Thursday, September 12, 2013

The Obama Administration -- They Just Can't Help But Hinder

The restaurant industry was already reeling from the low blows administered by the current Democrat administration, the lowest one of all being ObamaCare.

But now they are facing yet another attack on their economic productivity.

 Over at NRO, Congressman Kevin McCarthy lays out the problem.

...The first blow to the industry can be found within the president’s premier legislative achievement, Obamacare. In particular, Obamacare’s employee-insurance-mandate threshold has already forced restaurants to make the illogical choice of restructuring their work forces and not expanding their offerings and service in fear of this costly and arbitrary threshold. This requires any restaurant that employs more than 50 full-time equivalent employees to provide health insurance to any employee working over 30 hours a week; thus leading to the 29-hour work week as the new normal for restaurant employees.

Now the federal government has its sights on the restaurant world once again. But this time, it is coming from the agency with a penchant for picking on particular constituencies — the IRS. 

Beginning next year, the IRS has announced it will change the way it views tips received by restaurant servers. Specifically, for restaurants that have a minimum gratuity charge on large groups, the IRS will now count those tips as regular wages rather than traditional tips that we are all familiar with when we dine out. Ask any server and they will tell you that this will directly affect their day-to-day lifestyle. Servers make very little in regular wages and largely rely on tips to pay the bills and budget for weeks ahead. Taking portions of a shift’s pay and pushing it to their paycheck weeks away will only add to the uncertainty already inherent in the business. 

And it isn’t just the servers that will be frustrated by the new classification. Restaurant owners will be faced with more paperwork and reporting requirements, and less time to focus on how to keep an often volatile and competitive business with tight margins running smoothly. Will this little-publicized rule cause restaurants to no longer accept large parties? Probably not. But it will most definitely cause indigestion to servers and restaurateurs alike.

The IRS’s decision to target hardworking Americans navigating a very competitive industry already filled with regulations and burdensome compliance measures is just the latest example of a tone-deaf administration. Across the country people are struggling, and instead of promoting ideas that will ease their day-to-day burden, this administration is incrementally making life a little bit more difficult than it was before. 

Right now, we have the smallest percentage of Americans active in the work force since 1978. This trend is a recipe for continued economic malaise. And with this recent IRS regulation, I’m sure that hardworking folks in the restaurant industry are scratching their heads like I am and asking, why the beef with America’s waitresses and waiters?