Stimulus Proposals for Restaurants

Originally Published : March 25, 2020

Did Homeboy take a two-iron to the temple?  Our President thinks it’s going to be business as usual by Easter?  It’s just insane and irresponsible to even float the idea. We have beautiful people dying by the dozens in our city and we lost such a great one today when Floyd passed and he wants us packed together with our families for spritzes at Easter brunch?  It’s downright criminal and it’s just not going to happen.  Gimme a break already.  We are still of the mind that June 1st would be the absolute, very earliest that things could start coming back on line. At least our Governor is a realist.

Moving on. There is some breaking news on the horizon in the form of the stimulus package and a new bill that was introduced in the State Senate. 

The Senate Bill

The good news:A bill was introduced in the Senate Judiciary Committee that would provide a 90-day rent abatement for commercial tenants and a 90-day mortgage forgiveness for landlords. 

This is exactly what we need!  It gives tenants the break they need to even have a hope of staying in business while taking the financial pressure off of the landlords as well. but….

The bad news:  

For this proposed bill to become law, it must first pass both houses and then be signed by the Governor.  We hear in Albany that is very unlikely this bill will go anywhere because right now, our elected leaders are focused on getting a quick and dirty budget passed and getting outta dreary old Albany by Friday.  So, the likelihood that an unvetted proposed bill, that may or may not be constitutional, gets through at the 11th hour is extremely unlikely. 

What can we do? 

Call your State Senator and make some noise!!!  Contact the press. But do it now while it’s still out there and before they all go home.  If you’re interested, here is downloadable version of the bill, here

The Stimulus Package

Tax Refund:

The stimulus is proposing a tax refund for restaurants. It would allow hotels, restaurants and retailers that have spent money fixing up their properties in the last two years to accelerate the way they write off those expenses, effectively giving them an immediate tax refund.  They could then use the refund to help cover bills during the crisis. The special tax benefit would be retroactive to 2018 and would last for at least three more years, before it is gradually phased out.  Talk to your accountant about this!

Paycheck Protection Program: 

This would provide 8 weeks of cash-flow assistance through 100 percent federally guaranteed loans to small employers who maintain their payroll during this emergency. 

If the employer maintains its payroll, then the portion of the loan used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven, which would help workers to remain employed and affected small businesses and our economy to recover quickly from this crisis. 

This proposal, as it stands now (remember it must go through the House and signed by the President) would potentially be retroactive to help bring workers back onto payrolls.

The size of the loans would equal 2.5X an employer’s average monthly payroll. The maximum loan amount would be $10 million. Covered payroll costs include salary, wages, and payment of cash tips (up to an annual rate of pay of $100,000); employee group health care benefits, including insurance premiums; retirement contributions; and covered leave.

Loans would be available immediately through more than 800 existing SBA-certified lenders, including banks, credit unions, and other financial institutions, and the SBA would be required to streamline the process to bring additional lenders into the program. The maximum loan amount for SBA Express loans would be increased from $350,000 to $1 million. Express loans provide borrowers with revolving lines of credit for working capital purposes.

Man, they need to make this one happen!  We will be watching closely and will keep you updated.

Delivery Playbook:
Your Guide to Mitigating Risks in the Time of Coronavirus

Coming tomorrow, we will deliver to you a comprehensive guide for continuing to operate in the midst of the COVID-19 crisis. Whether you are a business that has always offered delivery and takeout services – or you have recently adjusted your operational model, it’s our job to help you avoid the mistakes of businesses like Trader Joe’s (shutdown for not having enough backup staff) or Carbone (shutdown for failing to have sufficient social distancing protocols).    **** We have compiled a number of different resources that will serve as comprehensive guidance in the following areas of common concern:

  1. Workplace Health & Safety
  2. Insurance Coverage 
  3. Applicable Laws & Operational Best Practices
  4. Wage & Hour Considerations: Paychecks, Tips, Bikes
  5. Expecting the Unexpected

For each of these topics, we will provide information relating to the need-to-know laws and regulations, as well as our guidance – and best practices – for compliance. 

We’ve also prepared some basic templates and form documents that will be helpful in implementing and/or enforcing policies in your workplace

So, here are some FAQ’s to get you started:Workplace Health & SafetyAre both delivery and pick-up/takeout services permitted under New York’s PAUSE order?

Yes. However, please note that OSHA has determined that all businesses in the hospitality industry are now Level 2 – or “medium exposure risk” – employers, for which there are heighted health and safety standards.  A Level 2 occupation exposes employees to medium exposure risks like ours where this frequent and/or close contact with the general public.  

What should I do when we’re up and running again?

Be an “A+” Provider, meaning, market yourself and make it a part of your business model that you are going above and beyond the daily tasks of ensuring that your business is clean. For example, if your business typically opens at 9AM, advertise that you come in an hour or two earlier (and pay your staff for it) just to clean the counters, the floors, door handles, etc. People will want to pay a premium and go to a business if they know that the business is taking precautionary steps to go above and beyond. 

What if an employee appears sick?

If any employee presents themselves at work with a fever or difficulty in breathing, this indicates that they should seek medical evaluation. While these symptoms are not always associated with COVID-19 coronavirus is extremely low, it pays to err on the side of caution. Retrain your supervisors on the importance of not overreacting to situations in the workplace potentially related to COVID-19 in order to prevent panic among the workforce. 

Insurance Coverage

What should I do if I am offering delivery for the first time?

The first step is to call your insurance agent. As you begin to offer delivery services (or carry-out/take away), there are many insurance implications that must be considered. Your insurance agent is best suited to advise you on what, if any, additional insurance to carry. 

What should I do if delivery was already a part of my business?

You should still call your insurance agent. As delivery becomes used more frequently, these same insurance implications must be considered. Some additional things to consider will be expanded delivery radiuses, using additional third-party delivery services, having more delivery workers out in the city, the types of vehicles that are being used to deliver, etc. it is very important to speak with your insurance agent, as they will be able to best advise you, to help secure adequate coverage. 

Applicable Laws & Operational Best Practices

Do on-premises licensees need to obtain a waiver from the SLA in order to sell wine, spirits and mixed drinks for takeout and delivery sales?

No, you do not need to obtain a waiver from the SLA.  During the temporary shutdown period these new privileges are granted as part of your license. 

I operate a tavern with limited food, can I deliver/sell for takeout alcoholic beverages with orders of food consisting of items such as potato chips, pretzels, peanuts, etc.?

Yes, if this is the standard food requirement for your license, you may sell alcoholic beverages for takeout or delivery with these items. 

Wage & Hour Considerations: Paychecks, Tips, Bikes, Oh My!Is the Minimum Wage Being Reduced? What About the Tip Credit? 

No. Minimum wage remains at $15.00/hour.  The tip credit remains at $5.00/hour ($2.50/hour for delivery drivers and service employees) for ALL New York City Employers. For those employers that are currently availing themselves of the tip credit, please remember that your employees must be reaching that full $15.00 minimum wage threshold for all hours worked. If, at any point, tips don’t make up that difference, you must make up the shortfall. 

What Is the Best Way to Continue to Pay Floor Staff? Can I Co-Mingle Tip Pools? Subsidize BOH With FOH Tips?

You must continue all regular payroll practices. There are no changes to your current payroll practices.  You cannot alter or modify your tip pools beyond what is permitted under law.  However, we have come up with some creative processes to help solve this problem.   I will leave you with this from 

Governor Cuomo:

“It is that closeness, that concept of family, of community. 

That’s what makes New York New York, and that’s what made us vulnerable here. But it is also that closeness and that connection and that humanity and that sharing that is our greatest strength.”

Good night clients and friends and family and Chef Floyd.