The restaurant industry is subject to many regulations, and there is new legislation consistently being introduced which affects restaurant owners, employees, and customers. VRLTA is active in understanding and assessing the issues that impact the industry, and takes a lead role in advocating with Virginia legislators to help them understand the issues and support views that are beneficial to Virginia restaurants.
Alcoholic Beverage Control
ABC LICENSES: VRLTA supports limiting ABC licenses for on-premises consumption of alcoholic beverages to those establishments that meet the State Health Department and Virginia ABC Board requirements for a restaurant (e.g., operating kitchen, menu, minimum food sales). All ABC requirements for minimum food sales should be strictly and equally enforced.
HAPPY HOUR ADVERTISING: VRLTA supports developing reasonable regulations that allow the advertising of happy hours.
DELIVERY: VRLTA is monitoring any effort to regulate the delivery of alcohol to establishments and supports reasonable regulations.
DISTILLED SPIRITS: VRLTA opposes the continued price increases on distilled spirits sold to Virginia’s mixed beverage licensees (restaurants, hotels and caterers). The mark-up on distilled spirits is a discriminatory tax on the Commonwealth’s hospitality industry. VRLTA supports wholesale pricing for licensees.
DRAM SHOP: VRLTA opposes Dram Shop and all legislation that places third party liability upon hospitality establishments’ owners and operators.
Menu Labeling/ Restaurant Grading
MENU LABELING: VRLTA opposes any state or locally imposed requirement that food content, calorie and/or other nutritional information be displayed on a restaurant menu or otherwise within the retail premises.
RESTAURANT GRADING: VRLTA opposes all efforts to establish a grading system for restaurants.
BOTTLE BILL: VRLTA opposes any requirement that imposes the burden and cost on retailers to recycle beverage containers
RECYCLED MATERIALS: VRLTA supports the use of degradable materials when economically feasible; however, VRLTA opposes any mandatory requirements relating to paper or plastic products, including any ban on the use of such materials as plastic straws, plastic bags or styrofoam containers.
ACCELERATED SALES TAX: VRLTA opposes the imposition of the accelerated sales tax payment, a policy which places an undue burden on hospitality and travel businesses.
DEALER DISCOUNT: VRLTA supports the restoration of the dealer discount that compensates retailers for the costs associated with the collection and remittance of the state and local tax.
DILLON RULE: VRLTA supports the Dillon Rule and opposes granting counties, or other entities, the same taxing authority as cities and towns.
MEALS TAXES: VRLTA opposes meals tax because it discriminates against one industry. Furthermore, VRLTA supports full transparency when conveying to the general public the total tax being charged for the sale of prepared food. VRLTA supports legislation that would require cities and towns to pass a referendum before being permitted to further increase the meals tax within that locality.
MEALS TAX REFERENDA: VRLTA supports efforts to require counties to wait a specific period of time (minimum three years) between referenda seeking to establish or increase a meals tax.
Tipped Employees Support the Existing Tipping System
- The most important aspect of tipping, is that servers support the existing system. Tipping provides an incentive for exceptional customer service and creates major earning potential for tipped employees.
- According to a recent National Restaurant Association survey of 529 full-service restaurant operators with tipped employees, the median hourly earnings of entry-level servers is $19 an hour, while the median hourly earnings of more experienced servers is $25 an hour. In this data, the upper quartile for more experienced servers is $38 per hour.
- When attempts were made to eliminate the tip credit in Maine, Michigan, and the District of Columbia, tipped employees rallied to preserve the tip credit and the existing tipping system. In all three jurisdictions, lawmakers listened to those workers and preserved the tip credit.
- Some restaurants voluntarily tried to eliminate tipping and go to the “one fair wage” model, but several have gone back to the tipping system because their best employees earned less money and left.
The Tip Credit Guarantees Employees the Minimum Wage, but Many Earn Much More
- No tipped employee can ever legally earn less than the minimum wage, period. Tipped employees must earn at least $7.25 per hour (or the relevant local/state minimum wage) through a combination of the direct cash wage from their employer and the tips they earn. If the combination of the direct cash wage and tips does not equal or exceed the minimum wage, the restaurant must compensate the tipped employee to make up the difference.
- While the existing tip credit system guarantees that tipped employees make at least the relevant minimum wage, most earn between $19 and $25 per hour.
- There are serious penalties for restaurants that fail to follow the legal requirements that guarantee tipped employees at least the minimum wage.
No State Has Eliminated the Tip Credit in More Than a Decade
- The vast majority of states have a tip credit--only seven states do not have a tip credit, and none of those states have eliminated the tip credit in the last decade.
- When there were recent attempts to eliminate the tip credit in Maine, Michigan, and the District of Columbia, lawmakers quickly took action to preserve it.
The Tip Credit Has Bipartisan Support
- During the past several years, lawmakers on both sides of the aisle have listened to tipped workers and have taken action to preserve the tip credit when it has been in jeopardy.
Eliminating the Tip Credit Would Negatively Impact Employees, Customers, and Restaurants
- If the tip credit is removed, many restaurants will eliminate tipping and move to an hourly wage system. Under that scenario, tipped employees would likely earn less than they currently do.
- Restaurants would face significantly higher labor costs and many could be forced to reduce employee hours or operate with fewer employees.
- If the tip credit is removed, your favorite restaurants would see major increases in their labor costs. The increase, combined with rising food costs, regulatory compliance costs, and others costs of doing business would make it harder for independent restaurants to succeed and stay in business.
- Sadly, independent neighborhood restaurants would struggle the most to succeed in such an environment.
- Tipping incentivizes the high-quality guest service that is a hallmark of the U.S. restaurant industry. Eliminating the tip credit and the existing tipping system would reduce the incentive to provide great service.
TOBACCO AND ELECTRONIC CIGARETTES (VAPING): VRLTA supports a statewide ban on tobacco smoking and vaping in public spaces which provides for no exceptions that could create an inequitable competitive environment among affected businesses.
Tort Reform and Liability
ADA ‘DRIVE-BY’ LAWSUITS: VRLTA supports federal and state efforts to protect businesses from burdensome ‘drive-by’ lawsuits brought under the ADA act; VRLTA supports the passing of legislation that would allow a ‘notice and cure’ provision to address deficiencies in accessing or utilizing a business under the ADA.
INCREASED RESTRICTIONS: VRLTA opposes efforts to increase impose unreasonable restrictions (i.e. zoning, licensing, etc.) upon hospitality establishments’ owners or operators by localities’ alleging problems with customer activities surrounding property.
TORT REFORM: VRLTA supports limits on punitive damages and joint and several liabilities.
EDUCATION: VRLTA supports rigorous tourism, hospitality, and culinary curriculum curricula with increased funding and support for career and technical education. VRLTA supports strategies of graduation and student accreditation that ensures all high school graduates are college and workforce ready.
HEALTH CARE: VRLTA supports efforts to make employer-sponsored health care coverage more affordable for employers and their employees, such as through Association Health Plans.
IMMIGRATION: VRLTA supports reasonable efforts to ensure that businesses do not employ illegal aliens; however, VRLTA opposes any requirements that place an undue burden on businesses to enforce immigration laws or that otherwise impose penalties on employers that make a good-faith effort to comply with such laws. VRLTA also supports the continued viability of the H2-B and J1-Visa programs.
MINIMUM WAGE: VRLTA supports and accepts the federally mandated minimum wage as the statewide minimum wage requirement and opposes any efforts to give jurisdictions the authority to impose a minimum wage greater than the federal guideline.
TIPPED WAGE/ TIP CREDIT: VRLTA opposes efforts to reduce or eliminate the tipped credit. Tip credit should increase dollar for dollar with any increase in the minimum wage
MANDATORY PAID LEAVE: VRLTA maintains that it is in the best interest of every business to provide the best benefits to their employees that they can afford, and opposes any effort to mandate that employers provide employees paid leave.
RIGHT-TO-WORK: VRLTA supports the right of all employees to work without mandatory membership in a labor union
WORKFORCE DEVELOPMENT: VRLTA supports the efforts of K-12 public schools, institutions of higher education and career and technical programs across the Commonwealth to prepare Virginians to enter the workforce with the necessary knowledge and skills for success.
PREDICTIVE SCHEDULING: VRLTA believes that government intervention in the scheduling of employees through a one-size-fits-all approach intrudes on the employer-employee relationship and creates unnecessary mandates on how a business should operate.