How the Future Changes on Overtime Exemptions Could Affect the Hospitality Industry pg. 3
March 2014 Issue NRA Public Affairs Conf. April 29-30 pg. 4
also in this issue
IRS RELEASES FINAL PAPERWORK RULES FOR EMPLOYERS UNDER ACA pg 12
CONTENT
AT YOUR SERVICE
3
HOW THE FUTURE CHANGES ON OVERTIME EXEMPTIONS COULD AFFECT THE HOSPITALITY INDUSTRY
4
NATIONAL RESTAURANT ASSOCIATION PUBLIC AFFAIRS CONFERENCE APRIL 29-30
DEBRA SCOTT InRLA Director of Operations
6
MCDONALD’S WORKERS FILE MULTIPLE CLASS- ACTION LAWSUITS ALLEGING WIDESPREAD WAGE THEFT
TOM JOHNSON InRLA Director of Finance
8
SAVE THE DATE: INRLA GOLF OUTING JULY 23
9
IRS ENCOURAGES SMALL EMPLOYERS TO CHECK OUT SMALL BUSINESS HEALTH CARE TAX CREDIT
10
2014 LEGISLATIVE UPDATE: INRLA END-OF-SESSION
REPORT
12
IRS RELEASES FINAL PAPERWORK RULES FOR EMPLOYERS UNDER ACA
13
SMITH TRAVEL RESEARCH: GLOBAL DESTINATION REPORT FEBRUARY 2014
14
MINIMUM WAGE GAINS MOMENTUM ACROSS THE NATION
16
(BACK COVER) INRLA REVERSE TRADE SHOW APRIL 24
PATRICK TAMM InRLA President
CONNIE VICKERY InRLA Director of Government Affairs STEPHANIE HIGGINS InRLA Director of Events STACY QUASEBARTH InRLA Director of Communications EMILY WALDRON InRLA Director of First Impressions
INDIANA RESTAURANT & LODGING ASSOCIATION 200 S. Meridian St. Suite 350 Indianapolis, IN 46225 www.InRLA.org
InRLA Endorsed Providers
LA I n nRdorseedr e rovid p
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InRLA At Your Service: March 2014
How the Future Changes on Overtime Exemptions Could Affect the Hospitality Industry With the March 13th signing of a memorandum by President Barack Obama, the U.S. Department of Labor (DOL) will be working to propose revisions to overtime rules and exemptions. The revisions are meant to make more employees working over 40 hours per week eligible for overtime pay by making it more difficult for individuals to qualify as exempt under the Fair Labor Standards Act (FLSA). Current rules regulate “executive, administrative or professional” workers as being exempt from overtime-pay rules if a duties test is passed and their salary meets at least $455 a week or $23,660 annually. A proposal in revisions can be expected from the DOL In the next 12-24 months and will likely include a significant increase in the threshold of minimum guaranteed salary for exempt employees and changes to the job duties tests. For example, the time that a restaurant or hotel salaried staff spends on non-exempt operational tasks such as covering front of the house or back of house duties (covering cash registers, front desk operations, working in the food line) could be severely restricted even though they are also managing the store or location at the same time. The current “primary duty” test that shows an individual qualifies as an executive/managerial, professional or administrative employee could be replaced with an inflexible percentage of time test. This new percentage of time test would require an employee to spend more than 50% of his or her time each week performing exempt duties. DOL regulations spell out the fine print for the salary and duties tests online at http://www.flsa.com/coverage.html. While the President states that the changes are meant to modernize outdated regulations to protect and benefit millions of middle class Americans (read the White House fact sheet online at http://tiny.cc/whitehousefactsheet), it could have negative consequences particularly in the hospitality industry. Employers may react by converting affected employees from salary to hourly and lowering their hourly pay rates to accommodate for any anticipated overtime. The number of part-time positions may increase to prevent an employer’s formerly exempt employees from working overtime hours or employers may place strict limitations on the amount of overtime an employee is allowed to work. During this regulatory process it is important that we make our voices heard. The future clarifications to the DOL rulings are unlikely to be made in a way that would encourage economic growth. Most importantly, we in the hospitality industry need to oppose regulatory changes that would ultimately decrease flexibility in the workplace or that increases financial barriers in retaining and hiring employees. The Indiana Restaurant & Lodging Association will work to keep this issue in the forefront and alert members of the latest updates in reference to these possible changes impacting your business.
InRLA At Your Service: March 2014
Page 3
2014
National Restaurant Association
pubLic affairs
CoNFeReNCe April 29-30, 2014 • Washington, DC
p rE L i m i n a ry agE n da
The National Restaurant Association’s Public Affairs REGISTRATION Conference is right around the corner. Join us April 29 and • Early-bird registration (NRA member): $165 (ends 30 in Washington, DC for Building an informative event focused Ronald Reagan and International Tradeon Center March 28) the business issues you careAve, about most. 1300 Pennsylvania Washington, DC 20004
NeW
THE LEGISLATIVE AGENDA:
•
oCAtioN(NRA Regularlregistration ! member): $185
•
•
Non-member: $250
tuesDAy, ApRil 29
ACA definition of full time: The industry is aggressively a.m. – 6 p.m. Registration working8 to change the currentConference ACA definition of fulltime from 30 –hours that better reflects our 11 a.m. 1 p.m.to something Networking lunch workforce model.
CONFERENCE DETAILS general session and Key Note speaker
1 p.m. – 2:30 p.m.
HOTELs
This year’s Public Affairs Conference will be held at the Immigration reform: After of asessions comprehensive 2:45 p.m. – 5:30 p.m.passage Breakout and issue panels Take&advantage of special Ronald Reagan Building International Trade Center,1300 immigration bill in the Senate, the House is set to take National Restaurant Association Pennsylvania Ave, N.W., Washington, DC. This is a 5:30 p.m. – 6:30 p.m. Welcome Reception up this critical issue later this year. rates at the following conference center only. There are no hotelhotels. rooms attached 6:30 p.m. – 9 p.m. NRAeF gala Awards Dinner Please reference the “National to the Trade Center. • Wage issues: We need to tellRecognizing Congress why Restaurant Association” when Restaurant Neighbor Award businesses oppose increasingWinners, the federal minimum making your reservation. presented by American Express; The National Restaurant Association has secured special Diversity wage to $10.10 an hour, moreFaces thanof tripling the Honorees, federal presented by rates at the following hotel directly across the street from MARRiott MetRo CeNteR PepsiCo and the minimum cash wage for tipped employees to coveted $7.07, Eure “Ambassador ($299/Night) the Reagan Building: ofwage Hospitality” Award. and automatically indexing the to inflation each 775 12th Street, NW year. 9 p.m. – 10:30 p.m. Restaurant pAC Reception W Washington DC Reservations: 1-800-393-2510 For eligible participants only Block ends March 31, 2014 $329/night++ NEW LOCATION, SAME GREAT EVENT! 515 15th Street, N.W.W WAshiNgtoN DC Spend two days and one night in Washington, D.C., with (888) 627-7816 ($329/Night) WeDNesDAy, ApRil hundreds of your industry peers and30 colleagues. Gain Block ends March 28,515 2014 15th Street NW valuable political insights and a better understanding of Reservations: 1-877-946-8357 7:30 a.m. – 9 a.m. Breakfast session what this year’s legislative agenda means for your business Block ends March 28, 2014 - and your 9 bottom a.m. line. shuttles Depart for Capitol hill Register today! http://tinyurl.com/nrapublicaffairsconf 11:30 a.m. – 1:30 p.m.Perino, lunch on Capitol • Key note speaker: Dana Former Whitehill House All Host events take place at the Ronald Reagan Press Secretary and Fox News •
Building & International Trade Center, unless noted.reform, care,otherwise immigration For more information,
•
Issue briefings on health wage and opportunity
•
Gala awards dinner - Recognizing Restaurant Neighbor For more information contact Caitlin Donahue at Award winners, presented by American Express; Faces (202) 331–5915 or cdonahue@restaurant.org. of Diversity honorees, presented by PepsiCo; and the coveted Eure "Ambassador of Hospitality" Award.
•
Lobby day on Capitol Hill.
Page 4
please contact Caitlin Donahue, cdonahue@restaurant.org or (202) 331-5915. © 2014 National Restaurant Association. All rights reserved. The National Restaurant Association logo is a trademark of the National Restaurant Association.
InRLA At Your Service: March 2014
2014
National Restaurant Association
pubLic affairs
CoNFeReNCe April 29-30, 2014 • Washington, DC
p r E Liminary ag En da Ronald Reagan Building and International Trade Center 1300 Pennsylvania Ave, Washington, DC 20004
tuesDAy, ApRil 29
NeW
loCAtioN !
8 a.m. – 6 p.m.
Conference Registration
11 a.m. – 1 p.m.
Networking lunch
1 p.m. – 2:30 p.m.
general session and Key Note speaker
HOTELs
2:45 p.m. – 5:30 p.m.
Breakout sessions and issue panels
5:30 p.m. – 6:30 p.m.
Welcome Reception
6:30 p.m. – 9 p.m.
NRAeF gala Awards Dinner Recognizing Restaurant Neighbor Award Winners, presented by American Express; Faces of Diversity Honorees, presented by PepsiCo and the coveted Eure “Ambassador of Hospitality” Award.
Take advantage of special National Restaurant Association rates at the following hotels. Please reference the “National Restaurant Association” when making your reservation.
9 p.m. – 10:30 p.m.
Restaurant pAC Reception For eligible participants only
WeDNesDAy, ApRil 30 7:30 a.m. – 9 a.m.
Breakfast session
9 a.m.
shuttles Depart for Capitol hill
11:30 a.m. – 1:30 p.m.
MARRiott MetRo CeNteR ($299/Night) 775 12th Street, NW Reservations: 1-800-393-2510 Block ends March 31, 2014
W WAshiNgtoN DC ($329/Night) 515 15th Street NW Reservations: 1-877-946-8357 Block ends March 28, 2014
lunch on Capitol hill All events take place at the Ronald Reagan Building & International Trade Center, unless otherwise noted.
For more information contact Caitlin Donahue at (202) 331–5915 or cdonahue@restaurant.org.
InRLA At Your Service: March 2014
© 2014 National Restaurant Association. All rights reserved. The National Restaurant Association logo is a trademark of the National Restaurant Association.
Page 5
McDonald’s Workers File Multiple Class-Action Lawsuits Alleging Widespread Wage Theft
New York, NY (RestaurantNews.com) Attorneys representing McDonald’s workers in California, Michigan and New York this week filed class action lawsuits in federal and state courts claiming the fast food giant is systematically stealing employees’ wages by forcing them to work off the clock, shaving hours off their time cards, and not paying them overtime, among other practices. The suits, which were filed Wednesday and today, demand McDonald’s pay back these wages and stop its illegal theft of workers’ pay. “We work hard, and our wages are already at rock bottom,” said Sharnell Grandberry, a McDonald’s worker in Detroit who earns about $250 each week and is a plaintiff in one of the Michigan suits. “It is time for McDonalds to stop skirting the law to pad profits. We need to get paid for the hours we work.” According to national employment rights specialist Joseph M. Sellers, of Cohen Milstein Sellers & Toll PLLC: “Despite reaping tremendous revenues and profits thanks to the labors of crew members who earn at or just above minimum wage, McDonald’s is unlawfully failing to pay its workers for all the hours they work and for necessary expenses they incur relating to the uniform McDonald’s requires them to wear. Not only do its practices cause a substantial financial burden for McDonald’s workers, they violate state and federal minimum wage laws as well as other state labor laws.” Sellers and his firm are co-counsel in the lawsuits filed in California and New York. CALIFORNIA In three California suits, workers claim that McDonald’s and its franchise owners failed to pay them for all time worked, failed to pay proper overtime, altered pay records Page 6
and deprived them of timely meal periods and rest breaks. A fourth case makes similar claims on behalf of a statewide class of workers in McDonald’s corporate-owned restaurants, who are adding their claims to a lawsuit for unpaid wages, penalties, and other relief that is already pending against McDonald’s in Los Angeles Superior Court. “We’ve uncovered several unlawful schemes, but they all share a common purpose – to drive labor costs down by stealing wages from McDonald’s workers,” said Michael Rubin of Altshuler Berzon LLP, an attorney who filed the lawsuits in California Superior Court in Los Angeles and in Alameda counties. “These McDonald’s workers have courageously stepped forward to shine a light on these illegal practices, and already we’ve begun to hear from several co-workers with similar wage theft claims.” In addition to Altshuler Berzon LLP, California McDonald’s workers are represented by Cohen Milstein Sellers & Toll PLLC, and Matern Law Group. MICHIGAN In two Michigan suits, filed against McDonald’s Corp., its U.S. subsidiary and two Detroit-area franchisees, workers assert McDonald’s regularly forces workers to show up for work at a scheduled time but then has them wait without pay until the store gets busy enough, and that it routinely violates minimum wage laws. The suits contend that, using McDonald’s franchisor standards and corporation-provided software, McDonald’s franchisees closely monitor the ratio of labor costs to revenues. When it exceeds a corporate-set target, managers tell workers arriving for their shifts to wait for up to an hour to clock in, and sometimes direct workers who have already clocked in for scheduled shifts to clock out InRLA At Your Service: March 2014
for extended breaks until the target ratio is again achieved. Workers are not paid for these wait times, and McDonald’s Corporation knowingly tolerates this practice, in violation of federal labor law. The suits also allege that McDonald’s forces its low-paid workers to buy their own uniforms. Because McDonald’s restaurants pay at or near the minimum wage, this drives some workers’ real wages below the legal minimum, in violation of federal labor law. “The Detroit McDonald’s workers are coming into federal court for themselves and their co-workers because McDonald’s schedules them for work, but then makes them wait off the clock until enough customers arrive,” said David Dean of James & Hoffman, an attorney who filed the suits in U.S. District Court for the Eastern District of Michigan. “Federal law demands they be paid for such waiting time, and McDonald’s Corporation needs to stop tolerating this illegal practice.” In addition to James & Hoffman, Michigan McDonald’s workers are represented by McKnight, McClow, Canzano, Smith & Radtke, P.C. NEW YORK The case filed in New York federal court seeks to redress McDonald’s blatant failure to compensate and reimburse workers at its New York stores for the time and cost of cleaning uniforms—which McDonald’s requires them to wear and to keep clean.
The allegations are not isolated ones. A survey conducted in New York last year by Anzalone Liszt Grove Research showed that 84 percent of fast-food workers are victims of wage theft. (http://tiny.cc/84percent) In response to the survey, New York Attorney General Eric Schneiderman launched an investigation into pay practices in the state’s fast-food industry.(http://tiny.cc/reviewingpay) “Hidden from view among salaried workers, wage theft is a scourge that eats away at the livelihoods of alreadyunderpaid hourly workers,” said Catherine Ruckelshaus, general counsel at the National Employment Law Project. “As these cases show, it’s a persistent problem in too many low-wage industries like fast food, which is why the US Department of Labor has named restaurants and fast food as one of its priority industries for strategic enforcement. McDonald’s requires its workers to work off-the-clock, show up for work without consistent shifts, and deducts expenses from their already-meager pay, chiseling wages while earning billions in profits. These violations can run into the millions of dollars quite quickly, and as one of the largest low-wage employers in the country, McDonalds should be setting standards, not undermining them.” “We are tired of McDonald’s abusive behavior,” said Guadalupe Salazar, a McDonald’s worker in California who earns about $480 for each 15-day pay period and is one of the plaintiffs. “The company continues to take advantage of me and my coworkers. We can’t allow them to play by a different set of rules just because they’re big. They need to respect us and this suit will help them do that.”
The plaintiffs contend that McDonald’s failure to reimburse employees for uniform cleaning violates the New York state requirement to pay workers weekly for uniform maintenance and often also violates both federal and state minimum wage laws. “Because McDonald’s restaurants pay so little, forcing workers to clean their Golden Arches uniforms on their own dime drives many workers’ wages below the legal minimum,” said James Rief of Gladstein, Reif and Meginniss LLP, an attorney who filed the lawsuit in United States District Court Eastern District of New York. “With $28 billion in revenue in 2013 alone, McDonald’s can certainly afford to provide its minimum wage workers with this money to clean their uniforms, as required by law, instead of making them pay for the privilege of wearing McDonald’s advertising.” In addition to Gladstein, Reif and Meginniss LLP, New York McDonald’s workers are represented by Cohen Milstein Sellers & Toll PLLC. Taken together, these lawsuits in California, Michigan, and New York contend that McDonald’s, which raked in nearly $5.6 billion in profits last year, regularly fails to pay workers for all the hours they work.
InRLA At Your Service: March 2014
Although some of the regulations in the McDonald lawsuits are not applicable in Indiana, there is no question that wage and hour is a targeted enforcement for the Department of Labor.
Know the law! If you have questions about the legality in Indiana of practices mentioned in the article or others, please call your Association!
Page 7
INDIANA RESTAURANT & LODGING ASSOCIATION
at your service
OPEN GOLF
TOURNAMENT
EAGLE CREEK GOLF COURSE 8802 W. 56TH ST. • INDIANAPOLIS
Save the Date: JULY 23, 2014 Tee Time: 11:00 AM Whether the Weather: Rain or Shine Page 8
InRLA At Your Service: March 2014
IRS Encourages Small Employers to Check Out Small Business Health Care Tax Credit With business tax-filing deadlines fast approaching, the Internal Revenue Service is encouraging small employers that provide health insurance coverage to their employees to check out the small business health care tax credit and then claim it if they qualify. The Small Business Health Care Tax Credit page on IRS. gov contains information and resources designed to help small employers see if they qualify for the credit and then figure it correctly. These include a 2013 tax credit estimator, examples of typical tax savings under various scenarios and answers to frequently-asked questions. Additionally, the IRS has Health Care Tax Tips (http:// tiny.cc/healthcaretaxtips), designed to provide useful information to employers, families and individuals. These tips include a new Small Business Health Care Tax Credit tip as well as tips covering other Affordable Care Act topics. The small business health care tax credit was included in the Affordable Care Act enacted in 2010. Under the ACA, eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014. For 2010 through 2013, the maximum credit is 35 percent of premiums paid by eligible small businesses and 25 percent of premiums paid by eligible tax-exempt organizations. In 2014, the maximum credit rate rises to 50 percent for small businesses and 35 percent for tax-exempt organizations. Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for this credit. The credit is specifically targeted to help small businesses and taxexempt organizations provide health insurance for their employees. Depending upon how they are structured, eligible small employers are likely subject to one of the following three tax-filing deadlines, which fall in coming weeks:
• March 17: Corporations and S Corporations that file
•
on a calendar year basis can figure the credit on Form 8941 (http://tiny.cc/calendaryearbasis) attached to the income tax return. April 15: Partnerships and individuals have until April 15 to complete and file their income tax returns (partnerships on Form 1065 (http://www.irs.gov/pub/irspdf/f1065.pdf) and individuals on Form 1040 (http://tiny. cc/individualsform1040)). Sole proprietors can figure the credit on Form 8941(http://tiny.cc/solepropform) attached to the individual income tax return. Individuals
InRLA At Your Service: March 2014
•
who have business income and credits reported to them on Schedules K-1—partners in partnerships, S corporation shareholders and beneficiaries of estates and trusts—will report the credit amount directly on Form 3800– no Form 8941 required. The resulting credit is entered on Form 1040, Line 53. May 15: Tax-exempt organizations that file on a calendar year basis can use Form 8941 and then claim the credit on Form 990-T, Line 44f. (http://tiny.cc/ taxemptform)
Taxpayers needing more time to determine eligibility should consider obtaining an automatic tax-filing extension, usually for six months. See Form 4868 for individuals (http://tiny. cc/extensionindividual), Form 7004 for businesses (http:// tiny.cc/extensionbusiness) and Form 8868 for tax-exempt organizations (http://tiny.cc/extensiontaxexempt). Businesses that have already filed and later find that they qualified in 2013 or an earlier year can still claim the credit by filing an amended return for the affected years. Corporations use Form 1120X (http://tiny.cc/ corporationsform), individuals use Form 1040X (http://tiny. cc/amendindividuals) and tax-exempt organizations use Form 990-T. A three-year statute of limitations normally applies to these refund claims. See the instructions to these forms for details. Some businesses and tax-exempt organizations that already locked into health insurance plan structures and contributions may not have had the opportunity to make any needed adjustments to qualify for the credit for 2013 or earlier years. These employers can still make changes so they qualify to claim the credit on future returns. To learn more about the Small Business Health Care Tax Credit and view tips about other ACA topics, visit the Health Care Tax Tip page on IRS.gov/aca. Newly added tips include:
• Small Business Health Care Tax Credit ─ Employers
can find out if they qualify and how much they can get.
• What You Need to Know about the Amount of Health Insurance Reported on Form W-2 – Learn about the amount of health insurance reported on Form W-2.
• What do I need to know about the Health Care Law
for my 2013 Tax Return? – Provides tips that help with filing the 2013 income tax return, including information about filing requirements and Form W-2. Page 9
2014 Legislative Update InRLA End-of-Session Report The Indiana General Assembly concluded its "short" session late into the evening on Thursday, March 13 - and there's good news to share.
• No new food and beverage taxes • New teen labor law allows expanded hours for 16 year olds
• No new Innkeepers taxes • Tourism funding gets study HB 1326: Food & Beverage Taxes - Dead Although quite a few new food and beverage taxes were proposed, no new hospitality taxes passed. Our members voiced their concern and were heard! Thank you for your participation in the process this year. Defeating HB 1326 Food and Beverage taxes a bill to raise food and beverage taxes in Angola, Danville, Elkhart, Goshen, Greenwood, Rockville, and Rushville was a major accomplishment. HB 1001 Business Personal Property Tax Relief It looked like the Governor’s plan to relieve small businesses from paying business personal property tax to the county would become a reality. Both the House and Senate seemed committed to some form of state mandated relief until local government expressed the need for an alternative form of financing. We monitored this bill to make sure hospitality taxes did not become the alternative form. On the last day of session, SB 1 was combined with HB 1001 State and Local Taxation to allow counties to exempt business personal property worth less than $20,000 and phase down the corporate income tax rate to 4.9% in 2022. HB 1083 Teen Labor Law - Passed Restaurateurs, hospitality professionals, and tourist attractions came to the statehouse to propose changes to Indiana teen labor law. Legislation was introduced to allow a child to work at their parents LLC business and allow a 16 year old to work until 11:00 PM with parental permission. In the final hours of the session our very uncontroversial measure was combined with provisions to make the appeals process in the unemployment compensation system work more efficiently and passed along party lines. We supported both measures. HB 1039 – Indiana Grown Initiative & SB 179 – Various Agricultural Matters - Passed Hospitality leaders also came to the state house to pass HB 1039 Indiana Grown initiative and SB 179 Various agricultural matters. These bills will be good for promoting local farm product in our local restaurants. Page 10
SB 227 – Updated Lifeline Law - Passed The new language provides that a person is immune from arrest or prosecution for certain alcohol or drug offenses if the arrest or prosecution is due to the person: (1) reporting a medical emergency; (2) being the victim of a sex offense; or (3) witnessing and reporting what the person believes to be a crime. InRLA continues to support Sen. Jim Merritt's efforts in this important public policy. The bill also further empowers transit responders in dealing with potential drug overdoses. Social Host - Passed Credit goes to the Indiana Coalition to Reduce Underage Drinking and many of the Drug Free organizations around the state for protecting minors. The bill makes it a Class B misdemeanor for a person to knowingly or intentionally: (1) rent property; or (2) provide or arrange for the use of property; for the purpose of allowing or enabling a minor to consume an alcoholic beverage on the property. HB 1116 Became an overloaded vehicle for many pieces of proposed alcohol policy, including allowing the sale of cold growlers at a farmer's market and removing the face to face requirement for wine sales. In the end, House Public Policy Committee Chairman Tom Dermody said there were too many major public policy concerns to move the many parts of this bill into law. The final version of HB 1116: • Deleted the provisions added by the Senate for wineries and craft breweries • Retained the original provisions allowing a state park inn to contract with a third party such as a hotel management company to sell alcohol • Incorporated language that would allow tobacco shops to allow food not sold on the premises to be consumed on the premises (employee lunches) • Added provisions requested by tavern owners and the ATC to allow smoking establishments an exception to the rule that all establishments post a "No Smoking' sign within eight feet from the entry • Allows the holder of an artisan distiller's permit to also hold a farm winery permit, a microbrewery permit, and a distiller's permit
InRLA At Your Service: March 2014
InRLA Legislative Update Continued... In other legislative matters: SB 176 - Mass Transit Indianapolis became a topic of discussion again this session as legislators discussed plans for mass transit. SB 176 Mass transit allows for a referendum to raise income taxes to fund a Central Indiana bus system. SB 367 - Airport Fees Indianapolis airport hotels took their fight with the airport authority to the statehouse. We asked for an amendment to SB 367 Various Tax Matters to prevent the airport from raising fees over 3000% to some local hotels. The amendment did not pass but the airport has promised to work with area hotels to resolve differences.
AH&LA Legislative Action Summit April 1-2, 2014 JW Marriott, Washington DC Washington, D.C.
AH&LA's Legislative Action Summit (LAS) remains the most effective way to voice the strength of the lodging industry to key policymakers in Washington, and in recent years we have seen direct and impressive results from our visits to Capitol Hill. With workforce, technology/tax, and travel/ tourism once again set to impact the industry, we need to join together to make our voices heard. Our issues are too important to leave to others; it is your responsibility as a leader in our industry to attend. No other conference offers the same level of access, insight, and influence. Join with other hotel owners, general managers, and CEOs to tell Congress why the lodging industry is vital. Learn more online at: http://www.ahla.com/LAS/ InRLA At Your Service: March 2014
SR 26 - Tourism Funding Study - Passed Senator Young once again proposed and worked to pass Senate Resolution 26 to study tourism funding in a summer study committee. SR 8 - Child Labor Study – Passed Senator Boots proposed and worked to pass Senate Resolution 8 to study child labor in a summer study committee. The Speaker of the House and the President Pro Tem of the Senate have a week after sine die to sign all bills before sending them on to the Governor's Office. When a bill reaches Governor Pence's desk, he has seven days to take action. He may sign the bill, veto it, or let the legislation become law without his signature.
NRA Launches Operator Survey to Answer Questions about Food Waste The NRA is calling on restaurant operators to participate in an online survey on how much unused food is donated, composted, or sent to landfills and other waste disposal facilities. The information will be used to help develop new ways to reduce food waste. We’ve teamed up with the Grocery Manufacturers Association and the Food Marketing Institute to form the Food Waste Reduction Alliance - focused on achieving: • reductions in the amount of food waste generated • increased amounts of safe • nutritious food donated • recycling of unavoidable food waste - diverting it away from landfills Operators interested in participating can take the survey online at: http://tinyurl.com/nrafoodsurvey Page 11
IRS releases final paperwork rules for employers under ACA New information-reporting rules for many businesses and their insurers are on their way under the Affordable Care Act — and with less than 10 months to go before data-tracking is supposed to get underway, the impact on affected businesses could be overwhelming, according to the National Restaurant Association. The IRS has issued final regulations spelling out Sections 6056 and 6055 of the Internal Revenue Code. These new provisions are part of the ACA, and will require many employers to turn over significant data to the IRS and to employees starting in early 2016. Data-tracking must begin Jan. 1, 2015. Access the Treasury Department’s fact sheet (http://tiny.cc/ implementinginformation), plus the Section 6056 (http://tiny. cc/section6056) and Section 6055 regulations (http://tiny. cc/section6055), which are scheduled to be published in the Federal Register March 10. Find the NRA’s statement online at http://tiny.cc/reportingfinalrules. The rules are aimed at helping the IRS enforce the health care law’s employer and individual mandates, including allowing the agency to calculate and assess monthly penalties against large employers who fail to offer qualifying health care coverage to full-time employees. Federal and state agencies will also use the Section 6056/6055 data to determine which individuals are eligible for federal tax help to buy health care plans on exchanges. Employers have been waiting for the final rules for months. As a leader of the Employers for Flexibility in Health Care (E-FLEX) Coalition, the National Restaurant Association last year asked the IRS to give employers maximum flexibility in how they report data. The final regulations offer some options aimed at streamlining the process for employers, but the requirements still appear daunting. To simplify, the IRS said it’s offering a form to allow employers and their insurers to provide Section 6056/6055 information on the same consolidated form. The IRS also said in limited cases – where employers offer qualifying health plans to full-time employees at a cost that falls below 9.5 percent of the federal poverty level, or about $1,100 a year – employers may qualify for simplified reporting.
Page 12
NRA DISAPPOINTED IN THE REGULATIONS NRA President and CEO Dawn Sweeney said in a statement released March 5 that the NRA is disappointed in the regulations. http://tiny.cc/march5statement “We asked the IRS to offer options for a truly streamlined reporting process, taking into consideration the employer reporting requirements holistically,” Sweeney said. Instead, she said employers will face an “overwhelming and extensive set of requirements.” The data-collection process will be massive, likely requiring new administrative resources and technology upgrades, Sweeney said. “Our industry has never needed to track such a massive outflow of employee data,” Sweeney said. She said the prospect of putting systems in place by the end of the year to collect, maintain and protect new data continues to be a great concern for restaurateurs. REPORTING RULES AT A GLANCE
• What the rules require: Section 6056 requires covered
employers to certify that they’ve offered “minimum essential coverage” to full-time employees. Among other information, the 6056 reports will generally require data on the number of full-time employees each month and the months during which employees were offered coverage. Section 6055 requires insurers and self-insured employers to file data about health care coverage.
• Who’s covered: The ACA’s Section 6056 reporting rules apply to businesses that employ 50 or more “full-timeequivalent” employees. The Section 6055 reports must be filed by any entity that offers a health plan, such as self-insured employers, health insurers and others.
• When the reporting rules take effect: The first
6055/6056 returns will be due in early 2016, based on data tracked in 2015. Statements must be filed with employees by Jan. 31, 2016, and returns must be filed with the IRS by the end of February (for paper filers) or end of March (if filed electronically).
InRLA At Your Service: March 2014
1
Smith Travel Research Global Destination Report
Phon Fa
Indiana Hotel & Lodging Association For the Month of February 2014 Tab
Table of Contents 1 By compiling over 500 educational establishments' key calendar dates into one easy-to-read report, Multi-Segment 2 weHelp have developed a way for you to quickly view and prepare for future leisure demand. 3
Source 2014 Smith Travel Research, Inc./STR Global, Ltd.
Tab 2 - Multi-Segment Indiana Hotel & Lodging Association For the month of: February 2014
Current Month - February 2014 vs February 2013 Occ % 2014
ADR
2013
2014
2013
2014
2013
Year t
Percent Change from February 2013
RevPAR Occ
ADR
RevPAR
Room Rev
Room Avail
Occ % Room Sold
2014
ADR
2013
2014
2013
United States
60.3
58.4 111.94 107.77
67.49
62.89
3.3
3.9
7.3
8.2
0.8
4.2
56.0
54.4 110.67 106.90
Indiana
51.9
51.2
83.38
80.83
43.24
41.37
1.3
3.2
4.5
4.5
0.0
1.3
47.8
46.7
81.08
79.24
Indianapolis, IN
58.4
55.6
89.80
88.41
52.48
49.20
5.0
1.6
6.7
6.0
-0.6
4.4
54.5
50.8
86.72
86.26
45.9 51.2 45.5 46.5 63.8 53.6 51.3 53.1 44.1
47.2 61.2 44.8 42.9 56.9 54.1 49.6 54.2 41.3
73.79 81.17 84.43 69.13 82.87 75.23 80.89 97.86 68.60
70.47 74.93 79.99 66.94 81.16 70.99 77.67 97.51 67.85
33.88 41.56 38.41 32.12 52.86 40.33 41.46 52.01 30.27
33.24 45.85 35.85 28.72 46.16 38.42 38.53 52.82 28.01
-2.7 -16.3 1.5 8.3 12.2 -0.9 3.3 -1.9 6.9
4.7 8.3 5.6 3.3 2.1 6.0 4.1 0.4 1.1
1.9 -9.4 7.1 11.9 14.5 5.0 7.6 -1.5 8.1
1.4 -9.3 10.7 4.7 14.5 5.0 10.6 -1.8 13.3
43.7 73.53 55.7 80.27 40.4 81.34 40.1 67.64 47.5 79.78 50.0 74.20 46.1 80.53 US 48.6Dollar 94.48 38.0 67.88
70.43 74.43 78.61 66.71 79.02 70.78 77.86 92.72 67.71
Fort Wayne, IN Gary, IN South Bend-Mishawaka, IN-MI Elkhart-Goshen, IN Lafayette, IN Kokomo, IN Evansville/Henderson, IN-KY Bloomington, IN TerreAssociation Haute, IN Indiana Hotel & Lodging
Tab 2 - Multi-Segment
-0.5 -3.2 0.0 -16.3 3.4 4.9 -6.4 1.4 0.0 12.2 0.0 -0.9 2.8 6.2 Currency: -0.2 -2.1 4.8 12.1
43.6 46.5 41.3 43.1 54.5 49.4 46.2 USD 46.4 40.8
For the month of: February 2014
Current Month Year to Date - February 2014 vs February 2013
February 2013 Occ Occ%%
cent Change from February 2013
ADR
RevPAR
Room Rev
Room Avail
Room Sold
2014 2014
2013 2013
ADR ADR 2014 2014
2013 2013
2014 2014
2013 2013
Participation Year to Date - February
Percent Change from February 2013 Percent Change from YTD 2013
RevPAR RevPAR Occ Occ
ADR ADR
Room Room Rev Rev RevPAR RevPAR
Room Room Avail Avail
Occ % Properties Room Room Sold Sold
2014 Census
2013 Sample
ADRRooms 2014 Census2013
RevPAR
2014 Sample
2013
3.9
United 7.3 States 8.2
0.8
4.2
60.3 56.0
58.4 54.4 111.94 110.67 107.77 106.90 67.49 61.99 62.89 58.16
3.3 3.0
3.9 3.5
7.3 6.6
8.2 7.5
0.8 0.9
4.2 3.9
56.0 51511
54.4 106.903522172 61.99 30336110.67 4865008
58.16
3.2
Indiana 4.5
0.0
1.3
51.9 47.8
51.2 46.7 83.38 81.08 80.83 79.24 43.24 38.75 41.37 37.01
1.3 2.3
3.2 2.3
4.5 4.7
4.5 4.7
0.0 0.0
1.3 2.3
47.8 959
46.7 79.24 64187 38.75 650 81.0884314
37.01
1.6
Indianapolis, 6.7 6.0 IN
-0.6
4.4
58.4 54.5
55.6 50.8 89.80 86.72 88.41 86.26 52.48 47.26 49.20 43.81
5.0 7.3
1.6 0.5
6.7 7.9
6.0 7.2
-0.6 -0.6
4.4 6.6
54.5 274
50.8 86.26 26630 47.26 216 86.7231230
43.81
4.7 8.3 5.6 3.3 2.1 6.0 4.1 0.4 1.1
Fort 1.9 Wayne, 1.4IN -0.5 -3.2 Gary, -9.4 IN -9.3 0.0 -16.3 South 7.1 Bend-Mishawaka, 10.7 3.4 IN-MI 4.9 Elkhart-Goshen, IN-6.4 11.9 4.7 1.4 Lafayette, IN 14.5 14.5 0.0 12.2 Kokomo, IN 5.0 5.0 0.0 -0.9 Evansville/Henderson, 7.6 10.6 2.8 IN-KY6.2 Bloomington, -1.5 -1.8 IN -0.2 -2.1 Terre 8.1 Haute, 13.3 IN 4.8 12.1
45.9 43.6 51.2 46.5 45.5 41.3 46.5 43.1 63.8 54.5 53.6 49.4 51.3 46.2 53.1 46.4 44.1 40.8
47.2 43.7 61.2 55.7 44.8 40.4 42.9 40.1 56.9 47.5 54.1 50.0 49.6 46.1 54.2 48.6 41.3 38.0
-2.7 -0.3 -16.3 -16.4 1.5 2.3 8.3 7.4 12.2 14.7 -0.9 -1.2 3.3 0.2 -1.9 -4.5 6.9 7.3
4.7 4.4 8.3 7.8 5.6 3.5 3.3 1.4 2.1 1.0 6.0 4.8 4.1 3.4 0.4 1.9 1.1 0.2
1.9 4.1 -9.4 -9.9 7.1 5.9 11.9 8.9 14.5 15.8 5.0 3.6 7.6 3.6 -1.5 -2.7 8.1 7.6
1.4 3.5 -9.3 -9.9 10.7 9.5 4.7 2.0 14.5 15.8 5.0 3.6 10.6 6.5 -1.8 -2.9 13.3 12.7
-0.5 -0.5 0.0 -0.0 3.4 3.4 -6.4 -6.4 0.0 0.0 0.0 0.0 2.8 2.8 -0.2 -0.2 4.8 4.8
-3.2 -0.8 -16.3 -16.4 4.9 5.8 1.4 0.6 12.2 14.7 -0.9 -1.2 6.2 3.0 -2.1 -4.7 12.1 12.5
43.684 46.568 41.348 43.134 54.528 49.412 46.251 46.426 40.826
43.753 55.752 40.438 40.124 47.524 50.0 9 46.135 48.617 38.020
30.80 41.44 31.75 26.77 37.54 35.38 35.88 45.04 25.72
4.5
73.79 73.53 81.17 80.27 84.43 81.34 69.13 67.64 82.87 79.78 75.23 74.20 80.89 80.53 97.86 94.48 68.60 67.88
InRLA At Your Service: March 2014
70.47 70.43 74.93 74.43 79.99 78.61 66.94 66.71 81.16 79.02 70.99 70.78 77.67 77.86 97.51 92.72 67.85 67.71
33.88 32.05 41.56 37.35 38.41 33.63 32.12 29.16 52.86 43.49 40.33 36.65 41.46 37.18 52.01 43.83 30.27 27.66
33.24 30.80 45.85 41.44 35.85 31.75 28.72 26.77 46.16 37.54 38.42 35.38 38.53 35.88 52.82 45.04 28.01 25.72
73.53 6467 70.43 80.27 5902 74.43 81.34 4363 78.61 67.64 2135 66.71 79.78 2503 79.02 74.20 894 70.78 80.53 4400 77.86 94.48 2064 92.72 67.88 2198 67.71
32.05 4706 37.35 4501 33.63 3592 29.16 1668 43.49 2284 36.65 745 37.18 3387 43.83 1637 27.66 1935
Page 13
Minimum Wage Gains Momentum Across the Nation
As most restaurateurs are aware, bills have been introduced in the House and Senate to dramatically increase the federal minimum wage. The Fair Minimum Wage Act would increase the federal minimum wage nearly 40% over a period of slightly more than two years – from the current $7.25 to $10.10 – and it would automatically index the federal minimum wage to inflation each year thereafter, regardless of economic conditions. The legislation also calls for increasing the minimum cash wage for tipped employees until it reaches 70% of the federal minimum wage. It would triple, in stages, from $2.13 to $7.07.
he warns operators that “the subject is going to be in the news continually for the next year, if not the next three years.” Partly, he acknowledges, because it’s a political issue, but also because wage and benefit issues have public support across party lines. “The public wants to solve what they think is a real and growing problem with lack of opportunities and the ability to advance. They want the situation to be better.” But Scott encourages restaurateurs – and legislators – to keep things in perspective in terms of public sentiment. “The majority of the population supports a minimum wage increase, yes, but that’s normal. Go back five to seven years, or 10 years, or three years, it doesn’t matter – there has always been support. It’s important to look at current public opinion – which we measured recently at about 60% in support of increases – relatively, compared to norms. It’s never below 50%. We aren’t working from a zero point scale.”
While this federal minimum wage legislation is “unlikely” to pass this year, advises Scott DeFife, Executive VP, Policy & Government Affairs, National Restaurant Association,
Nevertheless, it’s difficult to deny the legislative momentum, notably in states and municipalities. “We, as an association serving the restaurant industry, are always more effective
Map Source: National Restaurant Association (Restaurant. org/advocacy) MINIMUM WAGE MOMENTUM
Page 14
InRLA At Your Service: March 2014
if our members are engaged,” he continues. “In this case, to advocate for the industry, we need them to be more involved than usual. Operators need to be reaching out to public officials in their states and cities – not just senators and congresswomen/congressmen but mayors, governors, city councilmen, etc. Invite them into your restaurant and educate them about your business, about the industry. There’s rampant misinformation out there and they typically don’t understand a restaurant business model.” For example, Scott says, many policymakers try to apply full-time principles to the part-time employee model of the restaurant industry, so he urges restaurateurs to educate them about their part-time workforce – how old they are, why they work part time – and to talk about the low-skilled and entry-level workers they employ and the value of the training they provide. “Also, explain your thin pre-tax profit margins and how difficult it is for such a laborintensive industry, which already devotes about a third of sales to wages and benefits, to absorb cost increases,” he continues. “Discuss the ripple effect that increases in entry-level wages will have on the entire organization. Let them know that the revenue per employee is much lower than other industries, and that sometimes the server serving them is making more from that transaction than you are. When you explain things to policymakers who spend the time to understand, they get it and realize that they need to look beyond the polls. Sometimes the numbers behind what’s being proposed just don’t add up.” For more information about minimum wage legislation and advocacy, visit restaurant.org/advocacy/All-Issues/Minimum-Wage/ Overview STATE MINIMUM WAGE LEGISLATION IN 2013 According to the National Council of State Legislatures, during the 2013 legislative session, 34 states, Washington, D.C., and Puerto Rico introduced legislation regarding minimum wage issues. (Measures included providing for increases to the state minimum wage, addressing base wages for tipped employees, and restricting the authority of local government to enact or enforce a local minimum wage, among other issues.) Of that legislation, 23 states and Washington, D.C. proposed minimum wage increases. The legislatures in four states – CA, CT, NY, and RI – enacted bills that were signed into law providing for minimum wage increases starting in 2014. The legislatures in ME, NJ, and NM enacted increases but the measures were vetoed by each state’s governor. NJ voters subsequently approved a state constitutional amendment in November 2013 to raise the minimum wage in 2014 and tie future increases to the cost of living. For a listing of current minimum wages by state as well as future scheduled increases, visit the website of the National Council of State Legislatures.
InRLA At Your Service: March 2014
ONE OPERATOR’S PERSPECTIVE “To deal with rising labor costs, we are constantly trying to make the business more efficient. We are on top of everything from portion sizes and waste to trimming labor costs by staggering arrival and departure times for front of the house employees and eliminating overtime. As it’s not always possible to trim hours, we are considering a policy of closing 30 minutes early on some nights. We cannot change prices too dramatically right now but expect to have a fairly significant increase if the minimum wage were to jump approximately 40% in San Francisco (from $10.75 to $15), which has been proposed. The real challenge for small restaurants is that we don’t have much of a voice. We’re not very effective at getting our message across. We need to have people – politicians and the public – understand the challenges we face. Customers don’t need to be stressed out about our business model – they come to find a refuge and hang out with friends – but there has to be a way for them to understand the nature of our business.” Anjan Mitra, Co-Owner, Dosa, San Francisco, CA ----------------------------------------------------------ABOUT RESTAURANT BRIEFING Published bi-monthly by American Express, Restaurant Briefing is an online resource for restaurateurs. To view current/past editions and for a free subscription, past editions, visit restaurantbriefing.com To find out about more American Express services to help you grow your business, go to www.americanexpress.com/ restaurant Source: National Restaurant News FSVoice
2014 InRLA EVENTS
INRLA REVERSE TRADE SHOW April 24, 2014 4:00 - 6:00 PM Moore Restoration 3610 Shelby St., Indianapolis
InRLA AT YOUR SERVICE OPEN GOLF OUTING July 23, 2014 Tee Time: 11AM Eagle Creek Golf Course 8802 W. 56th St., Indianapolis
INRLA ANNUAL MEETING April 24, 2014 12:00 PM - 1:30 PM Moore Restoration - 3610 Shelby St., Indianapolis Page 15
APRIL 24, 2014 : 4:00 – 6:00 PM MOORE RESTORATION INC. 3610 SHELBY STREET, INDIANAPOLIS http://goo.gl/maps/NBHd0
Located just south of the downtown area. Join us for this unique event, where your customers are in the booths and YOU have the chance to visit the people you want to meet with. Food, Drink and Entertainment Provided. (It’s really a party for you) Hosted by:
InRLA Reverse Trade Show Registration Company ____________________________________________ Contact Name
________________________________________
Company Address
______
_____________________________ Fax _______________
E-mail address:
Please fill out this form if you plan on attending and return: $20 Per Attendee
QTY:
Total Enclosed:
_____________________________________
City_____________________________ St. _________ Zip Phone
CONFIRMED PARTICIPANTS SO FAR: John Benjamin - Scotty’s Brewhouse Jeff Brown - Schahet Hotels, Inc Diggy Chae - Weber Grill Rob Chinsky - Chinsky Restaurant Group, Inc Bruce Dodge - Applesauce Inc Vicki S. Farmwald - Hacienda Mexican Restaurants Peter-Paul Meyer - Hilton Indianapolis Hotel & Suites Chris O’ Donnell - White Lodging Corporation Phil Ray - JW Marriott Randy Shields - McDonald’s Keith Spinden - Hyatt Regency Indianapolis Jeff Sweet - Hilton Indianapolis Hotel & Suites Jake Wright - Weber Grill Stay tuned for more additions!
________________________________________
Attendees you are inviting:
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__ Check Enclosed
__ MasterCard __ Visa __ Amex __ Discover Card No. ________________________________________ CID No. ________ Exp. Date ________________________________________
1.
_____________________________________________________
Cardholder’s Name _________________________________________________________
2.
_____________________________________________________
Signature:____________________________________________________________________
3.
_____________________________________________________
RETURN TO: Indiana Restaurant & Lodging Association 200 S. Meridian St., Suite 350 Indianapolis, IN 46225 Fax: 317.673.4210
4. _____________________________________________________
For more info contact: Stephanie Higgins 317.673.4211, 800.678.1957(toll-free) shiggins@tammcapitalgroup.com