Main Ingredient - May June 2018

A PUBLICATION OF THE OREGON RESTAURANT & LODGING ASSOCIATION | MAY/JUN 2018

NARROWING THE INCOME EQUALITY GAP How Some Restaurants Are Exploring Alternative Solutions

also in this issue Legislative Session Synopsis TIP POOLING PAST AND FUTURE Employment Practice Liability

OregonRLA.org - 1

M A J O R S P O N S O R S: LUNCHEON

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Participation in this tournament benefits Oregon hospitality and is vital to the strength of our political action committee and the growth of our industry. All proceeds from the event directly support ORLAPAC’s mission to advocate for favorable business legislation.

SPONSORSHIP OPPORTUNITIES: Marla McColly, MMcColly@OregonRLA.org EVENT AND REGISTRATION: Jennifer Starr, JStarr@OregonRLA.org

2 - Main Ingredient - May /June 2018 OregonRLA.org/GOLF

FOURNIER GROUP GENERAL PARTS GNSA INDEPENDENT RESTAURANT CONCEPTS KENNEDY RESTORATION MY ACCOUNTING TEAM PORTLAND TRAIL BLAZERS SUMMIT CLEANING & RESTORATION

Prevent Donate

Compost By shifting how you handle

food around your kitchen, you can reduce food waste and improve your bottom line.

Coming in May: Listen to ORLA’s podcast series,

Boiled Down to learn more, OregonRLA.org/podcast

or download it from iTunes, or wherever you get your podcasts.

START NOW TO STOP WASTE FoodWasteStopsWithMe.org

OregonRLA.org - 3

PRESIDENT'S LETTER

We’re Fighting for Our Tip Pooling Past and Tip Pooling Future

M

oving forward it is officially legal to tip pool in Oregon under certain circumstances, according to the federal spending bill passed through Congress earlier this spring. The action taken in Washington D.C. abolishes the 2011 rule passed by the United States Department of Labor (DOL) which stated that tip pools in states like Oregon can only be allowed amongst employees who are ‘regularly and customarily’ tipped.

Removal of the rule means newfound flexibility and relief for certain segments of Oregon’s restaurant industry. However, in other cases, it’s still unclear.

Our fight for tip pooling freedom continues as we seek more clarity from the United States Supreme Court on our pending litigation. Here are some personal areas of concern which will require continued work on the part of your statewide association.

The Clear Tip Pooling Win The omnibus appropriations bill includes a bipartisan statutory provision to ensure that workers in the back-of-the-house (i.e., cooks, bussers, dishwashers) can participate in tip pools in states like Oregon. Clarity around this central issue will be welcome news for thousands of restaurant operations across the United States where there is no tip credit.

Is ORLA’s Court Case Over?

The congressional action makes tip pooling legal, moving forward in the circumstances described above, but we still have real problems with the period of time between April 2011 (when the DOL rule restricting tip pools began) through March 2018 of this year when the congressional action took place.

It is unclear due to the lack of court finality whether a decision will be rendered to protect restaurants who operated backof-the-house tip pools during these time periods. Our fight for the past remains active and our hope is the United States Supreme Court will ask the Ninth Circuit Court of Appeals to revisit their decision in ORLA’s case which we lost a couple years ago. A signal from the United States Supreme Court to the Ninth Circuit would be welcome news in addressing the ambiguity and inconsistency of past court decisions relating to tip pools.

What About My Supervisors and Managers Who Have Shared in Front-of-the-House Tips and Are Now Restricted From Doing So? This is an area of great concern for ORLA. A number of ORLA members have hybrid approaches to their service positions. Supervisors and managers in some of Oregon’s smallest restaurant operations commonly serve guests and have participated in front-of-the-house tip pools as a part of a team approach to foodservice.

In some cases, this reality extends to momand-pop restaurant owners who are also the janitor, cook, supervisor, etc.

enforcement policy, WHD (Wage and Hour Division) will use the duties test to determine whether an employee is a manager or supervisor.”

You can read more about this in our Advocacy Update section within this edition of Main Ingredient.

When Do We Expect to Hear More From the US Supreme Court?

The United States Supreme Court has been waiting on the United States Department of Labor and the United States Department of Justice (DOJ) to submit their response to our case. At the time of this writing, seven extensions have been requested by the DOL to respond to our case – an extremely rare occurrence. An eighth extension may be requested in the coming days, which would result in a new deadline for the U.S. DOL and U.S. DOJ to respond to ORLA’s case

by May 9, 2018.

Keep Up To Date In addition to the details provided in this issue’s Advocacy Update section, make sure to regularly visit ORLA’s website at OregonRLA.org for the latest news relating to our ongoing fight for tip pooling clarity in our nation’s highest court.

The relevant sentence in the omnibus appropriations bill states that “An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips…”

The words “supervisor” and “manager” were not defined in the spending bill.

The Department of Labor did release a Field Assistance Bulletin stating, “As an

JASON BRANDT, PRESIDENT & CEO, OREGON RESTAURANT & LODGING ASSOCIATION

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MAY / JUNE 2018 Main Ingredient is published six times a year by the Oregon Restaurant & Lodging Association (ORLA), 8565 SW Salish Lane, Suite 120, Wilsonville, Oregon, 97070, 503.682.4422, 800.462.0619.

Articles address issues, programs, news and trends important to Oregon’s foodservice and lodging industry. To learn more visit OregonRLA.org.

JOIN ORLA TODAY To become a member of the Oregon Restaurant & Lodging Association, please contact Jennifer Starr, JStarr@OregonRLA.org or 503.682.4422.

SUBMISSIONS For submission guidelines or other editorial input, please contact Lori Little at LLittle@OregonRLA.org.

ADVERTISING Please support the advertisers herein; they have made this publication possible.

For information on advertising opportunities, please contact Mt. Angel Publishing.

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541.968.3544 | Maggie.P@MtAngelPub.com

PUBLISHER Jason Brandt, President & CEO, ORLA EDITOR Lori Little, ORLA DESIGN Heidi Janke, ORLA

ORLA BOARD OF DIRECTORS Zach Poole, Chair, Pig ‘N Pancake Buggsi Patel, Vice Chair, BHG Hotels Jerry Scott, Secretary, Elmer’s Restaurants,

Features 18

| NARROWING

THE INCOME EQUALITY GAP

How Some Restaurants Are Exploring Alternative Solutions

Vijay Patel, A-1 Hospitality, Immediate Past Chair

Chris Bebo, Provenance Hotels Richard Boyles, InnSight Hotel Management Group Emma Dye, Crisp Treva Gambs, Gamberetti’s Italian Restaurant Terry Goldman, Canopy by Hilton Portland, Pearl District Wray Hutchinson, Buffalo Wild Wings Vickie Irish, Shari’s Restaurant Group Steven Johnson, Vip’s Industries Eli Katkin, Brickroom​ Masudur Khan, Seaside Lodging LLC Matt Lowe, Jordan Ramis Attorneys at Law ​Bobbie McDonald, Sysco

4 | President's Letter We’re Fighting for Our Tip Pooling Past and Tip Pooling Future

22 | Coverage for Claims Considering Employment Practice Liability Insurance (EPLI)

24 | Lottery Scholarships Assist Teachers with Additional Training Eugene Teacher Leads Students to National Competition

Dani Rosendahl, Treasurer, On Deck Sports Bar & Grill

John Barofsky, La Perla Pizzeria / Beppe & Gianni’s Trattoria

Membership

Government Affairs 6 | Legislative Short Session Synopsis 79th Legislative Assembly

27 | News Bites Information From Around the Industry

29 | Member Solutions

ORLA Cost-Saving Programs

Garnered Real Outcomes

8 | Advocacy Update

Your Association on the Front Lines Protecting the Industry

13 | Portland Kitchen Cabinet

Restaurants Focusing on Community and Civic Engagement

Tom O’Shea, Sunriver Resort Harish Patel, Hampton Inn & Suites Komal (Tina) Patel - Ex Officio Board Member, ALKO Hotels Michael Rowan, Deschutes Brewery & Public House ​Randy Xavier, Food Services of America

OregonRLA.org - 5

Legislative Short Session Synopsis 79th Legislative Assembly Garnered Real Outcomes

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he “short” Oregon Legislative session officially ended March 3, 2018. The Government Affairs team at ORLA worked diligently to pass several pieces of legislation and prevent others from passing. Working with other groups and organizations, some of whom we have not partnered with before, ORLA had a very successful short session on behalf of our industry partners.

most current available list of the musical works that the performing rights society licenses, in a format that the proprietor can search by title, publisher and performing artist; and

society must address communications to the proprietor’s attorney, except that a performing rights society or an agent or employee of the performing rights society may communicate directly with the proprietor or the proprietor’s employees if the attorney fails to respond to communications for a period of 60 days or more;

(c) A schedule of rates and terms under which the performing rights society will collect royalties under the contract, including the terms of any sliding scale or schedule for any increase or decrease of the rates for the duration of the contract.

(5) Engage in any coercive conduct, act or practice that is substantially disruptive to a proprietor’s business;

HB 4088 - Relating to Music Licensing ORLA, working in partnership with the Oregon Winegrowers and with the support of music licensing company BMI, introduced HB 4088 to help regulate how music licensing companies can engage restaurant operators about the playing and/ or performing of copyrighted music.

Further, a performing rights society or any agent or employee of a performing rights society may not:

(6) Use or attempt to use any unfair or deceptive act or practice in negotiating with a proprietor

(1) Enter onto the premises of a proprietor’s business to discuss or inquire about a contract under which the proprietor will pay royalties without first:

The bill prohibits certain activities by, and specifies additional duties for, performing rights society in notifying business proprietors concerning proprietors’ duties with respect to performing copyrighted musical works and in negotiating contracts for paying royalties for performing copyrighted musical works.

(a) Providing identification to the proprietor or the proprietor’s employees; and

(b) Specifying the purpose of the entry;

The bill was passed out of the House Business and Labor Committee and was carried on the House floor by State Representative Denyc Boles (R-Salem).

It passed 59-0 with one excused. On the Senate side, after passing out of the Senate Business and Transportation Committee, it was carried by State Senator Rod Monroe (D-Portland). It passed the Senate 29-0 with one excused and was signed by the Governor.

The following is an update on a few of the bills ORLA was working on and watching.

Essentially, the bill states: A performing rights society may not enter into, or offer to enter into, a contract under the terms of which a proprietor must pay royalties unless the performing rights society, at least 72 hours before entering into the contract, provides to the proprietor or an employee of the proprietor: (a) Information, at the proprietor’s request, as to whether specific copyrighted musical works are in the repertoire of the performing rights society; (b) An opportunity to review, electronically and free of charge, the most current available list of the performing rights society’s members or affiliates, and the 6 - Main Ingredient - May /June 2018

(2) Use abusive, profane or obscene language when communicating with a proprietor or the proprietor’s employees; (3) Communicate with a proprietor or the proprietor’s employees in person or by telephone in locations or at times other than in the proprietor’s place of business during regular business hours unless the proprietor’s place of business is not open to the public and the proprietor or an employee, agent or representative of the proprietor agrees to communicate in a different location or at a different time; (4) Communicate with a proprietor or the proprietor’s employees after receiving notice from the proprietor’s attorney that the performing rights society or an agent or employee of the performing rights

HB 4054 – Relating to the Removal of Personal Property (i.e., Homeless Camps) Although not a partner on this bill, ORLA was supportive of its passage.

The bill, which specifically allows the Department of Transportation to enter into an intergovernmental agreement with cities with a population of 500,000 or greater, (i.e., Portland,) creates an avenue for the city to continue their important work in cleaning up homeless camps regardless of whether the land is owned by the city or state.

The bill cuts down the number of days from 22 to two for notification purposes.

This bill passed 58-0 in the House with two excused and 27-0 in the Senate with three excused. The bill was signed by the Governor.

SB 1528 – Relating to Taxation; Creating New Provisions and Amending ORS 314.752 and 318.031 SB 1528 prevented so-called pass-through businesses — sole proprietorships, partnership, limited liability corporations and S-corporations — from deducting up to 20 percent of their business income from their 2018 tax return. The businesses may still claim the deduction on their federal taxes but not on their state taxes. ORLA opposed this bill and had encouraged our members and the hospitality industry to contact the Governor and ask her to veto it.

Despite strong opposition from Oregon’s small businesses, the Governor signed the bill into law and at the same time, called for a special session this June to address the issue of sole proprietorships. Sole proprietors are currently excluded from Oregon’s lower pass-through rates and the Governor has indicated she wants the special session to rectify this issue.

The bill passed on a party line vote and may be challenged in court by State Senator Brian Boquist (R-Dallas).

HB 4120 – Relating to Short-Term Intermediary Lodging Tax Payments In 2003, the Tourism Investment Program (HB 2267) was adopted, establishing the statutory framework for the transient lodging tax program. Third-party intermediaries have always played a role in short-term lodging and that role has increased as new short-term lodging models emerged in the marketplace and consumers more frequently turned to multiple online platforms to compare prices and make their vacation plans.

In 2013, we believe the Legislature passed bills intending to treat shortterm rental intermediaries the same as

traditional hotels, motels and other lodging establishments who pay the transient lodging tax to the state, counties and cities.

Unfortunately, some of these third-party short-term rental intermediaries have refused to pay taxes unless a voluntary collection agreement is signed and even then, the agreement stipulates no sharing of data between the short-term rental intermediary and the city or county.

Cannon Beach recently rejected a voluntary collection agreement due to a lack of transparency and the inability to properly audit, thereby ensuring they were receiving the correct amount of transient lodging tax.

The need to statutorily clarify that shortterm rental intermediaries are responsible for collecting and remitting the transient lodging taxes was reinforced in 2016 by the HB 4146 Work Group and as a result, HB 2049 was introduced in the 2017 session.

This session, ORLA worked with the League of Oregon Cities and State Representative Pam Marsh (D – Ashland) to help introduce HB 4120, which requires short-term intermediaries like Airbnb to collect lodging taxes when they’re already collecting the lodging stay payment. After passing out of committee, HB 4120 was supported widely through a bipartisan vote (52-8) in the State House of Representatives. The bill then moved over to the Senate and to the Senate Finance and Revenue Committee where State Senator Mark Hass (D - Beaverton) led the committee in support of a 5-0 vote recommending passage to the rest of the Senate. Another member of the Senate Committee, State Senator Alan DeBoer (R - Ashland), carried the bill on the Senate floor to a 26-1 vote for a major hospitality win. The bill was signed by the Governor. | GREG ASTLEY, OREGON RESTAURANT & LODGING ASSOCIATION

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ADVOCACY UPDATE

Your Association on the Front Lines Protecting the Industry

O

RLA’s government affairs team is on the front lines promoting and protecting the foodservice and lodging industries of Oregon. By advocating for public policies that sustain our industry and educating elected officials about the issues and challenges our industry faces, we serve as the voice of hospitality at the local, state and national levels.

NATIONAL ISSUES

TIP POOLING: WHAT ABOUT MANAGERS AND SUPERVISORS? The editorial at the front of this magazine covers the new law allowing tip pooling in non-tip credit states and offers more insight into ORLA’s legal battle around this issue.

Another important piece of this issue is the Consolidated Appropriations Act of 2018, which was passed recently by Congress and signed by President Trump.

The Act is significant in that it contained a provision amending a previous rule regarding tip pooling in states where no tip credit is taken.

Specifically, employers who pay the full Fair Labor Standards Act (FLSA) minimum wage can now allow employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools.

The Act does prohibit managers and supervisors from participating in tip pools, 8 - Main Ingredient - May /June 2018

however, as the Act equates such participation with the employers keeping the tips.

As an enforcement policy, the U.S. Department of Labor’s Wage and Hour Division (WHD) will use the duties test at 29 C.F.R. § 541.100(a)(2)-(4) to determine whether an employee is a manager or supervisor for purposes of section 3(m).

WHD expects to proceed with rulemaking in the near future to fully address the impact of the 2018 amendments and help clarify definitions for managers and supervisors.

The Act also provides enforcement authority in the FLSA sections 16(b) and 16(c) to, among other things, recover all tips unlawfully kept by the employer, in addition to an equal amount in liquidated damages.

There will be more information forthcoming as rulemaking occurs and as ORLA’s court case continues to wait for action by the Supreme Court of the United States. As always, we’ll keep you up to date through our website, emails, social media and in our regional conversations across the state.

ADA REFORM The House recently passed H.R. 620 reforms which improves the Americans with Disabilities Act (ADA) by adding a “notice and cure” provision aimed at reducing the number of “drive-by” lawsuits filed against businesses by unscrupulous trial attorneys.

ORLA is working with the National Restaurant Association in pushing for the U.S. Senate to introduce a companion bill.

JOINT-EMPLOYER The NLRB recently vacated their ruling overturning the Obama-era joint-employer standard. It has been determined that one of the NLRB Commissioners should have recused himself from the case due to a conflict of interest. While H.R. 3441 passed the House in 2017 (which codifies the “direct control” standard of joint-employer liability into law), we are pushing for the Senate to introduce a companion bill.

STATE ISSUES

LOTTERY UPDATE The current lottery contract with the state expires in 2020 and with that in mind, ORLA has reactivated our Lottery Committee. Chaired by Roger Nyquist and Jim Lampus, the Lottery Committee will be working over the next 18 months to develop and negotiate terms for the next lottery retailers contract.

At our first meeting this last month, ORLA invited Lottery Director Barry Pack and Chief Gaming Operations Officer, Farshad Allahdadi to speak to the group. Lottery members heard first hand some of the upcoming advancements in lottery gaming as well as the future of the Lottery as it pertains to new games, new accessibility and how they interact with retailers and players.

The Committee also discussed the upcoming lottery contract negotiations and timeline.

In anticipation of the contract negotiations, the Oregon Lottery will be conducting a “road show” later this year, scheduling meetings around the state to talk directly with Lottery retailers. In addition, ORLA is planning on hosting meetings every two months with our Lottery Committee to keep dues paying members informed and discuss the contract. ORLA’s government affairs team also plans to be in attendance at the Oregon Lottery’s road show meetings.

For more information, contact Greg Astley, Director of Government Affairs, at Astley@OregonRLA.org.

SCHEDULING UPDATE After SB 828 passed in the Oregon Legislature last year, the next step was to hold rulemaking sessions to clarify parts of the bill that may have been unclear or warranted additional conversations.

After two of those rulemaking sessions, the Oregon Bureau of Labor and Industry (BOLI) is moving on to a public hearing process.

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The public hearing will be announced at the end of the April and will likely be scheduled for mid- to late-May. The bill goes into effect July 1, 2018.

ORLA, along with others in the business community, have been present at those rulemaking sessions to help reinforce the legislative intent of the bill, protect those parts of the bill we negotiated so successfully and ensure any clarifications do not actually expand the impact of this law.

Parts of the bill being clarified in rulemaking include: • Definitions • Covered Employees and Integrated Enterprises • Good Faith Estimate of Work Schedule • Advance Notice of Work Schedule • Right to Rest Between Work Shifts • Record Retention Requirements • Employees Covered by Collective Bargaining Agreements or Other Contracts • Unlawful Employment Practices • Civil Penalties BOLI is currently rewriting these pieces after input and discussion at the two rulemaking sessions. Once a final version is available from BOLI, we’ll post it and the information about the public hearing, so any interested parties can appear and testify if they choose.

LOCAL ISSUES

HOOD RIVER SALES TAX AVERTED Hood River County recently took public comment on a proposed two percent “sales and tourist” tax to help pay for public safety programs, transportation infrastructure, county parks, and public health. Purchases of groceries, fuel, and prescription medicine would be exempted from the tax.

Hood River would be the only County in Oregon with such a tax if passed by voters. At a recent meeting, almost 90 people showed up with more than 20 speakers weighing in on the concept, most condemning the tax. The crowd overflowed from the county building’s conference room into the hallway.

10 - Main Ingredient - May /June 2018

Even after looking at a 1.25 percent sales tax, County Commissioners ultimately decided not to place it on the ballot.

ORLA was in opposition to this tax and wrote the Commissioners detailing our position and offering to help with alternative solutions.

SOUTHERN OREGON WINERY FOODSERVICE ISSUE RESOLVED For several years, southern Oregon restaurant operators have noted that a few local wineries were operating as restaurants but outside of statute and land use laws. In addition, these operations lacked foodservice licenses and were outside of the county environmental health department inspection process. This activity was considered unfair competition, especially in the case of one winery, against whom a formal complaint was lodged.

Throughout 2017 the newly formed Jackson County Restaurant Alliance (JCRA), with ORLA participation, met many times with the Southern Oregon Winery Association, Department of Land Conservation and Development, Jackson County Commissioner Bob Strosser, Jackson County Counsel, Jackson County Planning Director and Oregon Winegrower’s Association.

After those meetings, Jackson County has taken an additional step to further clarify foodservice. The County issued a Type 1 Land Use Review - Condition Modification for the complaint giving definition/ clarification to foodservice which would apply to ALL wineries. It is great news for the restaurant industry that the county has spoken. This new modification brings the foodservice definition into a much narrower interpretation and clarifies foodservice rules for wineries.

What does this all mean? The county has spoken, and if another complaint is filed for a winery acting as a restaurant and not a tasting room, there is now an established precedent. The County’s legal responsibility is enforcement of land use laws once a complaint is filed. This development, accomplished as a result of persistent proactive work on the part of southern Oregon restaurateurs, has implications for the

entire state. It helps establish the rules of the game in the longtime partnership between two of our state’s signature industries.

REGIONAL MEETINGS

STAY UP-TO-DATE AT GRASSTOP CONVERSATIONS WITH ORLA Engage in a discussion with industry peers on issues that matter to your business. Regional meetings provide an informal, roundtable forum for members to gain insight and intelligence, exchange ideas, and ask questions. Hot topics for discussion include: • • • • • •

2018 legislative session recap Local government wins Tip pooling lawsuit update Paid family leave OregonSaves employee retirement plan Your business concerns

UPCOMING MEETINGS Wed - May 9, 2018 - Hood River Hood River Hotel | 1:30 p.m.

RSVP to Representative: Steve Scardina SScardina@OregonRLA.org 503.718.1495 Tue - May 15, 2018 - Portland Lompoc Brewing Sidebar | 1:30 p.m.

RSVP to Representative: Steve Scardina SScardina@OregonRLA.org 503.718.1495 Thur - May 24, 2018 - Salem Ritter’s Housemade Foods | 2:30 p.m.

RSVP to Representative: Marla McColly MMcColly@OregonRLA.org 503.428.8694 Thur - June 7, 2017 - McMinnville The Bindery Event Space | 2:30 p.m.

RSVP to Representative: Marla McColly MMcColly@OregonRLA.org 503.428.8694 Also coming this Spring 2018 • Lincoln City • Pendleton Visit ORLA’s website at OregonRLA.org for the latest schedule of regional meetings.

Let us know if you are interested in hosting a meeting in your area. | GREG ASTLEY, OREGON RESTAURANT & LODGING ASSOCIATION

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Oregon Restaurant & Lodging Association’s One Big Night annual dinner and fundraising auction provides an opportunity to mingle with hospitality industry leaders and make invaluable connections while supporting ORLA’s Political Action Committee and the election of pro-industry candidates.

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Altabira City Tavern at Hotel Eastlund

Building | Renovating | Revitalizing

Seattle | Portland | Sacramento | Pleasanton | Irvine Deacon half page for ORLA - Main Ingredient May-June 2018 DRAFT.indd 1

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deacon.com 3/28/2018 11:26:50 AM

Portland Kitchen Cabinet Restaurants Focusing on Community and Civic Engagement Women Who Stir the Pot event at No Bones Beach Club

T

he Portland Kitchen Cabinet (PKC), a Portland-based civic engagement program, has been busy so far this year and has plans to continue working with elected officials on issues important to the growth and success of the city and the restaurant industry.

Below are some of the projects the Portland Kitchen Cabinet is currently engaged in.

Women Who Stir the Pot In honor of Women’s History Month, the Portland Kitchen Cabinet held a networking event for women in the restaurant industry on March 13, at No Bones Beach Club.

This event recognized some of the countless contributions women in the restaurant industry have made in Portland and the surrounding area.

“As a fundamental part of American culture, the restaurant industry provides female entrepreneurs in every community the opportunity to start and run their own business. In fact, 61 percent of adult women said they have worked in the

restaurant industry at some point during their life. With the number of womenowned restaurant businesses increasing 40 percent between 2007 and 2012, the future has never been brighter for women in our industry,” said Lori Little, Director of Communications for the Oregon Restaurant & Lodging Association (ORLA).

• Emma Dye of Crisp • Katherine Lam of Bambuza Vietnam Kitchen • Liz Hanna of Mad Hanna • MacKenzie DeVito of No Bones Beach Club • Madison Wolff of No Bones Beach Club • Renee Gorham of Toro Bravo

The restaurant industry contributes an estimated $799 billion to the U.S. economy – and supports 193,700 jobs in Oregon alone. The Kitchen Cabinet is proud to partner with ORLA and the National Restaurant Association who collectively are committed to celebrating the many accomplishments of women in the restaurant industry year-round.

Community and Legislative Initiatives The Portland Kitchen Cabinet, which meets regularly every other month, is working on two community engagement initiatives and one legislative initiative this year.

Several women were recognized at the event for their contributions and commitment to the restaurant industry, including MacKenzie DeVito of No Bones Beach Club who also hosted this event. The list of local restaurateurs highlighted include:

Cocktails for a Cause Travel Portland, along with members of the hotel industry in Portland, are working together on a cocktail program to show the collective power of our industry while giving visitors a chance to have a positive impact on the community during their visit. Hotels are signing up for the Charity Cocktail program and donating $1 from every Charity Cocktail sold to local nonprofit organizations like Transition Projects’ OregonRLA.org - 13

Lois & Rex Robertson Little Lois Cafe, Salem

“Just as we work hard to deliver amazing lunches to our customers, ORLA works hard to deliver amazing unity, support and advocacy! What a team!�

JOIN NOW! With strength in members comes a stronger voice for the industry. To learn how being a part of ORLA can help you, contact Membership@OregonRLA.org or call 800.462.0619.

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Mobile Engagement Unit and New Avenues for Youth Service Industry Training & Placement Program. The Portland Kitchen Cabinet has received information on this program and will be discussing a potential partnership at the next meeting.

participating restaurants can choose the contribution of their choice.

Veterans Day Event The Portland Kitchen Cabinet is looking to create an event celebrating and honoring America’s veterans this fall. Many veterans work in the restaurant industry, either in the establishments or as owners, and this event will help bring recognition to those who have served our country.

Legislative Initiative The Portland Kitchen Cabinet is currently exploring local legislation that would offer a substantial rate discount in support of restaurants that are in full compliance of fats, oils and grease requirements.

Currently, the PKC is setting up meetings with Commissioner Dan Saltzman to discuss the idea.

Chow Down for Veterans, a group providing services statewide to post-9/11 war zone veterans and their families, has been invited to share their mission and talk about their event at the next Kitchen Cabinet meeting on May 7. Each year, they host a special dine-out night for vets and

About The Portland Kitchen Cabinet is a partnership project between the Oregon Restaurant &

The PKC hopes to have a kick-off event in early November to promote the Veterans Day event.

Lodging Association and the National Restaurant Association. The Portland Kitchen Cabinet is a civic engagement program committed to growing and preserving opportunity in the restaurant industry and strengthening the communities in which we live and work. The Kitchen Cabinet is focused on establishing a working group of informed, active and motivated hospitality community members to serve as industry ambassadors. It is designed to build bridges and foster long-term relationships with local elected officials and the community. It is completely free to join, and everyone who works in the industry is encouraged to join. Portland is one of 25 different

Restaurant members interested in joining the Portland Kitchen Cabinet and helping or participating in these efforts should contact Jen Fox JFox@restaurant.org. | GREG

markets where a Kitchen Cabinet exists and the only one on the West Coast.

ASTLEY, OREGON RESTAURANT & LODGING ASSOCIATION

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[

NARROWING THE INCOME EQUALITY GAP

]

How Some Restaurants Are Exploring Alternative Solutions

T

he welcome change legalizing tip pooling for noncustomarily tipped employees came at a good time.

Restaurants are struggling more than ever to find and retain quality employees due to a number of factors such as low unemployment, competition for qualified labor, and increased pressure on wages. The rising minimum wage rate has contributed to high inequality of income between the front and back-of-the-house, prompting restaurant owners to find progressive solutions for more stability in their workforce.

“Currently the national average for turnover in the hospitality industry is 72.9 percent, which is as high as it’s ever been,” said Bruce Porter, founder of Bruce Porter Hospitality 2 Operations (bph2o), a consulting firm focused on restaurant operations and challenges facing the industry. “A larger amount of that turnover is taking place in the kitchen, and one of the contributing factors is income disparity. Trying to find a way that the playing field can be leveled to some degree will help relieve that turnover.”

A number of Oregon restaurants are implementing new practices designed to decrease income disparity and incentivize good employees to stay. For example, last year all of the restaurants owned by Toro Bravo Inc. (which include Toro Bravo, Tasty n Sons and Mediterranean Exploration Company in Portland) added a kitchen tip line to their checks. This change allows guests to split their tip between the front and back-of-the-house as they see fit. They can also leave a tip and ask the company to split it for them. In those cases, 80 percent goes to the server and 20 percent goes to the kitchen.

Owner Renee Gorham said the policy is working well. “What we found was it created better service in the front-of-the-house because it created healthy competition. It’s also brought the front-of-the-house and back-of-the-house together. It added to that philosophy that we’re all one team in getting that plate on the table.”

When Toro Bravo first implemented the policy, their servers worried they’d make less money. In reality, they’ve ended up earning the same or even slightly more. Back-of-the-house staff now earn an additional three to five dollars an hour.

It was very important to company leaders that the tipping policy be 100 percent transparent to employees as well as customers. Toro Bravo’s website has a blog post that describes the tip lines in more detail. Servers are provided with talking points and trained to explain the concept to diners who are unfamiliar with it. That was a very important part of getting customer buy-in, Gorham said.

In her view, the biggest downside to the policy is that it creates more work come payday. Tips are added to people’s paychecks rather than being doled out as cash every day, which means the payroll staff has to put time into calculating them and dividing them up. Otherwise, she’s very happy with the change.

Customers seem to be, too.

“A handful of guests go, ‘Why do I have to do the math?’ or ‘Aren’t you paying people a living wage?’” she said. But most are interested and grateful for the opportunity to split their tip.

OregonRLA.org - 19

As of July 2017, El Gaucho in Portland began adding a 20 percent service charge to all checks. “One advantage to a service charge is that it isn’t impacted by the ups and downs of regulations around tipping,” said Chad Mackay, CEO of Fire & Vine Hospitality.

“This model allows us to pay our kitchen staff top of the market wages and our servers are doing better than ever,” he added. “Our company’s legacy is built on the belief that legendary service is provided by a team – not just one person.

For the last 20 years, we have been committed to compensating all employees, both front and back-of-the-house, as the professionals they are. This model ensures that our team will thrive, our guests will continue to receive an outstanding experience and our company is well positioned for the future.”

Porter believes service charges will begin showing up more often in Portland and other Oregon cities. “I was in a meeting recently with an owner of a large restaurant group who had just come back from a weekend in Seattle. Seattle is a test run for Portland because they’re two years ahead of us on this increase in minimum wage. He said they went to four restaurants and three of the four had a service charge of 20 percent.”

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ON L I N E R E SOU R C E S EL GAUCHO’S MODEL EXPLAINED: Service Charge 101: How this model works for us ElGaucho.com/service-charge-101-model-works-us/ TORO BRAVO INC.’S PHILOSOPHY: A Note About Our Kitchen Tip Line, Fair Wages, Tip Pooling, And Transparency ToroBravoInc.com/news/kitchen-tip-line ORLA MEMBER RESOURCE: Guidance on Service Charges in Oregon OregonRLA.org/GA ORLA’S BOILED DOWN PODCAST: Episode 2: The Gratuity Free Restaurant 01.23.2017 Scott Dolich and Andy Fortgang discuss the cultural shift for both guests and employees in their restaurants, plus offer advice for others thinking about implementing a no-tipping system. OregonRLA.org/podcast IRS GUIDANCE: Tips Versus Service Charges: How to Report IRS.gov/newsroom/tips-versus-service-charges-howto-report

City-wide service charges are also being implemented in some large communities. “In San Francisco, when you dine out almost every restaurant has a five percent or so service charge for ‘Healthy San Francisco,’ which helps offset the cost of paid time off and insurance for restaurants,” said Porter.

“One thing to note about adding a service charge, which we do at our event space, is that the restaurant pays taxes on it as if it’s income, making it entirely up to the house to split as they see fit or even keep any percentage for themselves,” Gorham pointed out.

There are plenty of other options for equalizing pay in restaurants. “Danny Meyer [owner of Union Square Hospitality Group in New York City] made a huge move to eliminate tipping in all of his restaurants,” said Porter. “He just put the 20 percent on the menu so you’re paying for everything including the service. Then you have places like Park Kitchen in Portland.

They refer to their model as ‘one house,’ where the people who cook the food serve the food and there’s no gratuity.” This only works in smaller settings, he acknowledged.

“The other thing operators are trying to do is figure out ways to have benefits that make their operations a great place to work, thereby slowing down turnover,” Porter said. “In some places

it might be paying for people’s bus passes. In some restaurants they offer parking. In other restaurants it’s education. If you want to go get certified as a sommelier, the operation will pay for a portion of that.”

Another option is to offer alternative schedules. “Irving Street Kitchen converted to a four-day work week for our hourly backof-house employees a year and a half ago,” said general manager Anna Caporael. “We felt like this offered them a more livable schedule and the ability to monitor hours more effectively from a financial perspective.

“We also worked hard last year to offer our full-time employees health benefits,” she said. “Because our kitchen staff tends to all work over 30 hours a week that has definitely benefited those staff members. It is such a physically challenging profession to work in a kitchen. We want to make sure our staff has access to taking care of themselves.”

As laws evolve and labor costs continue to rise, there will be an even greater need to lower expenses and maximize resources.

When restaurateurs are able to come up with creative solutions such as these, they can be a good step toward happy, healthy employees working for you. | SOPHIA BENNETT

OregonRLA.org - 21

Coverage for Claims Considering Employment Practice Liability Insurance (EPLI)

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rom Hollywood mogul Harvey Weinstein to famed television anchor Matt Lauer, to thousands of others speaking out through the social media movement #MeToo, sexual harassment allegations from individuals who claim to have been victimized by their employers and colleagues continue to surface.

Yet these are only the high-profile cases, and symptomatic of a larger issue of abuses by those in position of power in the workplace.

Although some managers have always behaved poorly, the attention being

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Oregon Restaurant & Lodging Association

Of course, sexual harassment is not the only type of bad management behavior that can result in claims. Today’s landscape, with its decreasing enforcement of political correctness, is allowing some managers to do or say what they will, with the feelings that they cannot be held accountable for their words or actions. In a recent case, a manager was accused of being racially insensitive by complaining to an employee about an ‘ethic’ food. This type of behavior is leading to an increase of discrimination claims.

More companies are purchasing EPLI now than in the last ten years, mostly because employees are becoming more aware of their rights.

An employee filing a lawsuit is much more likely to occur than a fire to your business. |

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Lottery Scholarships Assist Teachers with Additional Training Eugene Teacher Leads Students to National Competition

M

artha Humphreys serves up a valuable lesson about the restaurant industry each day through her ProStart and other culinary classes at Willamette High School in Eugene. The classes offer students a taste of working in the restaurant industry, provide college credits and can lead to jobs before they graduate.

The next course in Humphreys’ culinary classes is taking a group of students to Rhode Island to compete in the National Restaurant Association Educational Foundation’s National ProStart Invitational. Humphreys and her students recently won the statewide ORLAEF ProStart Invitational in Salem and qualified for the national competition.

“It’s always a great feeling to win the state competition after practicing so much and teaching students to be ‘winners!’” she said.

“They learn so much from the process. We came a long way from when we first started practicing and competing.”

The ProStart program gives students the opportunity to learn about the art of cooking and managing restaurants by providing training with professional chefs and valuable classroom instruction. Teachers of these classes are urged to get ServSafe training and certification to make sure they know the 24 - Main Ingredient - May /June 2018

fundamentals of food safety and management practices in the foodservice industry.

“ServSafe is really an advanced food handlers program which is more comprehensive and involved,” said Jason Brandt, President and CEO of the Oregon Restaurant & Lodging Association. “It’s important for teachers to have that classification so they are teaching best practices. ServSafe certification is something food inspectors look for and the more you can have crossover from the real world into the classroom, the better prepared students are.”

While the ServSafe classes are held around the state for restaurant managers and food handlers, for teachers finding the resources to attend the classes is a challenge, Brandt said.

“That’s why we are partnering with the Oregon Lottery and are happy to offer scholarships for teachers who are in the business of educating tomorrow’s workforce,” Brandt said.

He said close to a dozen teachers had already taken the class, and thanks to the Lottery, scholarships offset some of the costs of the training. Oregon Lottery dollars have assisted local teachers with the training from Colton to Cottage Grove.

“ProStart’s not the least expensive program, but it’s very effective,” Brandt said. “We are always looking for ways to save them money with food costs or other expenses.

Our goal is to make sure students have a quality program and the partnership with the Lottery is helping with that.”

Humphrey’s said she felt the training assisted her in getting her students ready for the statewide competition, which lead to a trip to the national competition.

“The ServSafe training is always valuable when teaching students about serving safe food, especially during competition,” she said. “The scholarship gave me the opportunity to take the course and pass the information on to my students and culinary team. Without the scholarship, I probably would not have taken the course.”

Now Humphrey’s will take her team to the national competition April 27-29 in Providence, Rhode Island.

“You never know how a team will do,” she said. “It always depends on the competition from other states, the judge’s personal opinions and if the team performs everything to perfection!” | OREGON LOTTERY

Title Sponsor:

CONGRATULATIONS! Oregon high school chefs and innovators went head to head in competition at the ORLAEF ProStart Invitational, sponsored

by Sysco. Top competitors received a share of over $675,000 in scholarships and prizes. The winning teams advanced to the National ProStart Invitational in Providence, RI. Culinary Competition 1st: Willamette High School 2nd: Bend High School 3rd: McMinnville High School​ Management Competition 1st: Bend High School 2nd: South Salem High School 3rd: McMinnville High School

Thanks to all those who make this special event possible!

Major Sponsor:

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MENTOR your local high school students and lend a hand.

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CONTACT Wendy Popkin, executive director, ORLA Education Foundation to learn how you can make a difference.

503.682.4422 | WPopkin@OregonRLA.org

Product Sponsor:

Product Sponsor:

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School Sponsor: Togather Restaurant Consultants In-Kind Sponsors: • The Grand Hotel • Hampton Inn by Hilton • Johnson Controls • Phoenix Inn • Salem Convention Center

OregonRLA.org - 25

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VENDOR SHOWCASE • ABC Enterprises, Inc. • Acculock • Alice • Certified Folder Display • Creative Lighting Company • Crystal Investment Property • Deacon Construction • Dr Pepper Snapple Group • Dyson • Elliott, Powell, Baden & Baker • Energy Trust of Oregon • Enterprise Merchant Services • Fisher Phillips • Fournier Group • GNSA • GE Appliances/Hospitality Supply • HospitalityVision • Liberty Mutual Insurance • Luminant Digital Security • McDonald Wholesale • SAIF • Snag • SeQuential • Serta • STR • Summit Cleaning & Restoration • Togather Restaurant Consultants

REGISTER YOURSELF AND YOUR MANAGEMENT TEAM TODAY | 800.462.0619 | #ORLACON18 26 - Main IngredientOREGONRLA.ORG/CONVENTION - May /June 2018

MEMBERSHIP

NEWS BITES

Information from around the industry Help ORLA Protect Your Checkbook Ten years ago Oregonians smartly passed a constitutional amendment requiring any tax increase be approved by a supermajority of both the State House and State Senate. Now, since our state legislature can’t get a supermajority to vote for a tax increase, they are creating and increasing “assessments” and “fees” that are really tax increases - because they only need a simple majority to implement and raise fees and assessments. We need you to visit EndEasyTaxHikes.com/ORLA and add your name to a citizen initiative petition to prevent the legislature from using gimmicks and loopholes to raise taxes easily. It’s time to put a stop to this… a tax is a tax.

Menu Labeling Compliance The National Restaurant Association (NRA) recently met with the White House to discuss the upcoming menu labeling regulations and to underscored the importance of preserving the May 7, 2018 compliance date. NRA reiterated our industry’s concerns that any delay could lead to additional state and local enforcement measures, confirming the Administration remains fully committed to the compliance date. The FDA’s final rule on food labeling, Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments, applies to restaurants and similar retail food establishments if they are part of a chain of 20 or more locations, doing business under the same name, offering for sale substantially the same menu items and offering for sale restaurant-type foods. For more information visit bit.ly/2018MenuLabeling.

McDonald’s to Roll Out Fresh Beef Quarter-Pounders In March 2017, McDonald’s USA announced the switch to fresh beef, cooked right when ordered, quarter-pound burgers as a part of a broader commitment to bring customers more craveable and delicious food offerings. The move to fresh beef quarter-pound burgers is also one of the latest customer-led initiatives in the U.S. that builds on several other recent milestones, including All Day Breakfast, committing to only sourcing cage-free eggs by 2025 in the U.S. and serving chicken not treated with human antibiotics. Rollout to approximately 8,500 restaurants, including Portland, was completed last month concluding with the rest of participating U.S. restaurants by early May. For more information on McDonald’s initiatives, visit McDonalds.com.

WELCOME | ORLA would like to welcome these new members from February and March 2018 • A Cena Ristorante - Enoteca, Portland • Astoria Golf & Country Club, Astoria • Best Western University Inn and Suites, Forest Grove • Big Horse Brew Pub, Hood River • Biokleen, Vancouver, WA • Black Bear Diner, Bend • Caldera Brewery & Restaurant, Ashland • Club DV8, Portland • Corey’s, Bend • Country Grains, Aurora • Davis Restaurant & Bar, Eugene • The Deck, Inc., Portland • Driftwood RV Park, Brookings • Ebb-Tide Oceanfront Inn, Cannon Beach • Gilbert Inn, Seaside • Holiday Farm Resort, Rainbow

• • • • • • • • • • • • • • • •

Inn at Northrup Station, Portland International Motel Brokers, West Linn Jack’s Tally Ho, Talent Joseph’s Deli, Portland Laborworks Industrial Staffing Specialists, Inc., Gig Harbor, WA Lanai at the Cove, Seaside Lee’s Restaurant, Lincoln City Mainbrew, Hillsboro Makoto Japanese Restaurant, Eugene MeazureUp, Toronto, ON Morrton’s, Medford Nathe Nest, Jacksonville Olde Stone Village, McMinnville Patrice & Associates Northwest Region, Canby Pilot Butte Drive In Restaurant, Bend Pit Stop Tavern, Medford

• • • • • • •

The Point Restaurant, Sweet Home The Porter Hotel, Portland Quality Inn & Suites Coos Bay Ranch Drive Inn, Hood River Sporthaven Marina Bar & Grill, Brookings Starfish Point, Newport Tortuga Mexican Bar and Grill, Gold Beach

READY TO JOIN? Give us a call or email to discuss membership or sign up online now!

800.462.0619 Membership@OregonRLA.org OregonRLA.org

OregonRLA.org - 27

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EXISTING SAIF CUSTOMERS: Ask your agent or contact SAIF directly at 888.598.5880 for an ORLA Group quote.

NOT A MEMBER? Contact ORLA at Membership@ OregonRLA.org or call 800.462.0619.

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Membership in ORLA means being a part of the only organization in the state devoted to protecting and promoting the interests of the hospitality industry.

Contact us for questions; let us know what issues are affecting your business and how we can help. We have your back!

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STEVEN SCARDINA Regional Representative 503.718.1495 SScardina@OregonRLA.org JOEL POMERANTZ Regional Representative 541.517.3791 JPomerantz@OregonRLA.org

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MARLA McCOLLY Director of Business Development 503.428.8694 MMcColly@OregonRLA.org GOVERNMENT AFFAIRS CONTACTS:

JASON BRANDT President & CEO 503.302.5060 JBrandt@OregonRLA.org GREG ASTLEY Director of Government Affairs 503.851.1330 Astley@OregonRLA.org GLENDA HAMSTREET Executive Coordinator Government Affairs 971.224.1509 GHamstreet@OregonRLA.org OREGON RESTAURANT & LODGING ASSOCIATION:

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