NFIB Weekly News
Leading the News
Restaurant Law Center v. Department of Labor concerns FLSA tip credit provision
NEW ORLEANS, La. (May 17, 2022) – NFIB filed an amicus brief in the case Restaurant Law Center, et al. v. United States Department of Labor at the United States Court of Appeals for the Fifth Circuit. The case challenges DOL’s 2021 final rule on the Fair Labor Standards Act (FLSA) tip credit provision.
“The current rule from the Department of Labor creates many administrative burdens for small employers with tipped workers,” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center. “The department is exceeding its rulemaking authority on this issue and ultimately creating onerous and unworkable regulations for small business owners.”
NFIB’s amicus brief argues that the rule, which attempts to limit when employers can use the sub-minimum wage, or tip credit, conflicts with the FLSA and makes compliance nearly impossible for small business owners. The rule offers conflicting guidance on how employers should categorize tip-producing work and imposes significant time-keeping issues. NFIB asks the Fifth Circuit to reverse the district court’s decision and remand to the district court with instructions to enter a preliminary injunction enjoining the Department from enforcing the final rule pending final judgment in the case.
NFIB filed the amicus brief with the National Retail Federation, American Hotel and Lodging Association, and American Gaming Association.
NFIB Statement On Inflation and Its Impact On Small Businesses Business Climate
WASHINGTON, D.C. (May 11, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released the below statement in response to the Bureau of Labor Statistics report on Consumer Price Index and inflation’s impact on small businesses:
“Rising inflation has become a serious detriment for the small business community, and as new data shows, small business owners aren’t expecting business conditions to ease anytime soon,” said Kevin Kuhlman, NFIB Vice President of Federal Government Relations. “Small business optimism is now at its lowest level since April 2020, while most Main Street employers report that inflation is substantially impacting their business. The administration and Congress should not increase the pressure on small businesses with new taxes and mandates but instead promote policies that would grow and strengthen the small business economy.”
NFIB’s recent monthly survey shows nearly a third of small businesses reported inflation as their single most important business problem. Owners expecting better business conditions in the next six months dropped to the lowest level ever recorded.
NFIB: Small Business Confidence Fell In March Due To Inflation Worries
Reuters (4/11, Mutikani) reported NFIB “said its Small Business Optimism Index dropped 2.4 points to 93.2 last month, the third straight month of readings below the 48-year average of 98. The index has declined every month this year.”
Bloomberg (4/12, Golle) reported, “The net share of owners expecting better business conditions in the next six months plunged to minus 49%, the lowest in monthly data back to 1986. Some 31% of respondents reported that inflation was their biggest operating challenge in March, up from 26% a month earlier and also the largest share since the mid-1980s.” Marketplace (4/12) reported, “Optimism among people who run small businesses fell in March, this is from the National Federation of Independent Business. Staffing problems and raw material shortages plus inflation…”
Federal Judge Strikes Down National Travel Mask Mandate
The New York Times (4/18, Savage, Murphy) reports a federal judge in Florida “struck down the mask requirement on airplanes, trains, buses and other public transportation on Monday, less than a week after the” CDC “had extended it through May 3.” The ruling “left it up to individual airlines and local transit agencies to decide what to do, and by late Monday, the nation’s largest airlines had dropped their mask requirements for domestic flights.”
Following the ruling, CNN (4/18, Sneed) reports online that “several US airlines...said masks are now optional on their aircraft.” Amtrak and the Washington Metropolitan Area Transit Authority “also announced that they will no longer require masks...though the state-owned and operated NJ Transit and the New York Metropolitan Transportation Authority will keep their requirements.” Axios (4/18, Shapero) reports TSA “will stop enforcing” the mask mandate, “an administration official said on Monday.” Reuters (4/18, Shepardson, Kumar Singh, Mason) reports the official said in a statement, “TSA will not enforce its Security Directives and Emergency Amendment requiring mask use on public transportation and transportation hubs at this time.”
Pandemic Led To Rise In Number Of Small Businesses
The Washington Post (4/6) reports, “The number of business locations increased in almost three-quarters of U.S. counties over the two years through September 2021, according to new research from the Economic Innovation Group, a Washington think tank.” The Post says the increase comes from small business owners’ resiliency, “helped by a combination of direct government support for companies, and aid to households that propped up demand for goods and services, according to the EIG report.”
Nearly Three-Quarters Of US Counties Now Have More Businesses Than In Pre-Pandemic Era. The Hill (4/5, Lane) reported that federal data shows nearly “three-quarters of U.S. counties have seen a net gain of businesses since the start of the coronavirus pandemic.” According to researchers at the Economic Innovation Group (EIG), a bipartisan think tank, as of September, “74 percent of U.S. countries had more physical business establishments than they did before the start of the COVID-19 pandemic and recession in March 2020.” By contrast, “Only 44 percent reached that level five years after the end of the 2007-08 recession and financial crisis.”
Fed Anticipates Rate Hikes Will Curtail Demand For Labor While Slowing Inflation
The Washington Post (4/11, Siegel) reported, “In public remarks, Fed Chair Jerome H. Powell and his colleagues argued that a steady series of seven rate hikes this year can not only bring down soaring inflation, but can also help reset the job market by cooling off demand for labor.” According to the Post, “Powell and other Fed officials hope their plan can balance out the job market and help address a worker shortage that’s become a fraught feature of the recovery.” The Post says Powell “often cites the fact that there are about 1.7 job openings for each person looking for work. ‘So that’s a very, very tight labor market, tight to an unhealthy level, I would say,’ Powell said last month.”
Small Business Owners Object To COVID-19 Aid Redirection Proposal
The Wall Street Journal (4/18, Omeokwe, Steele, Andrews, Subscription Publication) reported that small business owners are bristling over a congressional proposal that would redirect unspent money from COVID-19 small business aid programs to provide $10 billion for the federal government’s pandemic health response, including vaccines and therapeutics.
Small Business Owners Advised To Consider Employee Retention Credit Small Business Marketing
The Business Journals (4/12) reported that business owners who either did not qualify for or did not receive funding from other Covid-19 rescue programs are advised to seriously consider the Employee Retention Credit. The Business Journals said, “It’s a credit that could assist restaurants that missed out on the Restaurant Revitalization Fund, which was quickly exhausted, as well as other hard-hit industries.”
Goldman Sachs Puts Chances Of Recession At 35%
Bloomberg (4/17) reported Goldman Sachs Group anticipates that the Federal Reserve “will face a difficult task in tightening monetary policy enough to cool inflation without causing a U.S. recession, with the odds of a contraction at about 35% over the next two years.” In a research report Sunday, Chief Economist Jan Hatzius wrote that the main challenge facing the central bank “is to reduce the gap between jobs and workers, and to slow wage growth to a pace consistent with its 2% inflation goal by tightening financial conditions enough to reduce job openings without sharply raising unemployment.” Bloomberg says such a “soft landing may be tough, because historically large declines in the gap in the U.S. have only occurred during recessions.” Hatzius said “Taken at face value, these historical patterns suggest the Fed faces a hard path to a soft landing.”
In a separate story, Bloomberg (4/17) says recession fears in financial markets are being stoked by “the fastest inflation in decades and the resulting rush by central banks to raise interest rates.” Those concerns “are being compounded by the impact of aggressive coronavirus lockdowns in China and the war in Ukraine.” In the last week, the US and UK “logged inflation accelerating the most since the early 1980s and the central banks of Canada and New Zealand provided a model for the U.S. Federal Reserve and others by hiking rates 50 basis points for the first time in 22 years.”
Recession Fears Grow Amid Rising Inflation.
The Hill (4/14, Folley, Lane) reported that “fears are growing that a recession is around the corner” as “Americans feel the squeeze of rising inflation.” The economy “is running hot as a record stretch of job growth, steady consumer demand and intense demand for labor has helped fuel the highest inflation rate in 40 years. While the economy has recovered far quicker than many economists expected, the speed of the rebound is putting pressure on the Federal Reserve to take more significant action to help slow price growth.” Wendy Edelberg, “director of The Hamilton Project and a senior economic studies fellow at the left-leaning Brookings Institution,” and other economists say that “in order to combat the skyrocketing inflation...a slowdown is vital.” Edelberg said, “So, now the question is, how smoothly does that slowdown happen? ... And slowdowns can be painful. So, there’s absolutely a risk of a recession.”
Inflation Rising At Fastest Pace In Decades
The AP (4/12, Wiseman) reported that inflation “soared over the past year at its fastest pace in more than 40 years,” according to new Consumer Price Index data released by the Department of Labor on Tuesday. Overall, the CPI was up 8.5% in March over a year earlier, while the core CPI, which excludes volatile food and energy costs, rose 6.5% during the same period.
Biden Administration Bets Strong Job Market Will Stave Off Economic Downturn
The AP (4/8, Boak) said, “The U.S. economy faces plenty of threats: War in Ukraine, high grocery bills, spiking gasoline prices, splintered supply chains, the lingering pandemic and rising interest rates that slow growth.” While the Biden Administration “is betting the U.S. economy is strong enough to withstand these threats...there are growing fears of a coming economic slump among voters and some Wall Street analysts.”
The Wall Street Journal (4/8, Omeokwe, Subscription Publication) reports behind a paywall that some economists are skeptical whether one part President Biden’s economic plan – boosting US manufacturing jobs – will have the intended effect of taming inflation.
Expert Criticizes Email For Customer Communication, Says Texting Is Superior
In a USA Today (4/14, Deerwester) column, lawyer, speaker, and author Steve Strauss wrote that “email is actually a fairly horrible way for business generally, and small business, in particular, to communicate with customers. Unopened and unwanted, ignored and abandoned, emails simply don’t get through anymore.” Strauss went on to argue that texting is superior to emailing.
Marketing Challenges Facing Small Business Owners Highlighted Wages and Benefits
Startup. Info (4/15) highlighted marketing challenges small business owners find themselves confronted with as well as how to deal with said challenges. One of these challenges is content distribution, with Startup. Info saying that content distribution “entails the practice of spreading your content far and wide. But we must state that it’s also a very challenging aspect of marketing.” With regard to how to deal with this challenge, Startup. Info says, in part, “Have a detailed content calendar that shows when, where, and how you spread your content.”
Tips Offered For Small Business To Craft Effective Brand Experience
Small Business Trends (4/9, Pilon) provided “10 tips for creating an effective small business brand experience.” Among the areas small business owners should consider are creating an appealing logo, crafting a brand voice, and improving website design.
Commentary: QR Codes Can Help Business Owners “Bridge The Gap” Between Traditional, Digital Marketing
Michael Plummer, Jr., president of “premier New Mover Marketing franchise” Our Town America, wrote in Forbes (3/30, Plummer) that businesses should “bridge the gap between traditional and digital marketing by learning how to use QR codes as part of your print marketing strategy.” Plummer wrote, “Using QR codes in your marketing materials can help your business connect with customers and drive traffic to your website,” as well as help build an email database to “stay in touch with your loyal customers” and boost customer feedback.
SBA’s National Small Business Week Set For May 1-7
The Lower Bucks (NJ) Times (3/28) said the Small Business Administration’s “National Small Business Week: Building a Better America Through Entrepreneurship is set for May 1-7.” SBA Administrator Isabella Casillas Guzman said the virtual event “celebrates the resiliency and tenacity of America’s entrepreneurs who are doing their part to power our nation’s historic economic comeback.”
Small Businesses Advised To Shift Social Media Strategy To Cope With Instagram Priority Change
Insider (3/28, York) reported that in late 2021, Instagram “announced a shift to prioritizing video-focused content over photo-focused content,” and “small businesses and creators [said] that the frequent updates and changes make it difficult to grow their accounts, especially those rooted in photo content.” Social media coach Kar Brulhart “add[ed] that Instagram’s algorithm is prioritizing video and reels to compete with YouTube and TikTok,” and advised entrepreneurs to “create stop-motion reels to showcase their products in various frames or film clips to compile into a montage.” Amanda Teo, a director of marketing at the sustainable-packaging company Noissue, “add[ed] that video content produced in-house shouldn’t feel overly produced,” and was quoted saying, “We’ve tested more-produced videos versus more-authentic videos, and the authentic videos that look like you just filmed it off your phone with minimal editing performed really well.”
House Democrats Introduce Bill To Require Companies Provide Time Off For Voting
Reuters (4/11, Warburton) reported House Democrats on Monday “proposed legislation requiring employers give their workers paid time off to vote, following failed attempts by Congress to pass major voting rights legislation earlier this year.” In a statement, Rep. Nikema Williams (D-GA) said that the “Time Off to Vote Act” would help states reduce lines at polling places, while Rep. Andy Levin (D-MI) said it would “ensure no worker has to sacrifice their wages or jeopardize their job security to exercise their sacred right to vote.”
Research: 3M Americans Unwilling To Return To Pre-Pandemic Work
The Wall Street Journal (4/16, Mitchell, Subscription Publication) reported new research shows 3 million Americans who quit work during the coronavirus pandemic do not plan to return to pre-pandemic activities even after all restrictions are lifted. According to researchers, these people tend to be women, lack a college degree, and work in low-paying jobs. Th Journal warned that the persistence of “long social distancing” means the labor force is unlikely to bounce back to pre-pandemic levels.
Wages Not Keeping Up With Inflation
CNBC (4/12, Cox) reported that because of the “surge” in inflation, “real earnings, despite rising 5.6% from a year ago, weren’t keeping pace with the cost of living. Real average hourly earnings posted a seasonally adjusted 0.8% decline for the month, according to a separate Bureau of Labor Statistics report. The inability of wages to keep up with costs could add to inflation pressures.”
Jobless Claims Up Last Week, But Remain At New Historic Lows
The AP (4/14, Wiseman) reported that first-time claims for jobless benefits rose 18,000 last week to 185,000, according to Department of Labor data released Thursday, but “remained at a historically low level, reflecting a robust U.S. labor market with near record-high job openings and few layoffs.” The four-week moving average, which irons out week-to-week volatility, rose 2,000 to 172,000.
Walmart Raises Truckers’ Starting Salaries, Launches Training Program To Address Tight Labor Market
CNBC (4/7, Repko) reported Walmart announced last Thursday that it is raising the starting salary it offers to long-haul truck drivers, and the retailer also is launching a training program for drivers, in an effort to attract new workers in a tight labor market. CNBC reported, “The retailer said truck drivers will now make from $95,000 up to $110,000 in their first year with Walmart”; although the company did not indicate the current salary range for new drivers, it “said they have made an average of $87,500 in their first year.” Walmart’s 12-week training program will be centered in Sanger, Texas, and in Dover, Delaware, and it will allow prospective drivers to “earn a commercial driver’s license and join Walmart’s fleet,” and it “will cover the cost of earning a license, which can run between $4,000 to $5,000, said company spokeswoman Anne Hatfield.”
Blue-Collar, Hourly Workers Making The Leap To Tech Jobs
The Wall Street Journal (4/8, Fuhrmans, Dill, Subscription Publication) reported more Americans are moving from blue-collar and hourly jobs to ‘new collar’ roles that involve tech skills and come with better pay and schedules. In fact, according to consulting firm Oliver Wyman, more than a tenth of workers in warehouses, manufacturing, hospitality and other hourly positions have made the switch over the past two years.