KENILWORTH, NJ (GreekNewsOnline)
The leaders and advisors of six regional food service cooperatives held a virtual meeting with U.S. Senator Robert Menendez (D, N.J.) on June 17, 2020 to present their proposal for additional assistance to meet the challenges faced by their members as diners and restaurants begin to reopen in the wake of the coronavirus pandemic. Harry Mihas and James Logothetis of Pan Gregorian Enterprises, Inc. of New Jersey, Dimitrios Kafhitsas of Pan Gregorian of Metro New York and Long Island, Sakis Tyrnas of Pan Gregorian of Upper New York, Chris Scabardonis of Pan Gregorian of New England, Nick Apostolopoulos of Pan Gregorian of the Carolinas and John Zoulis of Pan Gregorian Enterprises of Maryland, Inc. were among the cooperative executives who thanked Senator Menedez for his efforts to date, but emphasized that much more must be done if this crucial segment of the economy is to survive.
PPP Loans an Important Start,
But Not Nearly Enough
Andreas Comodromos, CPA, speaking for the group, emphasized that the federal government’s PPP loan program was greatly appreciated, but that the continuing restrictions on operations in many states, the refusal of employees to return to work, mandatory social distancing requirements and the general public’s concerns about safety present serious obstacles to recovery. Although recent legislation extended the use of the PPP funds from 8 to 24 weeks, the reality is that the funds made available thus far are insufficient and fall considerably short of what is needed for a transition to recovery. A large numbers of family-owned eateries will face extinction unless additional significant steps are taken to support the industry.
Summary of the Proposal
Stephen M. Vajtay, Jr., Esq., counsel to Pan Gregorian of New Jersey, presented Senator Menendez with a summary of the group’s proposal (detailed copy attached) designed to provide the types of assistance that family-owned diners and restaurants need to survive.
The proposal includes:
A targeted federal program to provide grants to closely-held diners, restaurants and eateries in line with proposals made by the Independent Restaurant Coalition and the National Restaurant Association. The cooperative executives specifically endorsed the $120 billion Restaurant Act of 2020 proposed by Representative Earl Blumenauer (3rd District, Ore.);
A new tax credit to be made available to closely-held restaurants that would reimburse owners to the extent they must supplement the lost tip income of their serving staff in order to satisfy minimum wage requirements;
– Immunity from tort claims if eating establishments follows all federal and state guidelines once they are permitted to reopen; and
– Elimination of current financial disincentives to return to work and implementation of a return-to-work bonus.
Senator Menendez thanked the diner and restaurant representatives for their advocacy and said he was receptive to the group’s proposal while noting that many other industry groups were also competing for enhanced federal support, He noted that the federal government had already committed trillions of dollars to restarting the economy and that as a member of the Senate Finance Committee, he was keenly aware of the impact existing and future relief programs would have on the U.S. Economy, in the future. That said, the Senator acknowledged that family-owned restaurants face unique and critical challenges that need to be addressed. He and the industry group agreed to continue to communicate and collaborate on solutions to the post-pandemic hurdles confronting family-owned diners and restuarants.
PROPOSAL FOR SPECIAL ASSISTANCE
TO RESTAURANTS, DINERS
AND SMALL EATERIES
On May 14, 2020, the Pan Gregorian Cooperatives issued the following statement:
As a result of COVID 19’s devastating effect on the economy, most restaurants, diners and small eateries will be fighting for their survival. This fight is expected to continue for months after current restrictions are lifted and may persist even after a vaccine is found (if ever). The public’s widespread fear of contracting the virus and the rules of social distancing which will continue to apply to foodservice employees and patrons will cause a reduction of approximately 50% of any eat-in establishment’s seating capacity, resulting in an equivalent loss of revenue.
The Independent Restaurant Coalition (the “Coalition”) recently conducted a survey with the James Beard Foundation and found that after the first round of Paycheck Protection Program (“PPP”) loans was distributed, eighty percent (80%) of independent restaurant owners still weren’t sure they would be able to reopen. Andrew Zimmern, a founding member of the Coalition and TV host, said that “PPP’s eight-week Band-Aid isn’t enough to keep 500,000 small eateries open and over 11 million people employed.” In a letter sent to U.S. House and Senate leaders, the Coalition proposed a $120 billion stabilization fund to supplement the shortcomings of the PPP and to save closely-held restaurants, the employees of which are the most significant contributors to unemployment claims nationwide. Indeed, the National Restaurant Association (“NRA”), the nation’s largest foodservice trade group, recently estimated that the size of any such relief fund would need to be closer to $250 billion.
Beyond the funds needed to get the industry back on its feet, an issue that has not been discussed or given proper attention is the likelihood that once reopened, many restaurants will need to subsidize their servers’ compensation to meet the requirements of federal and state minimum wage laws. In normal times, a restaurant’s service staff can achieve the minimum wage through a combination of salary and tip income. A fearful public, combined with social distancing mandates, assures that once restaurants reopen, servers’ tip income will shrink by as much as fifty percent (50%). Consequently, even as restaurant patronage is drastically reduced, restaurant owners will need to supplement server compensation to achieve governmentally-mandated minimum wage requirements. Thus, even as their overall revenue plunges, restaurant owners will face an increase in compensation expense or risk violating minimum wage guidelines that apply to their service staff.