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How Donald Trump Would Undo Years of Restaurant Labor Reform

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It's not good

Republican National Convention: Day One Photo by Alex Wong/Getty Images

The newly-approved Republican national platform has been criticized for a number of reasons — it denounces same-sex (and single) parents, aims to reverse progress on gay marriage, and calls for a barrier against "the entirety of the Southern border" (or what some like to think of as a wall between the U.S. and Mexico).

But the GOP’s platform, approved by RNC delegates on Monday, makes a few references to the restaurant industry, too. These are aimed at undoing years of labor reform. Trump has given the document his rubber stamp of approval, telling Bret Baier in an interview last week that it was "largely a Trump platform." Here’s how the "Trump platform" would affect the restaurant industry.

Minimum Wage

The document makes the GOP’s stance pretty clear: "Minimum wage is an issue that should be handled at the state and local level." Translation: Raising the federal minimum does not appear to be a priority for Trump. The rationale behind this is that different cities and municipalities have different economies and should therefore be able to make their own laws concerning wages. Putting this into practice, though, has been difficult.

Some states — Alabama, for instance — have attempted to veto local initiatives. Perhaps unsurprisingly, this most often occurs in cases where the municipal minimum is higher than the state minimum.

Christin Fernandez, the director of public affairs at the National Restaurant Association, says her group "can’t speak to Mr. Trump’s platform specifically as an Association," as it doesn't endorse Presidential candidates. But she does believe increasing the minimum wage at the local level is "a tactic that is bad for business," arguing that restaurateurs are "already navigating an uncertain economic and regulatory environment. Grappling with multiple minimum wages across city lines does not make good economic sense."

Saru Jayaraman, co-director of the Restaurant Opportunities Center, says handling wages at the state and local level "is simply impossible" in certain parts of the country: "If someone ordered that minimum wage was a state issue, workers in the South would never see their wages increased." That’s because, she says, districts in many Southern states are controlled by Republicans who have worked hard to preempt minimum wage laws.

One example of how difficult this proposal would be to pull off? After Birmingham, Alabama passed a law to raise the minimum wage earlier this year, the state then passed a bill barring cities and counties from raising their minimum wages, effectively rolling back Birmingham’s law.

The current federal minimum wage has stagnated at $7.25 per hours since 2009; Obama sought to increase it to $10.10 in 2013. Hillary Clinton has come out in favor of a $15 minimum wage.

Franchises

According to the GOP platform, the current administration is "attacking the franchise model of business development, which is essential to the flexibility and creativity of the new economy." This line serves as a not-so-veiled reference to the joint employer standard, which McDonald’s has been fighting in courts recently.

The current McDonald’s trial could have major implications for the franchise industry at large, and will determine the answer to one major question: Can McDonald's the corporation be held legally responsible for what goes on at its thousands of independently-owned franchise stores? In other words, if a worker is mistreated or underpaid, can McDonald’s, the corporation, be sued?

According to its platform, the GOP would likely say no, arguing that McDonald’s corporate shouldn’t be held responsible for its franchisees.

That’s a big problem for restaurant workers, says Jayaraman. "The truth is that companies like McDonald’s and Denny’s maintain a ton of control over their franchised operations — when it comes to everything from uniforms, to food preparation, to marketing. Basically, everything except labor conditions. That is very purposeful. They want to wash their hands of liability."

Jayaraman says that if Trump and the GOP aren’t willing to have a joint employer standard, they need to question whether chain restaurants can have similar controls over their menus, local ads, and food. The entire franchise model, in effect, would be in question.

Overtime

The Department of Labor recently issued a rule doubling the federal overtime limit (beginning in December, salaried workers making less than $47,476 must be paid time and a half for any work beyond 40 hours a week).

The measure was applauded by many in the middle class and by Democrats. But as Politico noted, according to the GOP’s platform, "[The Obama administration is] wielding provisions of the Fair Labor Standards Act from the 1930s, designed to fit a manufacturing workplace, to deny flexibility to both employers and employees."

House and Senate republicans have both sought to roll back that bill and it seems likely that Trump would, too.

Fernandez says the National Restaurant Association is "definitely supportive" of legislative "fixes" to the overtime rules, though doesn’t say she wants to undo the law entirely. The group supports a piece of legislation put forward by Congressman Schrader (D-OR) that would allow a for a three-year phase-in period of the rule.

Jayaraman says rolling back overtime rules "would be disastrous," arguing that the new regulations reflect an increased cost of living, and help prevent wage abuse.

Interestingly, in June, a USA Today investigation found that Trump himself has been accused of not paying his workers’ overtime. At least 60 lawsuits, along with other documents, accused Trump and his businesses of failing to pay them for their work. Forty-eight waiters and dozens of bartenders were among those to make the claims.

Jayaraman says the platform seems, to her, to be uninformed: "It reflects such a waffling on the issues. Like everybody else, I am terrified of the kind of havoc the Trump administration could have on our industry."

Trump is set to formally accept the Republican party’s nomination on Thursday night.

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