Regulatory and Legal Affairs

📌 The first comprehensive Junk Fee Law in the United States became effective on July 1, 2024, in California, mandating upfront disclosure of total prices for goods or services. A webinar on July 18, 2024, by myLawCLE, covered updates on California and federal regulations on junk fees, including SB 478, SB 1524, and AB 537, as well as HR 6543 and S 2498. The program provided insights for sectors like hotels and restaurants and discussed penalties and legal defenses. For more information or access to an on-demand recording, contact [email protected]

💳 Integrated payment systems enhance hotel and restaurant experiences by providing seamless transactions, automatic data updates, and advanced security features. Hotels benefit from connectivity with property management systems (PMS) and point of sale (POS) systems for real-time data exchange. Guests enjoy multiple payment options, including Dynamic Currency Conversion (DCC) and tokenized card details for secure transactions. Hospitality businesses gain operational efficiency and detailed analytics for informed decisions.

🏨 Councilwoman Julie Menin introduced a bill to the New York City Council mandating hotels to obtain a yearly operating license for $200 from the Department of Consumer and Worker Production. The bill requires hotels to maintain room cleanliness, provide front desk and security coverage for large hotels, and employ core employees directly. Violators face penalties. Menin postponed a bill hearing scheduled for Tuesday, July 28, 2024. The legislation is supported by the Hotel Trades Union but opposed by hotel associations, who argue it will increase costs and regulatory burdens. Hotel room rates in NYC increased by 8.5% to $301.61 on average in 2023 after a ban on short-term rentals and the conversion of over 130 hotels into migrant shelters.

🍕 PizzaForno, a 24/7 automated pizzeria, expanded in the first half of 2024 by launching in six U.S. states: Utah, California, Delaware, New York, Florida, and Maryland. In 2024, they awarded 39 new units nationwide, nearly doubling the expansion from the first half of 2023. Mexico saw 20 locations secured, aiming for over 100 units soon, while Canada installed 18 new units. The U.S. expansion included 10 units each in Utah and Michigan, 10 in Key West, Florida, plus single and double unit awards in Texas, New York, and California. Mexico City welcomed the brand's inaugural unit, with plans for expansion in major cities. PizzaForno aims for 25,000 operating units by 2028, targeting campuses and unconventional locations, offering diverse pizza options accessible via digital screens and an app.

💳 U.S. merchants paid nearly $100 billion in swipe fees in 2022 with an average credit card processing fee of 2.24%, potentially rising to 3% per transaction. Swipe fees have doubled over the last decade. Merchants incurred $72 billion in fees last year. Selection of a payment processor is critical for hotels, motels, and B&Bs to avoid high costs and payment mismanagement. Integration with property management systems enables efficient operations, while transparency, affordability, mobile payment solutions, and strong customer service are key processor features to consider.

💸 The California Supreme Court unanimously upheld Proposition 22, which classifies drivers for companies like Uber and DoorDash as contractors, not employees. The decision, confirming a previous appeals court ruling, maintains the outcome of the $200 million lobbying effort by delivery apps for the bill passed in November 2020. This follows the AB5 bill, effective January 1, 2020, which aimed to consider such drivers as employees. Critics argue this contractor status denies drivers employee benefits, while proponents cite work flexibility. The recent ruling is seen as the final say after over four years of legal battles.

🏖 Gotham Restaurants LLC, known for operating Gotham Restaurant (previously Gotham Bar and Grill), filed for Chapter 11 bankruptcy in New York on Wednesday. The company owes nearly $484,000 to its largest creditor, the NY State Department of Taxation Finance Bankruptcy/Special Procedures Section. Other debts include nearly $97,000 to Dairyland and approximately $84,000 to Baldor Specialty Foods. The 40-year-old restaurant, a Manhattan dining landmark, closed in June due to a $45,000 cyberscam. Founded in 1984 by Alfred Portale, it became a trendsetter in the late '80s with "tall food". Portale left in 2019, and Ron Paprocki led as executive chef before the filing, which reported assets between $1 million and $10 million.

🍝 U.S. Sen. Dick Durbin and Rep. Rosa DeLauro introduced legislation to establish the Federal Food Administration, transferring food safety oversight from FDA. Hazel Analytics data from 2023 shows increased food safety violations post-pandemic. In 2022, the CDC reported a rise in consumer risk to foodborne illnesses. The new agency would include FDA's current food programs and operate under the Department of Health and Human Services. The initiative aims to prevent illness and death from contaminated food.

💸 Sen. Ted Cruz and others introduced the “No Tax on Tips Act,” exempting cash tips from federal income tax starting in 2025. President Trump, at the Republican National Convention in Milwaukee, endorsed the act, citing a Nevada server's complaint about tax on tips. This act could impact restaurant industry employees, as tips comprise 71% of their minimum wage. Critics argue that about half of tipped workers don't earn enough to pay federal income taxes, and the act doesn't exempt employer payroll taxes or state taxes on tips.

📌 The National Labor Relations Board (NLRB) withdrew its appeal of a federal judge's ruling against the broadened joint employer rule in May. The rule, expanded last fall and struck down by multiple government branches, could have held franchisees and franchisors equally liable for labor terms. The NLRB still supports the legality of the rule despite the blocked appeal, which leaves the possibility of a future challenge open.