Fall 2017

Fall 2017 • PENNSYLVANIA RESTAURANT & LODGING matters •  21 Budget update | How we got here | And now for our state controlled monopoly What did the Senate pass to fill the budget deficit? | To add to the fun Tip pooling win—but wait—not so fast Online travel agency industry report | Menu labeling | NLRB Philadelphia Beverage Tax | Pittsburgh paid leave | Harrisburg—Airbnb Federal Items TIP POOLING WIN—BUT WAIT—NOT SO FAST The U.S. Department of Labor has announced that it will rescind an Obama- administration ruling that stated tip pooling could not occur between front and back of the house employees. To clarify, the ability to tip pool amongst all employees only applies if the business does NOT take a tip credit and all employees’ base pay is minimum wage or higher. The official proposal repealing the rule was to be released in August. ONLINE TRAVEL AGENCY INDUSTRY REPORT A Harvard Business School professor released a report that looks at the impact online travel agencies (OTA) have had on the hotel industry. It contains the following key findings: • Almost all OTAs are owned by Expedia and Priceline, all other OTAs control no more than 1 percent of the market. • With limited competition, each OTA can anticipate the others’ pricing, letting the OTAs increase their fees to hotels with greater confidence that the others will match. • When hotels have offered lower prices with loyalty programs on their own sites, OTAs have demoted their listings by altering where they appear in search results, changing the color scheme to deemphasize or even removing photos of the hotels. • The hotel industry remains strikingly decentralized, with no single firm controlling more than 20 percent of capacity. Smaller hotels, especially, lack the market power to forcefully oppose OTA fees. MENU LABELING The Food and Drug administration has announced their intention to provide clear menu- labeling guidance by the end of this year. In the meantime, federal preemption continues to stand and states and cities are not allowed to enforce previously passed menu labeling laws. NLRB The U.S. Senate confirmed Marvin Kaplan to the National Labor Relations Board (NLRB) by a vote of 50-48. A vote for William Emanuel, the other nominee, has not yet been scheduled. Once Emanuel is confirmed, the NLRB will have a Republican majority. Local Issues PHILADELPHIA BEVERAGE TAX The Philadelphia beverage tax continue to fall short of projections as studies are released that confirm exactly what the industry has been saying from the beginning—people will buy fewer beverages in the City, purchase more beverages and other items outside of the City, and the cons will outweigh the pros of this exorbitantly large tax. PITTSBURGH PAID LEAVE PRLA filed a petition urging the Supreme Court to not take up the appeal filed by the City of Pittsburgh as it pertains to mandated paid leave in the City. We argued that previous rulings on this type of issue by the Supreme Court have been upheld by the lower courts and therefore there is no reason to hear the case. There is no set timeline for when the Supreme Court will decide. As always, unless the Supreme Court rules otherwise, mandated paid leave in Pittsburgh remains illegal. HARRISBURG—AIRBNB The City of Harrisburg is beginning the process of figuring out how to tackle and regulate short-term rentals in the City. The Pennsylvania Association of Bed & Breakfast Inns and PRLA continue to work together to ensure a level playing field for all entities that provide overnight accommodations. •