UPDATE June 27, 2018 - Employers are once again allowed to expand tip pools and share tips among a broader range of employees including back-of-the-house employees. Although the Supreme Court denied our certiorari petition in the National Restaurant Association et al v. U.S. Department of Labor et al case, the decision leaves in place a lower court ruling affirming the tip rule’s legality.
> Download ORLA's Tip Pooling info sheet
A federal spending bill passed March 23rd abolished a 2011 federal regulation that prohibited tip pooling in all circumstances with non-customarily tipped employees. Employers are once again allowed to expand tip pools and share the tips among a broader range of employees in states where employers don’t take a tip credit. This change now allows tip sharing among both customarily and non-customarily tipped employees, including dishwashers and cooks.
However, there is one area still of concern to our industry, the words “supervisor” and “manager” were not defined in this spending bill. A number of industry 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.
The Department of Labor (DOL) is moving forward with the process to roll-back the Obama-era rule with its recent release of a Field Assistance Bulletin (FAB), which provides our industry with much needed clarity. The FAB instructs employers to use the “duties test” to determine who qualifies as a supervisor or manager, and establish tip pool eligibility. Essentially, if an employee earns most of their pay through tips, but also has a limited supervisory role, they are still allowed to participate in a tip pool.
Given the ambiguity from DOL, tip pooling policies should be carefully reviewed with counsel before implementation to insure compliance with all applicable requirements.
For additional questions, contact Greg Astley, Director of Government Affairs, at 503.682.4422.
Oregon restaurants can now share tips with heart-of-the-house employees
A federal spending bill passed March 23 abolished a 2011 federal regulation that prohibited tip pooling in all circumstances with non-customarily tipped employees. Now, employers are once again allowed the opportunity to expand tip pools and share the tips among a broader range of employees in states where employers don’t take a tip credit.
This change now allows tip sharing among both customarily and non-customarily tipped employees, including dishwashers and cooks.
The new legislation also makes it clear that tips belong to the workers who receive them and that owners, managers and supervisors are prohibited from sharing in tip pools.
“We believe team environments within restaurants lead to customer satisfaction and business success,” said Jason Brandt, president & CEO of the Oregon Restaurant & Lodging Association (ORLA). “Last week’s congressional action affirms what our industry knows to be true – the dining experience is made possible by wait staff, cooks, bussers, dishwashers and other hard-working employees who now have the opportunity to share in the success of great customer service through the sharing of tips.”
The association looks forward to receiving further guidance and clarification from the U.S. Department of Labor.
To learn more, read Key Issue: Tip Pooling Updates.
About the Oregon Restaurant & Lodging Association
The Oregon Restaurant & Lodging Association serves to protect and promote Oregon’s hospitality industry, representing approximately 2,500 members, and advocating for over 9,900 foodservice locations and 2,200 lodging establishments across the state. The foodservice and lodging industry is responsible for 173,700 jobs bringing in over $10.8 billion in annual sales and generates over 54% of the annual tourism dollars spent in Oregon.
79th Legislative Assembly Garnered Real Outcomes
The “short” Oregon Legislative session officially ended March 3, 2018. The Government Affairs team at ORLA worked diligently to pass several pieces of good legislation and prevent more damaging laws from passing. Working collaboratively with other groups and organizations, some of whom we have not partnered with before, ORLA finished up a very successful short session on behalf of our industry partners.
Here is an update on a few of the bills ORLA was working on and tracking:
HB 4120A – 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 short-term 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 short-term 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 4120A, 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 4120A 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 is now headed to the Governor’s desk for signing.
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 lodging and restaurant operators about the playing and/or performing of copyrighted music.
The bill prohibits certain activities by, and specifies additional duties for, performing rights societies 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.
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 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
(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.
Further, a performing rights society or any agent or employee of a performing rights society may not:
(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:
(a) Providing identification to the proprietor or the proprietor’s employees; and
(b) Specifying the purpose of the entry;
(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 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;
(5) Engage in any coercive conduct, act or practice that is substantially disruptive to a proprietor’s
(6) Use or attempt to use any unfair or deceptive act or practice in negotiating with a proprietor
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), passing 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 then passed the Senate 29-0 with one excused. The bill is now awaiting a signature by the Governor.
HB 4054 A – 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 2 for notification purposes.
This bill passed 58-0 in the House with two excused and 27-0 in the Senate with three excused. It is now headed to the Governor’s desk for signing.
A Powerful Voice on Key Industry Issues
ORLA’s government affairs team is dedicated to promoting and protecting the foodservice and lodging industries of Oregon. By advocating for public policies that sustain our industry, and by working on behalf of local businesses, we are the voice of hospitality at the local, state and national levels.
Fighting Against Additional Labor Regulations
Small businesses in Oregon are still adjusting to increasing minimum wage rates, paid sick leave, and Oregon’s new scheduling law. As a result, ORLA will fight any attempts to implement Paid Family Leave during the 2018 session. Laws relating to Paid Family Leave are currently on the books in both Washington and California and Oregon’s legislative leadership have signaled an interest in implementing paid family leave legislation.
Fair Payment of Lodging Taxes by Lodging Intermediaries
ORLA, in partnership with the League of Oregon Cities, will be pursuing a legislative fix to make sure online travel platforms like Airbnb pay all applicable lodging taxes when they are collecting payment for the lodging stays. The legislative fix would treat online travel platforms the same way as other lodging companies collecting revenue for lodging stays including other online travel companies like Expedia and Priceline.
Advocating for Oregon’s Tourism Investment Plans
ORLA continues to fight for the appropriate use of lodging tax dollars at the local, county, and statewide levels as required by law. Since July 1, 2003, 70% of any new or increased portion of lodging taxes must fund tourism promotion or tourism related facilities. The remaining 30% can be spent on general fund expenses as designated by the taxing jurisdiction. ORLA believes in the full preservation of the 2003 law and will protect its integrity as one of our most crucial tools in growing and enhancing Oregon’s tourism export economy.
Fighting for Tip Pooling
Tip pooling has become a legal spider web, given the complicated state-by-state variations. In a move to further clarify the law, restaurant industry trade associations filed a lawsuit against the U.S. Department of Labor (DOL) asserting the DOL has overstepped its bounds in revising regulations on tip pooling. Although the DOL has announced they propose to rescind the regulations that bar tip sharing, we continue to work with the National Restaurant Association and other partners to take our case to the U.S. Supreme Court.
Ensuring Fairness for Short-Term Rentals
Illegal short-term rentals endanger customers’ lives, ignore existing laws and it’s unknown whether they are reporting and remitting the proper lodging taxes. The State of Oregon should pass legislation that requires short-term home rental properties to register with their local taxing authority before they are marketed through online exchange sites. Additionally, for jurisdictions that have a business-licensing program in place, operators should secure the proper licenses and report and remit their room tax collections.
In partnership with Oregon Winegrowers, ORLA will be pursuing stronger protections for restaurant operations against predatory music licensing investigators. In order to make sure restaurants are paying appropriate fees for licensed music playing in their establishment, music licensing companies enlist the help of investigators who have been reported to harass and threaten restaurant operators. ORLA is interested in tightening up rules and regulations for how operators can be approached about their music licensing arrangements to assist in the amicable resolution of laws governing the commercial use of copyrighted music.
Advocating for Comprehensive Immigration Reform
Comprehensive immigration reform must include all aspects of immigration issues—border security, worker supply and employee verification—which means that Congress is the only political body which can actually solve the immigration problem. State and local governments only make a solution more complex by trying to pass their own laws. ORLA is opposed to random, individual pieces of immigration reform and supports Congress working together on a national level to enact comprehensive reform.
Defending Lottery Retailers and Commission Rates
ORLA is the only major trade association in the state that has defended lottery retailers since the introduction of video lottery in Oregon. ORLA defends commission rates and protects against extreme regulatory attacks, such as increased casino expansions off tribal reservations. ORLA is supportive of gaming as entertainment, adjunct to the hospitality industry.
Protecting Small Businesses from Local Jurisdictional Control
One of the biggest threats to independent businesses in Oregon is the desire by local governments to control private employer-employee relationships. By creating laws that mandate employee benefits within the boundaries of a city or county, businesses face a patchwork of regulations that differ from one location to another, and workplace fairness is compromised. ORLA believes that enacting a preemption that labor practices are set at the state level gives businesses stability and offers a better environment for economic growth.
Strengthening Oregon’s Roads and Bridges
ORLA believes in the importance of a comprehensive transportation plan that funds needed infrastructure projects throughout Oregon. The flow of people, goods, and services is crucial to the success of Oregon’s hospitality industry and the experience of Oregon’s visitors.
Stay up-to-date at OregonRLA.org/GA.
Update: Thanks to lodging operators and tourism partners who mobilized with ORLA to share their concerns, the Umatilla County Commissioners decided against pursuing a lodging tax increase. Your efforts made a difference!
Umatilla County is considering a new Transient Lodging Tax of 2% on all overnight lodging facilities. ORLA submitted a letter to the Board of Commissioners asking for a delay in considering the new tax until appropriate communications can take place with their partners operating these lodging facilities. We do not feel an adequate amount of time to fully vet the need for a new tax was given.
ORLA encourages lodging operators to provide comment on the County’s plan and attend one of the following meetings where this plan will be discussed:
Thursday, Dec. 7, 2018 @7:30 a.m.
Nookies, 125 N. First, Hermiston
Friday, Dec. 8, 2018 @ 10:30 a.m.
Umatilla County Courthouse, Room 114
216 SE 4th St., Pendleton
Industry members are encouraged to attend a meeting and/ or sharing your comments / concerns with County Commissioners on this proposal.
We’re Not Convinced Lodging Operators Want A County TLT
To date, there is no evidence that lodging operators are asking Umatilla County to assist them in growing their revenue and their bottom line by implementing this new tax. We question the need for the tax to be considered in the first place.
For questions, contact Greg Astley, Director of Government Affairs.
Over the course of the past few years, our professional staff at the Oregon Restaurant & Lodging Association has traveled around the state holding regional meetings with Oregon's small businesses operating within the hospitality industry. As a result of those experiences we know firsthand the degree to which our small businesses feel challenged by the United States Department of Labor's 2011 rule.
As costs rise within restaurant operations, Oregon's restaurants must in turn raise prices. The result of those realities is a growing disparity between Oregon's front-of-the-house workers and back-of-the-house workers. Many operators are paying back-of-the-house workers at rates of $15-17 an hour given the marketplace demand for those positions. The front-of-the-house is typically making Oregon's minimum wage plus tip income which can result in an hourly wage of $30-$50 an hour and sometimes more. We routinely receive reports that front-of-the-house workers can make as much as three times the wage as those working in the back-of-the-house.
In Oregon, the minimum wage will continue to rise every year on July 1 through the year 2022. What we're hearing from our industry is that something must be done to stop the regulatory forces that are driving wages and people further away from each other within the walls of our restaurants. If something is not done our wage gap between workers who are all working together to service the customer will continue to grow and result in cultural, workforce, and small business challenges that escalate and make Oregon a more difficult place to operate a small business.
We know the average small business restaurant in our great country makes 2-5% profit meaning for every $1 million in sales, the restaurant owner makes $20,000 - $50,000 in profit. Our industry operates in one of the slimmest profitability environments in the country. At the same time, restaurants in our country provide one of the best places to build skills and values in a professional setting. Many restaurant operators are proud to provide Americans with their first job or their second chance. They pave the way for career building opportunities and provide employees with the opportunity to build a strong work ethic, a keen attention to detail, and the ability to hone their interpersonal skills.
Rescinding the 2011 rule would be a decision to sustain the viability of Oregon's small business full service restaurants. We know already that if this were to happen, many operators would implement a modest tip pooling arrangement as the minimum wage continues to go up for Oregon's front of the house workers who aren't making minimum wage. As the minimum wage goes up for servers (even though they aren't making anywhere close to minimum wage) operators would have the ability to modestly increase the tip pool with back of the house workers to counteract the server wage increase. Those actions can create higher wages for Oregon's very crucial back of the house workers, keep Oregon's servers at significant wages, and allow the restaurant operator to continue pursuing their goal of 2-5% profit on overall sales.
There has been significant impacts on Oregon's restaurants as a result of the 2011 rule and we hope to have the opportunity to assist our small business operators in their efforts to build a culture that showcases the value of all their workers through the payment of more balanced wages.
For questions, contact Jason Brandt, President & CEO, or Greg Astley, Director of Government Affairs, at 503.682.4422.
The City of Portland’s challenge with the homeless crisis is not new, but it’s a growing issue demanding more attention from the City, especially in light of recent outcries from downtown businesses. The issue was a hot topic at ORLA’s Portland Lodging Alliance meeting this week, where several area lodging operators discussed recent talks with city leaders and next steps businesses can take. Hoteliers have seen an increase in antisocial, threatening and criminal behavior among homeless individuals outside (and in some cases inside) their hotels and are looking for real solutions from city leaders.
Earlier in November, ORLA President and CEO, Jason Brandt, and Government Affairs Director, Greg Astley, along with a few restaurant owners and hoteliers, met with Mayor Ted Wheeler and Commissioner Nick Fish to discuss the industry’s concerns and how the city plans to address homelessness. While the Mayor conveyed, they are taking steps including increasing community policing, he’s asking for help from the business community. Greater enforcement and new ordinances regulating homeless behavior on city streets need to be considered, and industry members are encouraged to keep pressing city leaders to find solutions.
At an invitation-only meeting on November 21, city leaders gave several business owners the opportunity to voice their concerns about the growing homeless problems in downtown Portland. Mayor Ted Wheeler, Portland Police Chief Danielle Outlaw and Multnomah County Sheriff Mike Reese participated in the town hall. In addition to more officers on the streets, some parts of downtown labeled "high pedestrian zones" may soon ban overnight camping, including on sidewalks and doorways.
The homeless issue is not isolated to downtown Portland, it’s everywhere, and lodging properties near the Portland Airport are also speaking up and taking action. ORLA is working with the PDX Airport Lodging Group in conjunction with Travel Portland’s Community Action Committee to address some of the issues such as car break-ins, vandalism, aggressive panhandling, and drug use. Lodging operators were provided forms to use in reporting incidents that include the potential loss of revenue and/or cost of the incident to their property. With the information gathered, ORLA will continue to push the City of Portland to prioritize and take action in those areas where businesses are being affected by these incidents.
If you’d like to get involved or have questions regarding the issue, contact ORLA’s Director of Government Affairs, Greg Astley at 971.224.1502 or email Astley@OregonRLA.org.
Support Portland Police Bureau's Budget Request
In response to an article from Willamette Week illustrating an ongoing attempt to change business at the Portland International Airport, ORLA expresses its commitment to Port of Portland’s current policy and its approach to elevating the Oregon hospitality experience in ways that drive our statewide economy.
Protecting Tourism Promotion and Economic Development
The government affairs team from ORLA was in Salem everyday during the 2017 Legislative Session, actively engaged in bills that could have and will affect our industry. Read about our legislative wins and savings for the hospitality industry.
Eroding 70% for Tourism Promotion
Establishing Ocean Beach Fund
Film & Video Tax Credit
Excise Tax on Coffee
Unused Gift Cards
Smoking Porch Enclosures
View a summary of bills ORLA tracked in the 2017 session and learn what they mean for your business.
After a district court overturned the Obama-era overtime regulation in August and the Department of Labor (DOL) decided not to contest the ruling, the Fifth Circuit Court of Appeals made the final ruling last week by closing the pending case that first put a temporary hold on the rule last November. As the National Restaurant Association’s Restaurant Law Center was part of the management team that oversaw the legal strategy, we're pleased the controversial rule is behind us, as it could have done significant damage to both employers and employees. The NRA has put together comments for the DOL in response to their request for information (RFI). ORLA will keep you informed when updates are available.
Help protect the future of your business with the Oregon Political Tax Credit
Would you rather give your hard-earned money to the state government or the only statewide organization representing the lodging industry?
Oregon has a unique political tax credit allowing individuals a no-cost way to support the political cause of your choice and direct a portion of your tax dollars in a way YOU choose.
Most people can give up to $100 for joint filers or $50 per individual to an Oregon political action committee and that amount is credited back to you*.
This is a credit, not a deduction like your home mortgage interest deduction or contributions to a charity. This is a dollar-for-dollar credit. In other words, if your total state refund for 2016 was $100 and you made a political contribution of $100 to a qualified political committee, your refund would then be $200.
Contributions must be dated no later than December 31st, 2017 to receive the credit on your 2017 tax return and you can only give up to the maximum amount (so choose wisely…). Finally, the Oregon Political Tax Credit is not a refundable credit. So, if your taxes are already zero, then you won't get your $50 back!
Less than 10 percent of those eligible take this credit to help support something they believe in.
So the question remains, would you rather contribute $50 or $100 to ORLAPAC and help support our efforts to elect business-friendly candidates who understand what it takes to run a lodging property in Oregon or would you rather give that money to the state government?
ORLAPAC is the only PAC fighting exclusively for hospitality interests at the Capitol, but we need your support to succeed. Thank you for considering the opportunity to support your industry!
To make a donation to ORLA’s PAC, send us a check or call 800.462.0619.
*Due to a recent change in Oregon law, individuals with adjusted gross income over $100,000 or joint filers with combined income exceeding $200,000 no longer qualify for the Oregon Political Tax Credit. Seek help or advice from a licensed professional for more information.
Summer was humming along with strong RevPar and occupancy performance for Oregon’s lodging industry – then came a late spree of Oregon wildfires.
It should come as no surprise that active forest management (especially in Oregon’s federally owned forests) will have to become a higher priority as part of ORLA’s advocacy efforts. Our wildfire season will end up costing hundreds of millions of dollars for direct fire suppression alone. This doesn’t include the alarming impacts these natural disasters have on the environment, paychecks, and jobs within the tourism industry.
The facts at the time of this writing are as follows:
Thankfully, many of Oregon’s elected leaders realize more must be done. Many of the facts shared in the bullet points above were included as part of a recent editorial in the Statesman Journal by State Representative Sherrie Sprenger.
In her comments, Representative Sprenger made a valiant case for stronger levels of active forest management in federal owned forests in particular. In a recent conversation with an ORLA member in Brookings, he mentioned the cost estimates to contain the Chetco Bar Fire alone will most likely exceed $100 million.
It begs the question – what can we do collectively as Oregonians to make sure appropriate funding is in place for active forest management? What can be done to ensure Oregon’s federally owned forests are not tinderboxes just waiting for the next lightning strike?
Clearly more needs to be done to bring collective voices together that can speak to the importance of more active forest management in an effort to protect Oregon’s natural resources. In the coming months, ORLA will be working with statewide elected leaders and other industry groups to formulate solutions that we hope result in fewer road closures and negative impacts to Oregon’s forests and communities.
In the meantime, we hope you consider assisting those who have been directly impacted by the tumultuous season. Visit Travel Oregon’s wildfire page at http://bit.ly/OTCwf for the latest information and resource links where those less impacted can support those in the industry who have been hit hard by Oregon's wildfires. To support the families that have had to evacuate, contact the Cascades Chapter of the Red Cross at redcross.org/local/oregon.
ORLA Advocacy: Seeking Smarter Approaches
The debate over minimum wage has been front and center in the media this past year, both nationally and in Oregon. In March of 2016, Governor Kate Brown signed into law a new 7-year minimum wage escalation plan for Oregon with the first of seven minimum wage increases effective July 1, 2016. The plan includes 3 regions with different escalation methodologies over the course of those seven years. For more information, see Oregon's Minimum Wage Escalation Plan.
Oregon is above the national average in unemployment rates, and for minor-aged workers, it’s even higher. While the rhetoric swirls on all sides of the minimum wage discussion, raising the minimum wage actually gives little buying power. Rather, it creates a reduction in available hours among lower skilled workers, and the goods and services they use increase in cost.
Research shows that raising the minimum wage hurts the least-skilled and least-experienced jobseekers the most. Read more about how raising the minimum wage hurts the least-skilled and least-experienced jobseekers the most. Additionally, watch The Real Faces of the 'Fight for $15' on YouTube.
Boosting Employment Opportunities for Younger Workers
Oregon added tens of thousands of new jobs while recovering from the Great Recession of the 21st Century, but recent job growth completely overlooked younger workers. There were actually fewer workers from the age group 14 to 21 years in 2012 than in 2010, according to a study done by the Oregon Employment Division entitled “Endangered: Youth in the Labor Force.” Yet studies have consistently shown that when teenagers enter the job market earlier in life, their earning potential increases over their lifespan.
Additional increases in the minimum wage, over and above current indexing, will create employee management concerns and potential pricing increases in the very industries that have long been training grounds for employees newly entering the workforce.
Compromise and Economic Strength is the Answer
If backers of higher minimum wages want to help those living solely on minimum wage, they should address the issue through the legislative process and work towards meaningful compromise. There are provisions in the Federal Fair Labor Standards Act, and in more than 40 states currently, that would help businesses manage their hours through the consideration of tipped employees and minor-aged workers.
Most people listed as minimum wage workers in Oregon are either tipped employees making and reporting over $20 per hour in combined income, or are minors who live with their parents and are gaining much-needed work experience.
If the legislature worked in concert with Oregon’s business community to grow the economy, all citizens would benefit. The focus needs to be on income growth and job creation through a prosperous economy; that’s how government benefits too through increased revenues and lower unemployment.
ORLA’s Policy on Minimum Wage
The Oregon Restaurant & Lodging Association (ORLA) supports efforts to remove the annual indexing, or at the least add language that considers economic factors like unemployment rates. ORLA is opposed to any increases in the minimum wage that do not take into account the factors of entry level workers or tipped employees.
For more information, see Oregon's Minimum Wage Escalation Plan.
View a map of 2018 minimum wage rates across the country.
ORLA Advocacy: Promoting and Advocating for Tourism Investment Plans
ORLA helped protect lodging tax revenues by opposing legislative bills that would have allowed cities to use these revenues for purposes other than intended. Read more on the 2017 Legislative Session update.
HB 2267, from Oregon’s 2003 Legislative Session, was designed to raise revenue for the promotion of tourism in Oregon. First, the bill instituted a 1 percent statewide lodging tax on all lodging properties in Oregon. This money was dedicated to the promotion of tourism through Travel Oregon, acting as Oregon’s tourism department. Second, the bill required any local governments with a lodging tax in place to determine what percentage was currently being used for tourism promotion and maintain at least that level in the future. The percentage is not allowed to decrease. The bill also required any local government that institutes a local lodging tax in the future to use at least 70 percent of the new revenue for tourism promotion. No more than 30 percent of the new revenue can be used for general funds or other non-tourism functions.
The Oregon Restaurant & Lodging Association worked with Local governments to clarify collection laws around Online Travel Companies. This should bring in millions of dollars more annually for tourism promotion.
ORLA is also involved in efforts to attract events to Oregon that bring visitors and promote the state. Some examples in recent history were helping to pass legislation that added money to improve college athletic programs and allowing for NCAA March Madness games to be played in Oregon, and protecting tax credit programs that bring film and video production to Oregon.
ORLA must ensure that these state statutes remain in place. Any lodging taxes, state or local, need to bring travelers and businesses to Oregon. All retail businesses profit from increased travel; additionally, local government must be encouraged to keep promotional dollars directed to these efforts. Finally, there are always opportunities to attract more events like feature films, major sporting events, concert venues, and wine tours that benefit the industry as a whole. ORLA will work to enhance these efforts, which bring people to Oregon and encourage Oregonians to travel more in and around the state.
Oregon Restaurant & Lodging Association supports current laws that protect lodging tax dollars going to tourism promotion and tax credits that encourage film and video attraction to Oregon. ORLA believes in protecting the dedicated tourism funds to ensure they continue to be allocated to tourism promotion at the state and local levels. This effort will benefit all retail businesses and local economies throughout our state.
UPDATE September 20, 2017: ORLA and members of other business groups worked together to negotiate substantial, positive changes to SB 828, the restrictive scheduling bill, before it was finally passed and signed by the Governor. Here's what you need to know about Oregon's scheduling law.
ORLA Advocacy: Fighting for Tip Pooling
ORLA joins other industry associations in legal action against the Department of Labor on a recent rule prohibiting tip pooling for back-of-house workers. Read the latest update and options for restaurateurs to consider.
Tip Pooling has become a legal spider web, given the complicated state-by-state variations. Many jurisdictions have seen court battles with companies defending their tip pooling arrangements, and also have seen the courts sorting out the intricate details of what is and what is not considered a tip pool. In a recent move to further clarify the law, restaurant industry trade associations have filed a lawsuit against the U.S. Department of Labor (DOL) on behalf of restaurants and restaurant employees who share in tips and participate in tip pools. The lawsuit was brought by the Oregon Restaurant and Lodging Association, the Washington Restaurant Association, the Alaska CHARR and the National Restaurant Association, along with a Portland, Oregon restaurant and an employee of that restaurant.
The lawsuit, filed in the United States District Court in Portland, asks the court to declare recent DOL regulations prohibiting back-of-the-house (kitchen) workers from sharing in tips left by customers unlawful and not applicable to restaurants that pay employees who share the tips at least federal or the applicable (if higher) state minimum wage with no tip credit. The District court agreed with the restaurant side’s arguments, again. The case is now on appeal in the U.S. Ninth Circuit Court.
This lawsuit arose after ORLA’s victory in Cumbie v. Woody Woo, Inc. in 2010, allowing tip pooling in the Ninth Circuit, which includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington. The Department of Labor published a conflicting “Final Rule” in the Federal Register (76 Federal Register 18832). This conflicting rule amends and implements new tip pooling regulations that conflict in certain areas with the law in some states included in the Ninth Circuit.
DOL’s conflicting regulations state in pertinent part:
Tips are the property of the employee whether or not the employer has taken a tip credit under section 3(m) of the FLSA. The employer is prohibited from using an employee’s tips, whether or not it has taken a tip credit, for any reason other than that which is statutorily permitted in section 3(m): As a credit against its minimum wage obligations to the employee, or in furtherance of a valid tip pool.
The DOL defended its new regulation issued May 5, 2011 on the basis of three points: (1) that the Woody Woo case preceded the 2011 DOL regulation, and therefore was not under consideration or supposedly covered by the ruling; (2) the Woody Woo case was an unpublished decision and thus has no “precedential value;” and (3) that a court’s construction of the statute trumps an agency construction only if the prior court decision follows from the unambiguous terms of the statute and thus leaves no room for agency discretion.
ORLA is working closely with the National Restaurant Association (NRA) to seek declaratory judgment that will resolve the conflict between the Woody Woo decision and the DOL’s later published regulations. Such a judgment is a court decision in a civil case that declares the rights, duties, or obligations of one or more parties in a dispute. Such a judgment will resolve indeterminacy in the law or in its application to facts. A declaratory judgment is legally binding, but does not order any action by a party.
Oregon is not the only state fighting over tip pooling in the Ninth Circuit. In Nevada, the District Court in Las Vegas found the Wynn’s policy requiring dealers to split their tips with floor supervisors and pit bosses unlawful under Nevada. The Wynn originally enacted this policy five years ago to raise the salaries of its pit bosses and supervisors to the level of pay received by dealers. In order to pay their supervisors and pit bosses more, the Wynn (and its sister property the Encore) gave supervisors and pit bosses a $5,000 annual raise and a share of the dealers’ tips. The case will be appealed to the Nevada Supreme Court and any effects will be on hold until that case is decided.
ORLA believes that the Department of Labor has overstepped its bounds in revising regulations on tip pooling without regard to the previous 2010 court case Woody Woo. If the Ninth Circuit issues a declaratory judgment in our favor, upholding its previous Woody Woo decision, it could resolve the tip pooling issue for states in the Ninth Circuit for good.
Strengthening Oregon’s Roads and Bridges
ORLA believes in the importance of a comprehensive transportation plan that funds needed infrastructure projects throughout Oregon. The flow of people, goods, and services is crucial to the success of Oregon’s hospitality industry and the experience of Oregon’s visitors.
ORLA is closely watching the 2017 Oregon Legislature in discussions of potential transportation plan proposals.
'Ban the Box' Limits Employer Screening and Prohibits Employers to Inquire Into Applicant's Criminal History
As of January 1, 2016, it is illegal for employers to include on employee applications any question that requires an applicant to reveal anything about their criminal history. Employers operating in Portland cannot make any criminal history inquiries until after you have extended a conditional job offer. You then are required to consider the nature and seriousness of the crime, the time elapsed since the criminal activity, and the nature of employment being sought before deciding whether rescinding the job offer is a business necessity.
HB 3025 (passed in 2015) prohibits the use of job applications inquiring about an applicant's criminal conviction history. Through the legislative process, this bill underwent substantial revision in both the House and Senate committees. The final amendments read that an employer may not require job applicants to disclose criminal convictions on an initial job application. The only exceptions to this prohibition are employers in law enforcement or the criminal justice system, or those seeking non-employee volunteers.
Nothing in the bill prevents employers from asking about a job applicant's conviction history in interviews. HB 3025 initially allowed a private right of action against violators of the law, but a compromise was reached whereby complaints may be made only to the Bureau of Labor and Industries (BOLI). This is a compromise that was agreed upon by both business and labor representatives, but the legislative leaders even with the compromise would not add a local preemption. Portland does not want to compromise; they want to pass a more extreme measure and the legislature opted to give them that opportunity. ORLA was opposed to the bill without the preemption.
Launching Income Equality in Oregon's Small Businesses
ORLA believes in the importance of income equality inside the walls of Oregon’s small business restaurants and lodging establishments. We believe in the concept so much that we partnered with Democratic and Republican lawmakers this session to introduce the most progressive income equality proposal in the nation. Our proposal? If a front-of-the-house worker is making more than $5 above the minimum wage rate in their region through a combination of their base wage and tips during a given pay period, then the employer can adjust their base wage to $10 an hour, freeing up revenue for kitchen and back-of-the-house staff raises and bonuses.
As it stands now, because Oregon does not have a tip credit and our minimum wage continues to increase, servers see those increases and can end up making as much as four times what back-of-the-house workers make and employers have few options available to help level the playing field.