The American Rescue Plan Act of 2021 (the “Act”), signed by President Biden on March 11, 2021, includes within Section 5003 a $28.6 billion appropriation to establish a Restaurant Revitalization Fund (the “RRF”) to provide tax-free federal grants to food and beverage businesses hard hit by the pandemic. These grants may be applied to eligible expenses already incurred and for additional expenses over the remainder of the year (or longer if the covered period is extended by the Small Business Administration (the “SBA”)), and are available to entities ranging from food carts to full-service restaurants and tasting rooms. While RRF applications are not yet available and further guidance is likely forthcoming, we would encourage any entity that hopes to qualify for an RRF grant to take certain steps in preparation, as described further below.

Summary of the RRF and Eligibility

A total of $5 billion of the RRF is set aside for businesses with less than $500,000 in 2019 annual gross receipts, with the remainder to be available for grants in an “equitable manner to eligible entities of different sizes,” with authority granted to the Administrator of the SBA to make adjustments to the distribution of funds based on demand and local market conditions affecting eligible entities.

An eligible grant recipient may be a “restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink.” Entities that are not eligible for RRF grants include entities that (i) are operated by state or local government, (ii) as of March 13, 2020, owned or operated, together with any affiliated business, more than 20 locations (regardless of whether the entities share a common name), (iii) have a pending application for or have received a Shuttered Venue Operators Grant, or (iv) are a “publicly-traded company” (here meaning any entity that is majority owned or controlled by an entity that is an issuer, the securities of which are listed on a national securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. § 78f)).

The term “affiliated business” means a business in which an eligible entity has an equity or right to profit distributions of not less than 50 percent, or in which an eligible entity has the contractual authority to control the direction of the business, provided that such affiliation shall be determined as of any arrangements or agreements in existence as of March 13, 2020.
Continue Reading The Restaurant Revitalization Fund Eligibility and Next Steps

After a lengthy and contentious rulemaking process, the Department of Labor (“DOL”) published its final rule revising its tipped-employee regulations under the Fair Labor Standards Act (“FLSA”) last week. The new rules take effect 60 days from their publication in the Federal Register, which will occur shortly.  Here is a summary of the new rules’ most critical provisions:

Tip Credit Provisions. Several provisions of the new rules address the FLSA’s tip credit provision, which allows employers to pay employees a base wage that is less than the federal minimum so long as the sum of employees’ cash wages and retained tips exceed the required threshold.  For example, the rules state that employers that take the FLSA tip credit may not include back-of-the-house employees in their tip pools and address the common scenario in which an employee works in dual jobs (one tip-qualifying, the other non-tip-qualifying) for the same employer.  Oregon and Washington do not allow a tip credit against employers’ minimum wage obligations, so these aspects of the new rules are of limited use for Oregon and Washington employers.
Continue Reading Department of Labor Publishes Final Rule Regarding Tip Pools and Tip Credits

Stoel Rives is a proud annual sponsor of the Washington Wine Industry Foundation (and full disclosure: I am a board member) – a nonprofit, charitable organization that was founded almost twenty years ago with a goal to strengthen the future of the Washington wine industry through growth, education, and sustainability.

Since 2002, the foundation has