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VIRGINIA'S HOSPITALITY & TRAVEL BLOG
Preparing for the Federal Trade Commission Noncompete Ban to Take Effect As most of the public (and your employees) are aware, the Federal Trade Commission (FTC) issued an extremely broad Final Rule banning most non-competes. The Final Rule takes effect on September 4, 2024. The Final Rule includes language requiring that employers provide an individualized notice to each worker subject to a non-compete prohibited under the Final Rule. According to the Final Rule, these notices must state that the employer will not enforce the prohibited non-compete and that it is illegal. Employers need to start assessing whether this notice requirement applies to their contracts, as it is not clear that any court will intervene to stay or enjoin the Final Rule before its effective date. The Final Rule faced immediate legal challenges. Several defendants have asserted the Final Rule is not constitutional and that it violates the FTC’s rule-making authority. Many legal scholars predicted a nationwide injunction on the Final Rule while these challenges played out. To date, however, no court has initiated a nation-wide injunction. Therefore, as of this date, the Final Rule remains set to take effect on September 4, 2024. Employers need to be ready. What Will the Final Rule Do?The Final Rule bans entering into or enforcing non-competes between employers and their workers, including former employees and independent contractors. Exempt from the Final Rule are certain senior executives who entered into a non-compete prior to the effective date, industries not governed by the FTC (for example, banks, insurance companies, not-for-profits), and certain non-competes entered into as part of a sale of a business. Although the Final Rule does not prohibit nondisclosure agreements, or non-solicitation agreements, the Final Rule does state that such agreements that are overly broad may be so restrictive as to become prohibited non-competes. As part of this assessment, employers should also review these agreements to make sure they are not so broad that they are the functional equivalent of the type of activity the ban seeks to eliminate (i.e., prohibiting or penalizing a worker from seeking or accepting other work or starting a business.) Employers should also review state law provisions. For example, in Virginia, non-competes are prohibited for most low-wage workers (earning less than the equivalent of $73,320 per year). Some twelve other states either prohibit or partially prohibit non-competes, and legislation in this area changes frequently. What Does This Mean for Businesses Subject to the Final Rule?If no nation-wide injunction delays the Final Rule, employers should be prepared to issue a notice to affected employees no later than September 3, 2024. What to Do:
What if You Don't Send the Notice or Send it Late?Employees do not like signing non-competes, and employers need to realize that their employees are looking forward to September 4. If your business fails to provide the notice, the worker may report the company to the FTC. There is no private right of action against an employer under the new Final Rule. This means the FTC may engage in an investigation and pursue enforcement action, possibly including civil penalties. Further, if the company tries to enforce a prohibited non-compete, the Final Rule, while in effect, operates as a bar to enforcement. Providing a worker the notice and then “taking it back” (in the event the Final Rule is stayed) is a potential PR nightmare for employers. You should carefully consider your messaging on this topic and be prepared to explain why non-competes are important to your business. Please be advised that this information does not constitute legal advice. Please reach out to Karen Elliott or Brendan Horgan for further inquiries. Are you interested in a program that would provide an as-yet-untapped revenue stream for your restaurant, and make you even more integral to the fabric of your local community?
Eligible SNAP recipients who meet VRMP criteria will be allowed to use their EBT cards to purchase prepared meals at participating restaurants in much the same way that they would at grocery stores. This will be a tremendous step in fighting food insecurity in populations which have particular difficulty in preparing meals for themselves, and it also offers your restaurants a variety of benefits:
There are no fees associated with participating in the program, however it does require a specific POS system that can accept Electronic Benefit Transfer (EBT) cards. You can learn more about that here. There is a short, convenient application process that you can learn more about here. Once you are approved, and your system is ready to accept VRMP customers, DSS will provide VRMP signage that you can display at your restaurant to let folks know! DSS will also feature your restaurant on their locations index for eligible customers. DSS has also compiled a helpful FAQ page on their website, which has more information.
The program is just ramping up, and so this could be an opportunity to be ahead of the curve on this exciting opportunity. I hope you’ll consider applying to this program, and of course in the meantime if you have any questions whatsoever, please reach out to [email protected]. You’re of course welcome also to contact me, and I will be happy to put you into touch with our direct contact on this at DSS. Thanks for all you’re doing! Arlington Career Center Culinary Arts Program (ACC Culinary) spotlight on senior, Aidan Lahlou.
Thanks to the work of a Special Session on Monday, May 13, the Virginia General Assembly has now passed a final Budget, which the Governor has signed. The results are a mixed bag, but the avoidance of a government shutdown is a relief to us all.
Contrary to concerns, the Budget does not include a digital sales tax, which is great news for our industries. The tax would have been levied on all digital goods and services, to include software licenses and memberships like Spotify or Netflix. The idea had been part of the comprehensive tax shake-up proposed by the Governor, to be included with income tax cuts and a sales tax increase. The digital sales tax alone, extended beyond end-users into business-to-business transactions was included on the original Conference Report Budget that he initially amended. Happily, optimistic revenue projections continue to roll in for the Commonwealth, and it became unnecessary to impose additional taxes at this time. Despite opposition from VRLTA, and consistent advocacy from our members, the Virginia General Assembly has chosen to move up the Commonwealth’s polystyrene container ban. This means that starting July 1, 2025, any restaurant operator with more than 20 locations will be banned from using polystyrene containers, to be followed on July 1, 2026, by any restaurant operator whatsoever. This is obviously not an ideal outcome for our members, and will add one more significant cost increase to all of the others that restaurateurs are weathering right now. There will be another opportunity to advocate for a further delay in the 2025 Regular Session of the Virginia General Assembly. The make-up of the legislature will be identical to today’s, however, and absent any big development to change those votes, an extension is not likely. The version of the Budget that has passed does still include G3 last-dollar tuition grant eligibility for Virginia Community College students in either culinary or hospitality management programs, which will be a great boon to the metaphorical pipeline that connects smart young talent to our industries. We know that a sustainable pool of young professionals is vital to the development and growth of the restaurant, hotel lodging, attraction, campground, and tourism industries in the Commonwealth. Please do not hesitate to reach out to VRLTA Director of Government Affairs Tommy Herbert at [email protected] or (804) 761-3235 if you have questions about this development. February 14th, 2024 was not only Valentine’s Day and Ash Wednesday, it was Crossover Day in the Virginia General Assembly. Crossover Day is the formal halfway-point in each year’s Legislative Session where all of the bills that have passed the House must “crossover,” to the Senate for consideration and vice versa. All bills that have not been fully passed by their original chamber by that day are officially dead beyond revival.
I’d like to give you a short, broad survey of where the legislation stands now that will affect your business most: 1. Tipped Wage – HB335 was brought by Delegate Deborah Gardner to phase out Virginia’s tipped wage credit over the course of a few years, much in the same way that our standard minimum wage has been rising periodically as a result of Democratic legislation from the 2020 and 2021 sessions. VRLTA’s opposition to the bill was strong enough that the patron substituted her bill for a working group that will be convened through the Department of Labor and Industry over the course of 2024 to study the prospect. That group will collaborate on a report to be given to the House and Senate chairs of the respective Commerce committees by December 1, 2024. 2. Short-term Rental Regulation – HB695 was brought by Delegate Lee Ware on behalf of VRLTA as well as the Virginia Municipal League and the Virginia Commissioners’ of the Revenue Association to establish a registry for short-term rentals (STRs) that would help localities corroborate tax remittances and ensure local ordinance compliance. That bill had reported out of the House Finance Subcommittee and the full Finance Committee completely uncontested, and was scheduled for a hearing at the final meeting of the House Appropriations Committee. It was, however, removed from the docket at the last moment for unclear “policy concerns.” VRLTA is still working to ascertain what those might be, but the bill will not move forward this year.
3. Fee Disclosures – SB388 was brought by Senator Stella Pekarsky to prohibit hidden fees in most consumer transactions. This bill would require disclosure upfront of final pricing in most merchant transactions. The patron accepted VRLTA amendments which dealt with the funds charged as part of Tourism Improvement Districts, which are termed as fees but in reality act as taxes. That took us out of opposition, however industries such as the airlines, rideshares, delivery services, and more continue to have deep concerns with the bill and how it affects their industries’ various practices around pricing. 4. Minimum Wage – HB1/SB1 were brought by Delegate Jeion Ward and Senator Louise Lucas as re-enactments of the original minimum wage hikes that Democratic majorities passed during their brief trifecta in 2020 and 2021, in which they controlled both houses of the legislature as well as the Governor’s mansion. Both bills have passed their respective chambers on clean party-line votes. The Governor has signaled that he is not inclined to sign the bills, however this is one of several matters that will likely come down to budget negotiations between the legislature and the Governor before it is finally resolved one way or the other. 5. Capitals/Wizards Arena – HB1514 was brought by House Appropriations Chairman Luke Torian to establish a governing authority and set up a financing framework for the building of the proposed new home of the Washington Wizards and Washington Capitals in Potomac Yard, Alexandria. This will also probably come down to the final budget negotiations. The Senate version, carried by Majority Leader Scott Surovell (SB718) was left in committee, but the House version (HB1514) was passed. The Senate Chair of Finance, Louise Lucas, has made clear that she is not inclined to let the bill through under the current political conditions. It’s possible that some give and take with the Governor could change that, but more remains to be seen. 6. Dealer Discount – VRLTA worked with Senator Glen Sturtevant to re-introduce language that would fully restore Virginia’s dealer discount on interchange fees associated with tax remittances to the state. The budgets are not final yet. These are just a few of the most salient measures for the tourism, lodging, and restaurant industries that are making their way through the legislature. You can find a more comprehensive bill listing at our online VRLTA Bill Tracker, which is updated weekly with the newest actions on bills and the budget. As ever, if you have questions about this or other issues related to the government and our industries, please don’t hesitate to reach out to me, Tommy Herbert, VRLTA’s Director of Government Affairs, at [email protected] or (804) 761-3235. Thank you. Best, Tommy The travel and tourism industry is an integral part of Virginia’s economy – generating tens of billions in both direct visitor spending and significant jobs. In 2022 alone, the Virginia tourism industry brought in $30.3 billion in visitor spending, a record for the Commonwealth. Perhaps most importantly, we are poised to continue growing as the sector moves beyond recovery from the pandemic. One potential development will turbocharge that growth in the coming years– a new sports arena and entertainment district in Alexandria.
As our state’s marketing campaign notes, Virginia is for Lovers. And there’s a lot to love about bringing two professional sports teams, a new arena, and a broader entertainment district to Northern Virginia. Monumental Sports’ new campus will be a catalyst for a new concert venue and entertainment district that includes new hotels, shopping, dining, and mixed-use housing. This hotel and conference space is desperately needed to attract larger gatherings and business meetings to Northern Virginia. Our partners at Visit Alexandria called that aspect a “game-changing opportunity” for Alexandria and the region. Having a new world-class performance venue stands to benefit the region too, bringing in premier talent for shows and concerts. Virginia is specifically and uniquely positioned geographically within a day’s drive from tens of millions of Americans. Having another marketable destination will be a boon for drive-in visitors. Our existing restaurateurs and other small businesses will thereby benefit from the several million attendees at events over the course of a year. One of the most exciting features of this proposal is the upside in new tax revenue that will be generated for the Commonwealth. In recent years, Virginia visitors accounted for over $2 billion in state and local tax revenues. Adding new spending and tax generation with this project will mean more money for transportation infrastructure and public amenities - making this area an even more attractive place to live, work and visit. Finally, it should go without saying that tourism equals jobs. In 2022 alone, state analysis showed tourism-supported jobs accounted for 5.5% of all jobs in the state. This new development will create tens of thousands of new jobs, many of them in our sector. For nearly 80 years, the Virginia Restaurant, Lodging & Travel Association has represented the Commonwealth’s restaurants, hotels, and travel attractions. Rarely has a project been met with such excitement for its potential impact on our industry and for the trajectory of travel in Northern Virginia. And because of what tourism means for our state’s economy, Richmond should love it too. Why are VRLTA dues increasing in 2024?Membership Dues Have Stayed Flat for Over Five (5) Years VRLTA last increased membership dues in 2018. We understand the significant impacts to the hospitality has faced over the past five years, including a global pandemic and recession, and we’ve made sure to be as accommodating as possible under these circumstances. The dues increase will bring our association more in-line with current rates. Association Membership Is Bigger Than Ever. More Members = More Resources Needed VRLTA membership has increased significantly thanks to the hard work of our team, and VRLTA plans to invest in additional resources to help accommodate and bring value to our growing membership. One of the biggest focus areas on these efforts is the work our Government Affairs team does to support legislation that provides cost-saving opportunities to our members, funding opportunities, VA ABC legislation and regulations, workforce issues across the Commonwealth, and more. VRLTA is Providing More Programs and Resources to Our Members Now with a fully-staffed team, VRLTA is able to offer more resources and programs to our members than ever before. The association now offers in-house photography and production, improved marketing opportunities, over 50 networking events annually, and an ever-growing list of partner benefit programs like the newly-created association healthcare program with UnitedHealthcare. How much will my dues increase?The VRLTA member dues will see an increase of approximately 10% across our various membership levels. If you're interested in seeing the full list of 2024 membership offerings, you can do so here. When does the dues increase go into effect?The dues increase will go into effect on January 1, 2024. Anyone who either joins VRLTA or renews their membership on or after that date will do so under the updated membership dues. My VRLTA membership comes through a TID, what does that mean for me?If your VRLTA membership comes from being part of a Tourism Improvement District (TID), there's nothing you need to worry about. As the costs of your membership comes through the TID fund, we'll continue to work directly with the TID Governance Committee directly on any dues changes for 2024 and beyond. What more can we expect in 2024?We're so glad you asked! VRLTA is excited to roll out a number of new opportunities and improved resources to our members in the upcoming year. Here's a look at what you can expect:
TC Energy Seeking Hospitality Suppliers TC Energy is actively seeking applications for local businesses to become contractors on Columbia Gas Transmission’s Virginia Reliability Project (VRP). TC Energy is seeking the expertise of a wide range of services, including transportation, food and catering, health and safety, security, administrative, and construction services, among many others. Businesses interested in working on the VRP should visit the Supplier Page on VirginiaReliability.com to learn more about the opportunities available and indicate their interest by completing the webform on the page. All interested vendors are asked to submit their information by the end of October. At TC Energy, supplier diversity is a proactive process that provides diverse suppliers equal access opportunities to conduct business with the company. TC Energy is committed to pursuing every opportunity to hire local small, women, and minority (SWaM), and indigenous-owned businesses, our neighbors in the region, to support the Virginia Reliability Project and benefit from the jobs the project is expected to generate. NRA Fly-Ins on Credit Card Competition Act I want to let you know and encourage you to attend one of two of the National Restaurant Association’s fly- in’s in concert with the Merchants Payments Coalition to meet with Senators Kaine and Warner on the Credit Card Competition Act. These fly-ins will be hosted November 15 and December 6. If you can spare the day to help raise our industry’s voice in DC, please let me know and I would be happy to connect you with the team over there to facilitate. We would be grateful for any time that you have to help us advocate on this really important issue for the industry. Thanks so much and as always let me know if you have any questions. Please Support VRLTA PAC Please consider joining our below list of VRLTA PAC heroes by supporting our political action committee. VRLTA PAC is one of our greatest tools to identify, form partnerships with, and uplift new legislative champions in the halls of the Virginia General Assembly to protect sound policy regarding restaurants, hotels, and tourism. You can donate at our website here, or by sending a check to VRLTA PAC at VRLTA headquarters: 5101 Monument Ave, Ste 206, Richmond, VA, 23230, c/o Tommy Herbert.
The Virginia Spirits Board is celebrating Virginia Spirits Month in September and we hope you, our licensee partners, will celebrate with us! We have a whole line up of events and special opportunities for consumers and licensees alike to join in the celebration! Click here to read the press release from Virginia ABC
How can you celebrate?
Who is the Virginia Spirits Board? The Virginia Spirits Board was established in 2020 by enactment of the Virginia General Assembly. It was created to provide resources for promotion of the Virginia spirits industry by a number of means approved by an administrative board appointed by the Governor. The purpose of the Board is to foster the development of the Virginia spirits industry by expanding spirits research, increasing education, and promoting the production of ingredients necessary for alcohol distillation and the production of spirits in the Commonwealth. The Board is comprised of eleven members, three of whom are coopers or maltsters and six of whom are owners or operators of a distillery in the Commonwealth. The remaining two members are the Commissioner of Agriculture and Consumer Services and the Chief Executive Officer of the Virginia Alcoholic Beverage Control Authority, and they serve ex officio without voting privileges. The Virginia Spirits Board Marketing Office, operated by the Hodges Partnership – a strategic communications firm located in Richmond, VA, has partnered with Drink Local, producer of the Virginia Spirits Expos, to help promote the Virginia Spirits industry and provide additional opportunities for consumers to engage with local distillers. For more information about the Virginia Spirits Board visit www.virginiaspirits.com and for more information about the Virginia Spirits Expos visit www.virginiaspiritsexpo.com The Virginia Spirits Board Marketing Office is proud to be a new Gold Level Partner with the Virginia Restaurant, Lodging and Tourism Association for 2023/24. Join Us! VRLTA PAC Hampton Roads Dinner September 13 Political season is upon us, with all 140 seats of the General Assembly up for re-election under completely new district lines drawn in a way that they never have before. We will experience historic turnover in the House of Delegates and the Senate of Virginia, there is absolutely no doubt. Virginia’s hoteliers and restaurateurs are losing many faithful legislative champions for our industries, and that is why it is incumbent upon us to identify and uplift new policymakers who are focused on helping the hospitality and tourism industries in the Commonwealth! Our best tool to accomplish that is VRLTA PAC. VRLTA member leader Chris Savvides is graciously hosting a seated dinner at his Virginia Beach restaurant Black Angus to support VRLTA PAC. Please take a moment to RSVP. The details are below. WHEN: September 13, 2023 from 6:30 – 9:30 PM WHERE: Black Angus Restaurant, 1340 N. Great Neck Road, Suite 1228, Virginia Beach, VA 23454 COST: $200 per seat/$350 per couple CLICK HERE TO RSVP
Prince William Meals Tax Event
VRLTA was excited to re-connect this week with our network in Prince William County as well as Supervisor Jeanine Lawson of Brentsville who is running for Prince William County Board Chair At-Large this year. Prince William restauranteurs have been busy on the ground raising awareness of the burdensome meals tax that was implemented this year by the Prince William Board of County Supervisors. Supervisor Lawson has committed, alongside others, to a repeal of the meals tax in the event of a change in the majority of the Board. This would be an exciting development and a big message sent to other localities that may be considering these meals taxes with their newfound freedom to institute them without a popular referendum. VRLTA wants to make it clear in advance to Virginia’s localities that may be looking at meals taxes that we will be there to oppose them wherever they might pop up. |
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