Additional Relief for the Hospitality Industry Has Arrived. Is It Enough? | Wine Enthusiast
Wine bottle illustration Displaying 0 results for
Suggested Searches
Articles & Content

Additional Relief for the Hospitality Industry Has Arrived. Is It Enough?

Demi Elder was laid off from her job as a server at the P.J. Clarke’s in Battery Park, New York City, shortly after the restaurant shut down on March 14, 2020. Due to downsizing across P.J. Clarke’s six-restaurant group, Elder still hasn’t been invited back to work.

On March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan (ARP) stimulus bill into law. With it comes the promise of a new round of financial aid to millions of business owners and out-of-work hospitality professionals like Elder. For some, however, it all feels like too little, too late.

“I’ve seen we’re getting $1,400,” says Elder of the stimulus checks that began arriving via direct-deposit on March 13. “We really should have been getting a lot more.”

Those $1,400 stimulus checks are available to those who file their taxes as a single person and earn less than $75,000 annually. Joint-filers can expect $2,800 if they made less than $150,000 last year, and those who qualify under single or joint income thresholds can expect $1,400 per dependent.

“Things are starting to look better at least on paper for us.” —Jeremy Umansky

The ARP also allows the first $10,200 of unemployment insurance earned in 2020 to be tax free for those earning below $150,000, and “unemployment is getting a $300 boost through September, too,” says Elder of the ARP’s pledge to continue the supplementary $300 Federal Pandemic Unemployment Compensation (FPUC) payment that debuted in January until September 6, 2021.

The Pandemic Unemployment Assistance program (PUA), which provides assistance to freelancers and gig workers, will be extended until the end of August. Undocumented residents are ineligible for both these benefits, however, despite making up an estimated 10% of all U.S. service workers, according to the Pew Research Center.

Navigating the complexities of the ARP benefits is challenging. Elder says that despite the calamity of filing for unemployment she endured, she has been certifying for benefits since March 2020.

Filers who were owed but did not receive either of the first two stimulus checks in 2020 can claim the Recovery Rebate Credit, found on line 30 of the 1040 tax form. On March 13, the IRS extended the date for this year’s taxes to May 17 to allow people to adjust to these latest provisions of the ARP.

Restaurant waiter mask wine
The ARP adds $7.25 billion in funding to the controversial PPP loan program, bringing to total amount $813.7 billion. / Getty

This could prove especially useful for hospitality professionals like Chottip Nimla-Or. She has been bartending at Lady Jane in Denver, Colorado since October 2020. She relocated to the area from New York City because her restaurant job there had not invited her back to work.

She now earns about one-third of what she made in Manhattan, she says. However, the majority of the ARP benefits don’t apply to her because they’re based on her 2019 tax return, when her income was significantly higher.

“The unemployment tax rate cut helps me, but I’m happy all the other things are in place to help people with their kids who need the extra support,” says Nimla-Or.

The bill also outlines a new Child Tax Credit, promising up to $3,000 per child in 2021, or up to $3,600 for a child under six years old. Qualifying means a family needs to earn under $150,000, or $112,500 for head of household. Half of this tax benefit will come as a recurring monthly check, and the other half as a return after the 2021 tax season.

“I hope this goes past the pandemic, because I think this is the kind of universal income that we need to fix the country,” says Nimla-Or. “All these parents who are struggling are working outside the home, working at home and they’re also somehow at-home teachers. It’s a lot of pressure on those people.”

Jeremy Umansky is co-owner and chef of Larder, a modern delicatessen in Cleveland, Ohio. The 30-seat restaurant did 50% of its business in takeout last year, and Umansky says he needed to make big changes to preserve the safety of his staff while doing so.

“We ended up losing three hours off each day and stopped offering Sundays,” says Umansky. “We are a small, family-owned business. We don’t necessarily have the resources to plexiglass everything out or wrap the restaurant in a bubble.”

Umansky says Larder had 10 non-management employees just prior to the pandemic. As of March 2021, Larder has six employees.

Portions of the ARP are modeled after the RESTAURANTS Act, which proposed a $120 billion restaurant relief fund. The ARP allocates $28.6 billion in relief to restaurants. Over $5 billion of that is for grants for smaller hospitality businesses whose annual revenue is under $500,000. Grants are capped at $5 million for small businesses and $10 million for restaurant groups.

For scale, U.S. restaurants reported a $240 billion loss in food sales in 2020. That comes to $20 billion a month since the start of the pandemic.

The ARP adds $7.25 billion in funding to the controversial PPP loan program, bringing to total amount $813.7 billion. On March 25, the Senate passed a bill to extend the PPP loan application period an additional 30 days, ending May 31. The Small Business Administration has reported an overwhelming backlog of applications, and so Congress will give it another 30 days after May 31 to process them.

Umansky says Larder was able to secure a PPP loan in 2020 and that was enough to help the business stay afloat, although he isn’t sure the restaurant will qualify for any further assistance from the ARP. Instead, Larder will continue to count on its community for support.

“It’s kind of like this knife edge that we are working on,” says Umansky. “Things are starting to look better at least on paper for us. And especially with the change of weather coming, more people on foot means more people coming in for us. I’m just not sure yet if on paper we’re gonna qualify.”

“I hope this goes past the pandemic, because I think this is the kind of universal income that we need to fix the country.” —Chottip Nimla-Or

Despite all the provisions for individuals and businesses alike, Elder is unconvinced this is a true rescue plan.

“I don’t think it’s enough, I think we’re just very used to accepting crumbs. That is how we end up accepting the things they do give us,” she says. “They still won’t give a $15 minimum wage. And at this point even that’s too little. [Congress] took all this time voting and deliberating. And it’s usually just against ways to make everything easier for everyone.”

The $15 federal minimum wage provision of the ARP was dropped from the bill just before its passing, despite a Reuters/Ipsos poll reporting 59% of respondents supported the proposed $15 minimum wage. A provision to end the controversial minimum tipped wage, which would have raised tipped employees minimum wage to $15 nationwide had both measures passed, also failed to make into the final version of the bill.

In January, Nimla-Or caught coronavirus when numerous members of Lady Jane’s staff contracted the virus. Once she tested negative again, she returned to work, absent her senses of taste and smell.

“We had to have our regulars at the bar help taste cocktails to make sure they tasted right,” says Nimla-Or. Several of her colleagues had also lost their senses of taste and smell.

Elder says she’s going to be fine collecting unemployment for a while longer and is looking for a new job as a sommelier. She began moving through the WSET diploma track this winter.

“I’m looking, but I’m also being safe,” she says. “Nothing has seemed worth the risk. I have a roommate who is immunocompromised now, and I just don’t want to put my life on the line.”