Since the 2016 election ended, many have wondered how their lives will change going into 2017 and beyond. The future administration will most likely have very different priorities compared to the current administration. Businesses of all shapes and sizes have questioned their own preconceived notions about upcoming legal restrictions, labor issues, and other costs; and restaurants throughout the food industry are no different.
Still, it can be difficult as an owner or manager to wrap your mind around the various moving parts of the industry and how things could change with the transition of power. Here are some aspects to keep an eye on in the new year and in general going forward.
One thing many restaurateurs have been preparing for are the menu labeling requirements slated to go into effect on May 5th, 2017 for many different kinds of restaurants throughout the US. We’re still not sure what the state of the FDA will be coming up, and we also don’t know if those menu labeling deadlines will be staying in place.
If you were already planning to add menu labeling to comply with the new rules, playing it safe and assuming the deadlines will stay the same could be a good idea. Better to be prepared to make those changes on time than make the wrong assumption and not be ready to apply those changes by the deadline.
Fair Labor Standards Act
As of right now, President-elect Trump has said he supports overturning the maximum annual salary level set by the Obama administration under the Fair Labor Standards Act (FLSA). This order would have allowed the maximum annual salary for employees to eligible to receive overtime pay go from $23,660 to $47,476 (meaning from pre-tax $455/week to $913).
This change was supposed to start this month, but a Texas federal judge blocked the new rule, suggesting that the FLSA does not give the Labor Department the authority to impose a salary cap for overtime-eligible employees. Even if the current administration is able to negate the hold, the upcoming administration is already planning an immediate executive plan to take it off the table or the Labor Department may just withdraw its appeal if the change doesn’t go into effect by Inauguration Day on January 20, 2017.
The FLSA also includes the Overtime Pay rule, which was created to help an estimated 4.2 million workers become eligible to earn overtime. The rule has been in place as of December 1, but it might not stick. Thanks to a provision in the Congressional Review Act, Congress can vote to repeal the regulation within 60 legislative days. And since the incoming Republican-controlled Congress is already not a fan of this rule, the chances that they’ll repeal it are high.
Another employment issue sure to be debated in the next year will be minimum wage. The Republican-controlled Congress looks to firmly oppose any sort of minimum wage raise at the federal level.
That being said, the Fight for $15 campaign has already found successes in some of the larger cities around the country, including New York, Seattle, Los Angeles, San Francisco, and Washington, DC, itself. If activists in other areas of the country are able to push legislation on the state level, there could still be significant minimum wage raises across America in the upcoming years. Being aware of what’s happening with minimum wage in your own state will be important for all restaurant owners.
Whether and/or how the FDA will change under this new administration in 2017 is still unclear. There could be other proposed regulations (besides food labeling) put on hold, or there could be outright regulation reversals. However, it’s crucial as a business in the food industry to keep an eye on the FDA in the upcoming months and make sure that both your vendors and your restaurant are complying properly with current rules.
Although trade regulations don’t directly affect your current operations, the production, manufacturing, and distribution chain does have a domino effect on your food prices. The transportation market is reacting favorably to the incoming administration, which is one indicator of the supply chain’s outlook. Although food prices today are relatively low, the distribution cost may decrease, allowing even more price relief in your cost of goods sold. This may also have the effect of making grocery stores more competitive with the restaurant market, however.
Beyond the regulations
Looking past the official rules and regulation changes, it’s also just a good idea to remember that this is a time of uncertainty, especially for hourly workers in restaurants. Chances are, many of your employees may be concerned how changes in the political climate might affect their everyday life for the next four years. Change is not easy for most people and the uncertainty of change is even tougher.
Now more than ever is a great time for you to “lean forward” and be engaged with your employees. As their employer, it’s a good idea to consider their concerns, keep their feelings in mind when it comes to decisions, and inform them of any changes you make for the business. Keeping your door open, respecting their needs, and providing clear, open communication about business decisions that may affect them will be more crucial than ever in the year to come.
Want to explore more of what’s to come in the restaurant industry in 2017?