Biden administration is under pressure to also push through trillions in spending and tax hikes on the wealthy and corporations in tandem with the infrastructure bill. Read More at Bloomberg

 

  • Manchin Says He's On Board With Democratic-Only Infrastructure Bill Sen. Joe Manchin (D-W.Va.) said on Tuesday that he's supportive of going forward with a larger, Democratic-only infrastructure bill but that it shouldn't be linked to a separate bipartisan framework. Manchin, during an interview with MSNBC, said that he had been assuming since "day one" that Democrats would have to use reconciliation, a budget process that allows them to bypass a 60-vote legislative filibuster, to pass a larger infrastructure bill because Republicans don't want to make changes to the 2017 tax bill. “We're going to have to work it through reconciliation, which I’ve agreed that that can be done. I just haven’t agreed on the amount, because I haven’t seen everything that everyone is wanting to put in the bill," Manchin said on MSNBC. Read More at The Hill

 

Top Senate Democrat Pushing Forward With Capital Gains Overhaul The chairman of the Senate Finance Committee plans to push ahead with his own plan to alter the way the U.S. taxes unrealized gains on everything from stocks and bonds to real estate and art. In the coming weeks, Sen. Ron Wyden (D-Ore.) will introduce legislation to tax capital assets for wealthier households annually, like income, regardless of whether those assets have been sold or not, his office told Bloomberg Tax. Read More at Bloomberg

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