Washington Restaurant & Lodging Magazine July 2016 by Washington Hospitality Magazine

WA S H I N GTO N

July 2016

& Lodging M

Legislative

Review Challenges

of a Short Session Our Legislative

Heroes Election

2016

Washington Restaurant Association 510 Plum Street SE, Suite 200 Olympia, WA 98501-1587

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walodging.org/convention

For sponsorship and trade show opportunities, please call Michele Holmes at 206.423.3902.

PRESENTED IN PARTNERSHIP

Inside Features

From Your Government Affairs Committee

The 2016 Session in Review

The Search for a Minimum Wage Solution

2016 Elections

Heroes to Our Industry

Understanding the New Federal Overtime Rules

In Every Issue

WA S H I N GTO N

July 2016

& Lodging M

Legislative

Review Challenges of a Short Session Our Legislative

Heroes Election

President and CEO: Facing a Fork in the Road

News Briefs

Local Government Affairs Update

Calendar/New Members

Ask the Expert: Reward Hustle

On the Cover

Washington’s 2016 legislative session is over. This issue recaps the session’s highlights and how your WRA/WLA is working for you in Olympia and in cities throughout Washington state.

Washington Restaurant Association 510 Plum Street SE, Suite 200 Olympia, WA 98501-1587

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2016

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EDITORIAL STAFF Publisher, Anthony Anton Executive Editor, Lex Nepomuceno Editor-in-Chief, Marianne Scholl Art Director, Lisa Ellefson Managing Editor, Paul Schlienz Contributing Editor, Andy Cook Contributing Editor, Stephanie Davenport Contributing Editor, David Faro Contributing Editor, Jillian Henze Research Editor, Sheryl Jackson JOINT EXECUTIVE COMMITTEE WRA Chair, Phil Costello Stop N Go Family Drive In WLA Chair, Matt Van Der Peet The Westin Bellevue WRA EXECUTIVE TEAM President and CEO, Anthony Anton Vice President, Teran Petrina Director of Business Development, Ken Wells Director of Communications & Technology, Lex Nepomuceno Director of Government Affairs, Bruce Beckett Director of Internal Operations, Kylie Kincaid Director of Membership, Steven Sweeney Education Foundation, Naja Hogander

President and CEO

Facing a Fork in the Road By Anthony Anton Every so often, leaders and communities arrive at a difficult fork in the road that will define the path forward for decades to come. Washington and many other states now face such a fork, and the route each state takes will dramatically shape its employees and employers, its economic security and government functions for generations. Should Washington’s policies be set at the state level or at the local level? Road A leads to the state being completely out of the labor regulatory business. Minimum wage, overtime laws, paid leave and workplace safety laws will differ by city and county, depending on where you are in the state. Road B returns the state in the direction of statewide policies and away from a confusing patchwork of regulatory systems. However, individual communities may be unsatisfied with compromises made for the whole that do not match the desires and needs of their areas. Obviously, for transportation and higher education there will always be an important role for Olympia, but what if, from an industry operations perspective, the legislature were irrelevant.

510 Plum St. SE, Ste. 200 Olympia, WA 98501-1587 T 360.956.7279 | F 360.357.9232 www.warestaurant.org │walodging.com Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification. Reproduction of articles appearing in Washington Restaurant & Lodging Magazine are authorized for personal use only, with credit given to Washington Restaurant & Lodging Magazine and/or the Washington Restaurant Association. Articles written by outside authors do not necessarily reflect the views or positions of the Washington Restaurant Association, Washington Lodging Association, their Boards of Directors, staff or members. Products and services advertised in Washington Restaurant & Lodging Magazine are not necessarily endorsed by the WRA or WLA, and do not necessarily reflect the opinions of the WRA, WLA, their Boards of Directors, staff or members. ADVERTISING INQUIRIES MAY BE DIRECTED TO: Michele Holmes Allied Relations Manager 206.423.3902 micheleh@warestaurant.org Washington Restaurant & Lodging Magazine is published monthly for WRA and WLA members. We welcome your comments and suggestions. email: news@warestaurant. org, phone: 800.225.7166. Circulation: 6,310.

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The WRA and WLA are attempting to read the tea leaves of what will unfold over the next few years. Our mission is to help our members succeed, so where do we invest our time and resources to help ensure that Washington’s hospitality businesses have a voice in the policies that will dramatically impact them? After years of building one of the top GA programs in the state capitol, what is the correct balance between local and state government affairs? Three years ago, the WRA was the first statewide association to hire a full-time government affairs representative at the city level. We now have four full-time local representatives and two full-time local communication professionals, yet we are still well behind the millions being spent locally by big labor unions. Here are a few of the other big questions we are asking? Should we be advocating to push our state down one road or the other? How do we encourage all sectors of business to join with us? Frustratingly, we are still alone in making a major investment in local policy efforts. What should our role be in leading all Washington employers to wake up and get engaged effectively? All of these questions have great pros and cons. I am not advocating one answer over another. I simply want to raise awareness of the decisions in front of us. As WRA and WLA members, your input and guidance in these decisions will be critical to the success of whatever path is chosen. Please contact your area coordinators and let them know you want to be a part of a process that will definitely impact your business. Help us help you succeed.

LODGING

FULL SERVICE

QUICK SERVICE

Primary Source of Information | News Briefs Serve These Fish The Environmental Defense Fund (EDF) wants restaurateurs to help celebrate, and source, formerly at-risk fish species that are back from the brink. Thanks to better management practices, America’s fisheries offer a growing list of sustainable, abundant and great-tasting fish. The EDF, in partnership with the National Restaurant Association’s Conserve Program, has launched the Eat These Fish campaign to tell the story of this environmental achievement and to encourage sourcing of the nation’s sustainable fish. “We wanted to share a positive story about seafood and let people know there’s a lot of good fish out there,” said Tim Fitzgerald, director of the EDF’s Fishery Solutions Center. Eat These Fish focuses on 12 species that exemplify what happens when fisheries shift to smarter management. These include Pacific Ocean perch, snow crab, lingcod, longnose skate, yellowtail rockfish, chilipepper rockfish, whiting, Acadian redfish, monkfish, red snapper and red grouper. The campaign offers suggestions on how to incorporate these American fish onto menus and features inspiring stories restaurateurs can share with their guests about the fish and the recovery of our fisheries. Learn more at www.eatthesefish.com. Is Golf Fore! Education on Your Calendar Yet? It’s never too early to sign up to support culinary education in Washington state high schools. Golf Fore! Education helps fund our ProStart program and ProStart scholarships, and registration is now open for the Sept. 20 tournament. It takes place at the Washington National Golf Course in Auburn and will have a shotgun start. The tournament is followed by a dinner and auction, all dedicated to helping bring ProStart’s industry-driven curriculum and mentoring program to Washington high schools. The event also raises funds for scholarships to help talented ProStart students continue their culinary education beyond high school. ProStart is a nationally accredited program that teaches high school students culinary techniques and restaurant management skills and gives them an introduction to the opportunities and rewards of working in the foodservice industry. It changes the lives of students, many of whom discover a passion for working in the culinary and restaurant world. Their success contributes to the success of our industry. Sign up to play or find out about the many other ways you can contribute to Golf Fore! Education. Sponsorships are available and auction items are gladly accepted. Learn more at www.wraef.org under the Events tab.

It’s time to get the Pacific Northwest’s

foremost

gathering of lodging professionals on your calendar. NOV

NOV

Lodging Convention to Delve into Changes in Employment Laws It’s been a big year for big changes in federal employment law, from the Department of Labor’s joint employer rule to new overtime restrictions, which double the minimum salary for exempt status. To help lodging owners and operators comply with all that has changed, the 2016 Washington Lodging Convention will feature a presentation by Fisher & Phillips attorney Andria Lure Ryan on key issues and the intersection of federal and Washington state employment laws. The annual Convention & Trade Show takes place this year on November 6-8 at the Grand Davenport Hotel in Spokane. It is the state’s largest gathering of lodging professionals and builds on a long tradition of delivering timely education, training and industry networking. The 2016 focus is on speakers who will help hoteliers respond to the trends that are reshaping our industry. Register now to learn how to harness new technology to drive your business, how to lead your teams to grow their talent and potential and how to manage your operations and staff to avoid legal risk. Register now and save with the early bird rate at www.walodging.org/ convention. July 2016 │ 7

L GOVERNMENT Local Affairs Update O Government C A L

AFFAIRS

UPDATE

The Seattle Factor By Jillian Henze Seattle is looking at a wide range of proposals that, if adopted, will profoundly impact our industry in Seattle and quite possibly beyond. We are working closely with the Seattle Restaurant Alliance and the Seattle Hotel Association to shape city policy proposals to reflect the realities of our industry and not undermine what draws employees and guests to our businesses.

Restrictive Scheduling

Seattle is looking to regulate how large restaurant and retail employers schedule their employees. The city’s Civil Rights, Utilities, Economic Development & Arts Committee has been analyzing scheduling legislation that went into effect in San Francisco on March 1, 2016, as well as a model developed by the Center for Popular Democracy. Stakeholders have been participating in meetings to discuss the key aspects of possible legislation. Among other things, the definition of “large” employers is still to be determined. Councilmembers Kshama Sawant and Lisa Herbold have spoken in committee about more penalty pay options than what is in the San Francisco model.

initial arguments for this policy, which was to penalize for employer changes. The city is scheduled to release, in early July, the findings of a city-commissioned survey of employers and employees on scheduling practices. The WRA has conducted its own restaurant employee survey to inform its policy and messaging on this issue. While this plays out at City Hall, your local Government Affairs team is hard at work shaping the policy so that Seattle hospitality employees do not lose the flexibility that draws employees to the industry.

Initiative 124

UNITE HERE Local 8 is gathering signatures and publicity for Initiative 124, a proposed ballot initiative that would impose a variety of workplace provisions on Seattle hotel employers. It is the first such proposal in the country. If passed, hotel employers would need to install panic buttons to protect housekeepers from sexual assault and harassment by guests, and individual properties would be required to maintain a blacklist of guests accused of assaulting employees.

In San Francisco, if an employee voluntarily initiates any schedule change, including a shift swap, within the seven-day predictability pay penalty window, the employer is not fined. If the employer initiates the change, the employer is fined.

The initiative also seeks to limit housekeeper workloads at large hotels to no more than 5,000 square feet of floor space per day and would require large hotels to pay for gold-level health care plans. The definition of “large” is not included in the initiative. In addition, the initiative has six-month employee retention provisions in the event of a transfer of ownership. Like most of the provisions in the initiative, these would be waivable with a collective bargaining agreement.

In Seattle, labor representatives and some councilmembers argue that any deviation in an employee’s posted schedule within the predictability pay fine window should entitle the employee to an hour of penalty pay, regardless of who initiates the change. For example, if Employee X calls in sick and Employee Y comes in to cover the shift, Employee Y would be entitled to an additional hour of pay.

Seattle hoteliers care deeply about the health and safety of their employees and work collaboratively with their teams to address issues and ensure a safe, healthy and supportive work environment. Their concern with the initiative is that its true purpose is to support collective bargaining agreements, as the labor standards and health insurance requirements it calls for could be waived by a union through collective bargaining.

The proponents of this position believe Employee Y has to change his or her schedule regardless of the reason, so the employee should be entitled to the additional pay. Penalizing employers for employee-initiated actions contradicts the

If UNITE HERE collects at least 20,638 valid signatures, the council will have to decide if they want to pass the initiative as an ordinance or put it on the November ballot.

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Paid Family Leave

Paid family leave is being addressed by Seattle’s Gender Equity, Safe Communities & New Americans Committee. Councilmembers and staff have been reviewing paid family leave policy examples from public and private employers as well as state insurance plans. California, for example, has an employment insurance program that provides partial wage replacement to employees when they take time off work to care for a family member. San Francisco recently passed a hybrid program that requires employers to supplement the state’s insurance coverage to make six weeks of fully paid parental leave available to all employees working in the city. To date, the committee has focused on definitions and how paid family leave relates to using other leave such as vacation or sick and safe time. The committee is also evaluating methods for instituting a policy change. A proposal on paid family leave is expected later this year or in early 2017. The SRA and SHA are supportive of paid family leave and will work with policymakers to ensure requirements do not place an unnecessary administrative burden on employers.

Office of Labor Standards

Seattle is grappling with how to fund the Office of Labor Standards, its version of the state’s Labor & Industries Department. Mayor Ed Murray has released a proposal that would use the general fund to increase the OLS budget by $3.7 million in 2017. The mayor’s proposal places the implementation of labor laws as a general fund responsibility and does not require new taxes on business. The WRA and WLA support this position. Also at issue is the need to increase funding for educating employers on the city’s labor laws. Labor wants employers to pay for education and enforcement. SEIU 775 filed an initiative that would impose a head tax to fund OLS and pay for labor union and nonprofit outreach. This proposal would decrease the proportion of funding for educating businesses about the city’s labor laws to just 17 percent of the OLS budget.

The Civil Rights, Utilities, Economic Development & Arts Committee is working on the issue, and it is expected to be resolved this summer.

Regulating Seattle’s Short-Term Rental Market

In early June, Seattle Mayor Ed Murray and Councilmember Tim Burgess released a proposal to regulate short-term rental properties in the city. Their measure focuses on restricting commercial operators who use online platforms, such as Airbnb and VRBO, to rent multiple properties year-round. It would still allow residents to rent out their homes. Under the proposal, any property in the city could be provided as a short-term rental for up to 90 nights in a 12-month period. Only properties that are the primary residence of the short-term rental operator would be allowed to rent past the 90-night threshold with a short-term rental operator’s license. The primary residency requirement is intended to curtail the conversion of homes in the long-term residential market to shortterm rentals, which are defined as consecutive stays of fewer than 30 days. Murray has declared an affordable housing crisis in the city, and the primary goal of the proposal is to “balance the economic opportunity created by short-term rentals with the need to maintain supply of long-term rental housing stock available at a range of prices,” according to a document posted by the Mayor’s Office. The proposal would also better protect the rights and safety of owners, guests and neighbors of short-term rental units by shutting down illegal hotels. It is estimated that 80 percent of existing short-term rentals in Seattle would not be affected by the proposed regulations. More solid policy ideas are forthcoming, and legislation is expected to be in place by the budget season in October.

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From Your Government Affairs Committee Dear Members, Our associations are most effective when members engage and, as the co-chairs of the WRA/WLA Government Affairs Committee, we are truly grateful to you, our fellow members, for your active support of our associations’ advocacy work. We had a record turnout at our 2016 Hill Climb and Taste Our Best reception and strong participation on our weekly GAC calls. It was also the first year of WRA and WLA joining forces, and we saw our combined efforts increase our ability to effectively advocate for the hospitality industry. After extensive member input, the WRA/WLA Government Affairs Committee identified four priority issues for the 2016 session: Find a statewide solution to minimum wage and paid sick leave. Establish funding for an industry-run, statewide tourism promotion program. Eliminate the 17 percent fee on spirits sales from retailers to restaurants. Regulate music licensing vendors. The 2016 legislative climate, however, was not conducive to pushing any significant policy initiatives. When the Legislature convened in January, lawmakers had very low expectations for the session after spending more than six months in Olympia in 2015. Their goal was to adopt a supplemental budget that responded to revenue changes, covered the unexpectedly high cost of fighting wildfires and addressed problems at the state’s psychiatric hospitals. Lawmakers on both sides of the aisle were reluctant to push any new policies – even policies that had been debated during the 2015 session. Despite the session’s narrow focus, we were successful in securing important legislation to regulate the conduct of music licensing agencies and their representatives. Our efforts on tourism promotion and minimum wage issues, however, did not make it over the finish line. Many legislators, along with business community groups, had not expected substantive debate on either issue. Remarkably, your GA team very nearly prevailed in reaching solutions on both, with minimum wage and tourism marketing still under discussion as the special session came to a close. The WRA/WLA team also successfully defended members against harmful legislation. They helped stop bills that would have granted the Liquor and Cannabis Board authority to regulate pricing; would have eliminated the B&O credit for pop syrup; and would created an inadequately thought-out mandatory human trafficking prevention program for hotel employees. Looking forward, your engagement will be more important than ever. As you’ll read in this issue, our industry faces increasing challenges, from restrictive scheduling, new workforce standards for hotel employers and other emerging issues at the local level, to a possible statewide minimum wage of $13.50 an hour. We’re also facing critical elections this year, which will determine the governorship and the balance of power in the Legislature. We are lucky to have a GA team that truly desires your input and is well-equipped to represent our industry during this unprecedented time. We encourage you to become involved as even greater member engagement will strengthen the team’s effectiveness. Thank you for supporting the important work of our associations. Shannon Boldiszar Tim Bathke Chad McKay │ │ Starbucks Warwick Seattle El Gaucho Hospitality

July 2016 │ 11

The 2016 Session in Review By the WRA/WLA Government Affairs Team

As one of 19 states with a biennial budget, Washington has a 60-day legislative session in even years like 2016. The primary purpose of a short, even-year session is to make adjustments to the two-year spending plan adopted the prior year. Whenever the Legislature convenes, however, lawmakers are free to raise any issue and pass new legislation unrelated to the budget.

the McCleary decision, the State Supreme Court’s mandate to dramatically increase funding for K-12 education by 2018. Lawmakers also had to balance modest changes in revenue and caseloads.

The tone coming into the 2016 session was, unfortunately, influenced by last year’s long, drawn-out session. Legislators did not complete work on the 2015-17 budget until the first week of July, a record-breaking three months and three special sessions after their scheduled adjournment. The grueling process of reaching a biennial budget agreement—combined with vigorous debate over countless policy issues—meant lawmakers arriving in Olympia in January 2016 were only in the mood to “fix what has to be fixed” and move on.

THE BALANCE OF POWER

Accordingly, the focus of state legislators was on three budget-related goals: paying for the cost of unprecedented wildfires that ravaged parts of the state in 2015; addressing the state’s mental health care system in response to problems exposed at Western State Hospital; and continuing to move toward fulfilling the requirements of

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Legislators and leaders on both sides of the aisle worked hard to set low expectations. They said repeatedly that a short, 60-day session, especially on the heels of the marathon 2015 session, was not the appropriate time to address controversial policy issues.

The State Senate remained under the leadership of the Majority Coalition Caucus–a coalition of Republicans and Democrats who together in 2016 led by a three-seat margin. First established in 2012, the MCC has been steadfast in its commitment to achieve a balanced budget that meets the Supreme Court’s education mandate without imposing new taxes or fees on business or citizens. In contrast, the House of Representatives has seen a slow, but significant change in its party makeup. Last fall, Republican Teri Hickel prevailed in a special election to replace the late Rep. Roger Freeman, D-Federal Way, in the 30th Legislative District. The House remained under Democratic control after Hickel’s election, but only by a razor-thin, 50-48 margin. Republicans have been gaining seats in the House during the past several election cycles and had nearly equal power coming into the 2016 session.

With only a one-vote margin in the House, majority Democrats were disciplined in not bringing controversial policy issues to the floor.

YET ANOTHER SPECIAL SESSION

Although lawmakers wanted to complete their work on time, or earlier, the Legislature failed to complete its business within 60 days, requiring the governor to call a 30-day special session.

WRA/WLA PRIORITIES

In this challenging legislative environment, the WRA/WLA government affairs team had four priorities: Find a statewide solution to minimum wage and paid sick leave. Establish funding for an industry-run statewide tourism promotion program. Eliminate the 17 percent fee on spirits sales from retailers to restaurants. Regulate music licensing vendors.

It was a collective déjà vu. As in 2015, House Democrats and Gov. Jay Inslee were once again championing new or increased taxes and fees to balance the budget and more quickly increase K-12 education funding, while the Senate held firm in the belief that new or increased taxes or fees were unnecessary. Close to the end of the special session, an agreement was reached on a supplemental budget that added spending for mental health, addressed wildfire costs and added to education funding.

The WRA and WLA were successful in securing the passage of music licensing legislation. In the face of strong opposition, the Legislature did not address paid sick leave or liquor fees. However, there were discussions of a minimum wage solution (see pages 18-19), and the Legislature explored new options for funding tourism. While we are proud that both the tourism and minimum wage issues were being debated until the final hours of both the regular and special sessions, we are disappointed that these two important issues remain unresolved. Despite the challenges, your Government Affairs team was successful in defending against legislation that would have hurt our industry, as we Stopped an attempt to give the Liquor and Cannabis Board authority to regulate pricing. Prevented the establishment of a new taxing authority for local street repair and maintenance. Preserved the B&O credit for pop syrup. Stopped an inadequately thought-out mandatory human trafficking prevention program for hotel employees.

LOOKING AHEAD

The 2017 session is setting up to be extraordinary. The Supreme Court’s education funding directive comes due in 2018, and the 2017 Legislature will have to resolve how it meets the requirements for higher funding for K-12 education. Discipline in budgeting, which has ultimately prevailed over the past four years, is likely to be helpful in 2017. Much will depend, however, on the general election, which will determine which party has a majority in the House and Senate and whether or not Gov. Inslee is re-elected. Then the pressing question will be whether or not there is enough revenue to meet the Supreme Court’s mandate or if the Legislature will turn to new taxes and fees to fully fund education. July 2016 │ 13

MUSIC LICENSING

As you know, hospitality businesses have had to jump through many hoops to legally play music in their establishments, and dealing with music licensing companies has been a significant challenge. This year, your legislative team scored a big win with the passage of House Bill 1763, which the governor signed into law on March 29. This important piece of legislation will dramatically help restaurant, bar and hotel operators in their interactions with music licensing companies. Under the new law, music licensing agencies cannot collect licensing fees in Washington unless they: Have a valid Washington UBI number. Register with the Department of Licensing and annually file an electronic copy of each performing rights agreement they use for royalty payments. Make available to business operators the most current list of performing works to which they hold copyrights. The law also establishes a code of conduct for music licensing agencies. When the law goes into effect on Jan. 1, 2017, licensing representatives operating in Washington state: Must identify themselves and disclose that they are agency representatives. Must disclose the purpose for being on your property. May not engage in any coercive conduct or be “substantially disruptive” to your business. May not use obscene or abusive language when communicating with you or your employees. May not use or attempt to use any unfair or deceptive acts or practices in negotiating with you or your representatives. May communicate with you or your representatives during non-business hours by telephone or in-person at a location other than your business location only if you authorized them to do so. Must address all communications to your attorney if directed to do so by written notification from that attorney. If the agency or its representatives violate any of the above, they are subject to $1,000 fine. The law also calls on agencies to conduct outreach campaigns to educate businesses on their rights and responsibilities with regard to copyrighted music. This is a complete turnaround. Many hospitality businesses have paid dearly for being uninformed or mislead about licensing requirements, and this new law will change that. Your GA team is proud that this legislation offers new protections to hospitality businesses, making it easier for members to succeed. 14 │ warestaurant.org

LIQUOR

In 2011, voters passed a law to repeal uniform pricing and what was then the Liquor Control Board’s ability to set prices. The law also allows price to be determined for “any bona fide business reason.” Despite this new law, in October 2015, the LCB (now the Liquor and Cannabis Board) adopted an awkward pricing system which favors some stakeholders over others, leaving restaurants, bars and hotels at a disadvantage. The LCB’s rules set up a separate pricing scheme for spirits and for wine, requiring spirits be sold to all licensees at the same price. Under the rules, discounts may only be given on quantity purchases of a specific brand. In contrast, the LCB provided greater pricing flexibility for wine.

lawsuit. For these reasons, the WRA/WLA team vigorously opposed the legislation. The bills failed to move forward after our opposition was made clear. Efforts to undo the law voters passed in 2011 are expected to continue, and the WRA/WLA team will continue to fight for what members want and what is best for the state’s hospitality businesses.

BUDGET

The purpose of the short session with regard to budgeting is to pass a supplemental budget which does not drastically change the original biennial budget. This was a difficult task for legislators this year.

The WRA and WLA, together with the Northwest Grocery Association and Costco, filed a lawsuit against the LCB over its clear violation of and disregard for the 2011 law. The lawsuit challenges the LCB’s rules on two fronts: their violation of the law and the arbitrariness of the rule-making process. Distributors agreed with the LCB’s restrictive rules, but they want the opportunity to price spirits with the same leeway that was given to wine sales.

The 2016 session adjourned on March 11 with a flurry of activity, but without a supplemental budget agreement. Gov. Inslee immediately called the Legislature back for a 30-day special session and demanded lawmakers come together on a budget. In an unprecedented move, the governor also vetoed 27 bills that were on his desk in an effort to encourage lawmakers to find compromise.

In the 2016 session, distributors introduced legislation (SB 6324/HB 2577) and secured bill sponsorship by not mentioning our industry’s position on the topic. The legislation would have amended current law, which allows price differentials (not lower prices) to occur for any reason and only between on-premises licensees and off-premises licensees, so long as this was “reasonably” made available to all other licensees. Further, this bill would have given the LCB the rulemaking authority to determine what is “reasonable” and would have invalidated the WRA/WLA

Over the next 20 days, budget negotiators worked late into the night. House Democrats continued to ask for more revenue, but the Senate MCC remained steadfast in its opposition to new taxes. On March 29, lawmakers finally agreed on a supplemental budget. Then the Senate and House proceeded to override the governor’s 27 vetoes. Gov. Inslee did not oppose these veto overrides as the Legislature had completed its budget work. The final budget contained no new taxes, protected the rainy day fund and complied with the state’s four-year spending rule that requires a balanced budget at a four-year outlook. July 2016 │ 15

TOURISM

Tourism in Washington is a $16.4 billion dollar industry that generates $1.8 billion dollars in annual tax revenue and supports more than 150,000 jobs. Despite its importance for the state and local economies, Washington remains the only state without a statewide tourism marketing program. The WRA, WLA and Washington Tourism Alliance have worked hard and continuously thought outside of the box to establish an industry-funded and industry-governed state tourism promotion program. While most members of the Legislature understand the value and return on investment of a robust tourism program, we have had an incredibly difficult time gaining consensus on a specific funding model. The two proposals on the table this year were Senate Bill 5916 first introduced in 2015 by Sen. Sharon Brown, RKennewick, and House Bill 2552 introduced in 2016 by Rep. Cary Condotta, R-East Wenatchee. Both proposals would have established a Washington Tourism Marketing Authority (WTMA) to manage tourism program funds under a governing board comprised of representatives from the state’s five tourism sectors: restaurants, lodging, attractions and entertainment, retail and transportation. The proposals differed in their funding mechanisms.

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Senate Bill 5916 was based on an industry self-assessment model, with different assessment plans for each of the five tourism sectors. The lodging sector would have assessed 15 cents per room per occupied night. Foodservice assessments would have ranged from $25 to $3,500 per business based on the adjusted gross revenue from the previous calendar year. Sixty-nine percent of foodservice businesses would have paid $25 per year and only 2.5 percent would have paid more than $700. This model would have raised $7.5 million annually to fund tourism promotion, requiring no money from the state to expand Washington’s tourism industry. House Bill 2552, modeled after successful Main Street programs, would have created a B&O tax credit system to provide tourism sector businesses that donate to WTMA with a B&O tax credit equal to 50 percent of their donation. In total, the program could have raised $10 million annually. Neither long-term funding proposal moved forward during session. Nevertheless, discussions on long-term tourism funding have become increasingly substantive, and we have commitments from the “Four Corners,” (e.g. from senators and representatives, Republicans and Democrats) to work with us in advance of the 2017 legislative session. Meetings are underway, and we are optimistic that we will reach agreement on a solution.

Golf FORE! Education Sept. 20, 2016

A fun way to support the industry

Golf FORE! Education supports ProStart, the WRA Education Foundation’s culinary arts program that trains our future hospitality work force. ProStart provides high school students with:  Culinary techniques to management skills  Utilizes an industry-driven curriculum that is a nationally accredited technical training program  Mentored by industry professionals to provide REAL life experiences that build practical skills and a foundation that will last a lifetime  The knowledge and skills needed for today’s demand for skilled employees Your involvement, support and generous donations has a huge impact on growing and developing the hospitality industry, your communities, and the potential of our upcoming workforce!

How you can support: Foursome & Hole Sponsor: $1,000 Single player: $150 Bring a foursome to play: $600 Sponsor a Hole: $600 Dinner/Awards/Auction: $50

Sept. 20, 2016

Washington National Golf Club 14330 SE Husky Way Auburn, WA 98092

The Search for a Minimum

Wage

Solution LEADING UP TO THE SESSION

Over the past two years, the WRA and WLA have advocated for a statewide solution to the minimum wage controversy and have encouraged the governor and Legislature to take the lead in developing a compromise between business and labor. Our position has been guided by experience working on the issue in Seattle, Tacoma and Spokane and the fact that a number of other municipalities are also considering adoption of unique minimum wage and paid sick leave benefits. Reaching a statewide solution, including a compromise on the minimum wage issue, is preferable to the current trend of individual cities adopting unique wage and paid leave ordinances. City-by-city wage and benefit regulations create a confusing, and complicated, patchwork of standards for businesses. Today, there are five different minimum wages in Washington state (Seattle large business, Seattle small business, SeaTac, Tacoma and the state minimum wage). Additionally, there are three paid sick leave requirements (Seattle, Tacoma and Spokane). One can imagine how much more complicated the state will become if this trend continues. Last year in Tacoma, the WRA and WLA succeeded in securing the passage of a phased-in $12 minimum wage voter initiative by an overwhelming 71 percent vote. This compromise initiative was advanced as an alternative to a ballot measure, which would have imposed a $15 minimum wage. Following the vote, Tacoma Mayor Marilyn Strickland and Spokane Mayor David Condon joined the associations is urging the governor and Legislature to take action at the 18 │ warestaurant.org

state level to address the push for a higher minimum wage and mandatory paid sick leave benefits. A continuing source of frustration has been the ongoing opposition of many sectors of the business community to any wage solution whatsoever. Most business associations believe that the appropriate approach and strategy is to simply say “no.” Notably, the Association of Washington Business remained a constructive and active partner in our efforts to resolve the issue. In fact, AWB held a special session on minimum wage at its annual policy summit, which assisted in elevating the issue beyond the hospitality sector. AWB also partnered with the WRA and WLA in gathering public opinion data. In fall 2015, the WRA/WLA government affairs team met with Gov. Inslee and his senior team on a number of occasions to encourage his engagement in bringing parties together to develop a statewide solution.

IN SESSION

On Day One of the session, the labor-led coalition Raise Up Washington filed an initiative (now titled I-1433) that would: • Phase in an increase in the minimum wage to $13.50 per hour over four years. • Require all employers to provide paid sick leave benefits. The initiative would require: • Paid leave benefits accrued at the rate of one hour per every 40 hours worked. • Ability to use benefits after 90 days of employment. • Carryover of up to 40 hours of unused paid leave benefits into a subsequent year. • No provision for “cashing out” unused paid leave benefits.

There

are

now five

different wages in

minimum

Washington state.

The filing of the initiative created challenges for efforts to find a legislative solution. In the House, the Democratic caucus opted to simply defer to the initiative and did not hold hearings, collect input or consider any options for addressing the issue. The House Democrats’ position was that they had sent a solution to the Senate the previous year, and because the Senate failed to respond the issue would now simply go to the voters. In contrast, Senate Labor & Commerce Committee Chair Michael Baumgartner, R-Spokane, who personally opposes an increase in the minimum wage, took a different approach. Sen. Baumgartner held a hearing on a compromise bill authored by Democrat Senators Steve Hobbs, D-Lake Stevens, and Mark Mullet, D-Issaquah. The Senate also held a hearing on a bill to preempt cities (but not counties) from adopting wage and benefit regulations. A modified version of the preemption legislation, which left the door open to a comprehensive solution to the minimum wage and paid sick leave, passed out of committee. The WRA and WLA welcomed Sen. Baumgartner and the Senate’s willingness to keep the issue alive during the session and to allow continued dialogue and debate, which continued until the last hours of the special session. Meanwhile, the WRA/WLA team opened up dialogue with Initiative 1433 proponents and offered suggestions for amending their initiative to eliminate ambiguity in its paid sick leave requirements and/or make changes that could have resulted in our support or neutrality. Unfortunately, the proponents opted to make no changes to their

initiative as originally filed. Discussions continued with the proponents, however, to explore the possibility of achieving a legislative compromise that would have eliminated the need for an expensive and unpredictable initiative process. Twice it appeared that a compromise was achievable, but then fell apart. Discussions ended with the end of the special session. On March 8, the WRA filed an alternative minimum wage initiative, now titled I-1518. The initiative would: • Phase in an increase in the minimum wage to $12 per hour over four years. • Require employers to provide paid sick leave benefits, modeled after the compromises reached in Tacoma and Spokane. Under the initiative: • Employees would accrue paid leave at one hour per 40 hours worked and be allowed to carryover up to 40 hours of unused leave in subsequent years. • Use of paid leave benefits would be capped at 24 hours in the first year of employment; in following years, the cap would increase to 40 hours. • Employers would have a number of commonsense options for meeting the paid leave requirements. The WRA/WLA team fended off a number of challenges to I-1518’s ballot title assigned by the Attorney General’s Office. As we go to press, it is still unclear if either initiative will qualify for the November ballot.

July 2016 │ 19

2016

Elections

Election Day 2016 is shaping up to be one of the most interesting, and important, elections in years. As we go to press, the media and the country have been mesmerized by the emergence of Donald Trump and Hillary Clinton as their party’s presumptive nominees for president. One of the big unknowns is how these two polarizing candidates will impact the tone and tenor of state and local races in the fall.

STATEWIDE OFFICES

Here in Washington, the importance of this election year goes well beyond the race for president. We face the possibility of significant change given the nearly even party split in the Legislature and the unusual number of open statewide offices. Here is a short summary of what is in store:

Auditor – First-term Auditor Troy Kelly has been embroiled in legal controversy related to the business he ran prior to entering public service. The controversy led leaders on both sides of the aisle, including Gov. Inslee, to call for his resignation. Kelly refused to resign, but he is not seeking re-election.

United States Senate – Long-time U.S. Sen. Patty Murray is running for her sixth term. A total of 16 other candidates have filed for office, including three Democrats and four Republicans. Former Washington State Republican Party Chair Chris Vance is expected to be her challenger on the November ballot. U.S. House of Representatives – Every member of the U.S. House is up for election. At this time, incumbents in Washington’s congressional delegation appear to be solidly positioned to win re-election. In Seattle, however, Rep. Jim McDermott’s decision not to run after decades of service has opened up a spirited race with nine candidates vying to represent the 7th Congressional District. Governorship – Democratic Gov. Jay Inslee, running for his second term, is expected to face his strongest challenge from Republican Bill Bryant, a former Port of Seattle Commissioner. Earlier in the year, there was speculation that current Senate Ways and Means Chair Andy Hill, R-Redmond, would enter the race. With Sen. Hill’s decision not to run, it is expected that Bryant will be Gov. Inslee’s opponent in the general election.

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Statewide elected officials play a vital role in policy formulation, regulation and enforcement, and all positions are up for election. In recent elections, there has been little change in these offices. This year, however, all but two are being vacated by longtime incumbents. Attorney General – First-term incumbent Bob Ferguson is seeking re-election. Lieutenant Governor – Brad Owens, who has served in this important office since 1997, is not seeking re-election. The lieutenant governor plays a crucial role as president of the Senate, fulfills gubernatorial duties in the absence of the governor and often acts as an ambassador for the state, both domestically and internationally.

Treasurer – Incumbent Jim McIntire opted to not seek re-election, opening up this important office. The treasurer handles all fiscal matters for the state, including securing bond financing for transportation and other long-term infrastructure projects. Superintendent of Public Instruction – Incumbent Randy Dorn is not running for another term. State Rep. Chris Reykdahl, D-Tumwater, is one of many candidates seeking this position. Insurance Commissioner – Longtime incumbent and former Congressman Mike Kreidler is seeking re-election. Commissioner of Public Lands – This elected official oversees the management of all state trust lands and aquatic lands and is responsible for regulating forest practices and aquatic resources. Two-term incumbent Peter Goldmark, who was expected to easily win re-election, unexpectedly announced he will not seek a third term, opening this important position.

INITIATIVES

LEGISLATURE

Often lost in the noise surrounding the presidential, congressional and statewide races are the critically important races for the State Legislature. The 2017 Legislature must address the remaining funding challenges created by the Supreme Court’s order to dramatically increase funding for K-12 education by 2018. Although there has been substantial progress in recent budgets to fill the education funding gap, the 2017 session must address the final, major funding elements. The outcome of the election will determine which of two principals will guide how the funding issue is addressed: a) Fill the funding gap by prioritizing current state spending and bolstering state revenue by increasing economic activity in the state; or b) Fill the gap by increasing taxes and/or fees on both individuals and businesses.

HOUSE OF REPRESENTATIVES

Democrats have a razor-thin, one-seat margin in the House of Representatives. With every member of the House up for re-election, we see a very lively and competitive field of candidates in districts with open seats or vulnerable incumbents.

STATE SENATE

For the past four years, the Senate has been led by the Majority Coalition Caucus, a unique combination of Republicans and Democrats. The MCC currently has a three-seat margin in the Senate, but half of the Senate is up for election this year and a handful of the seats are being contested in what are expected to be very competitive races.

AT THE LOCAL LEVEL

Finally, some of the most important electoral decisions for hospitality businesses will be made at the local level. While local elections typically are more prominent in non-presidential year elections, there are races this year in many parts of the state for city and county officials. Local initiatives that could impact hospitality, such as the Seattle hotel initiative (see page 7), are expected to make it to the November ballot, and local taxing measures will go before voters in November.

Washington is one of a handful of states that allows for citizens to enact legislation by going directly to voters through the initiative process. In recent years, Washingtonians have seen an increasing number of initiatives on the ballot. This trend is a reflection of some groups’ ability to raise large amounts of money to fund signature gathering, supporting a veritable signature-gathering industry that operates between California, Oregon and Washington. It also reflects frustration with addressing issues in the Legislature and/or through local governments. This year, 137 statewide initiatives were filed, and proponents have until July 7 to submit the required 246,000 plus valid voter signatures to qualify their initiatives for the November ballot. Here are some that have either already qualified or are in signature gathering as we go to press: • I-1433 – would increase the state minimum wage to $13.50 per hour over four years and require employers to provide paid sick leave benefits to their employees. • I-1464 – would completely transform Washington’s campaign funding laws by imposing very tight limits on lobbying firms, businesses and organizations that engage in campaigns; establishing public campaign financing; and imposing a new tax to fund campaigns. • I-732 - would impose new taxes on carbon emissions and “offset” those tax increases with some reductions in state sales taxes. I-732 was an initiative to the Legislature in 2016, and will be on the ballot because the Legislature failed to adopt it. Signature campaigns are also underway for gun control measures and gender issues.

Look for WRA & WLA 2016 Candidate Endorsements at www.warestaurant.org/2016endorsements

July 2016 │ 21

HEROES TO OUR INDUSTRY At the end of each legislative session, we recognize lawmakers who are true champions of our industry’s priorities. These legislators work hard to understand the unique challenges facing our industry. They educate their caucuses and advocate on topics of particular significance for the hospitality industry. We applaud and thank each of our heroes for their tireless work on our behalf.

Sen. Mark Mullet, D-Issaquah

Sen. Mark Mullet has done so much for our industry that he is one of our legislative heroes for the third year in a row. This year, he again championed our effort to remove the 17 percent retail fee on spirits purchases. Despite a continual push in the Legislature to thwart our efforts to remove this unfair fee, Sen. Mullet represented our interests. He also sponsored and introduced a bill authorizing credit terms for our industry on alcohol purchases. As a WRA member and restaurateur who owns and operates two restaurant businesses, he knows firsthand the issues that impact our industry. His pizza business in Issaquah was uniquely impacted by the Liquor Control Board’s decision to impose an extra fee on restaurant purchases of spirits from retailers. Sen. Mullet is such a strong advocate on this issue that he has battled his own caucus leadership to support onpremises licensees across the state. In addition, Sen. Mullet continues to advocate for a statewide minimum wage solution done the right way. Sen. Mullet never wavers in his support of commonsense solutions for small businesses across the state, despite pressures from across the aisle and within his own caucus. We’ve made progress on numerous issues thanks to Sen. Mullet’s dedication and leadership.

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Sen. Mark Schoesler, R-Ritzville

Sen. Mark Schoesler has a long history of supporting our industry and the business community in Washington state. While he has been honored as a legislative hero in the past, he remains a cornerstone of our success with the Legislature. First elected in 1993, he has spent his entire legislative career representing the interests of businesses across the state and ensuring that the eastern side of the state is represented in statewide policy. He is respected within his own caucus, as well as across the aisle and within state offices, all of which makes him a strong leader. As the Senate majority leader, Sen. Schoesler’s steady hand has kept the Majority Coalition Caucus intact. The MCC is a main reason why many harmful bills introduced year after year continue to be thwarted each session. Sen. Schoesler has protected and supported the business community and our industry from the largest tax increase ever proposed on state businesses. In addition to his long history of backing our causes, he is always willing to listen to new perspectives on issues and takes these views into account before making tough decisions. His leadership in the Senate has shaped policy discussions for the better across the state.

Rep. Larry Springer, D-Kirkland

Rep. Larry Springer is a former restaurateur who now owns a wine shop in Kirkland. Rep. Springer understands our unique industry and has been a strong advocate for small business issues. He has sponsored a critical bill to remove the 17 percent fee on restaurant purchase of spirits from a retailer. He has fought opposition to ensure accurate information was given to his caucus, making sure his colleagues were educated on the impacts of the fee. As deputy majority leader, Rep. Springer is his caucus’ liaison to the business community and is a critical and well-respected voice within his own caucus who brings balance to many important issues. Rep. Springer was also instrumental this year in making sure our industry’s concerns on minimum wage were communicated to his caucus leadership.

Rep. Dan Dan Kristiansen, Kristiansen, R-Snohomish R-Snohomish Rep. Rep. Dan Kristiansen, leader of the House Republican Caucus, has served in the House of Representatives since 2003 and is the leader of the House Republican Caucus. He is also a small business owner and has fought determinedly on issues important to small business and the hospitality industry. Rep. Kristiansen was also key in the negotiation of the two-year operating budget in 2015 and of this year’s supplemental operating budget. The House and Senate budgets were initially far apart, and compromise was hard to achieve. Rep. Kristiansen is a legislative hero for the second year in a row because of his work on finding a budget agreement.

He is a champion of our industry within his caucus and across party lines. Rep. Springer has our gratitude and admiration for all his hard work to ensure the voices of small business and our industry are heard.

Photos courtesy of Washington State Legislative Support Services. July 2016 │ 23

Understanding the

Overtime By Marney Zellers, CHAE

As most employers now know, the U.S. Department of Labor (DOL) recently issued new overtime rules, significantly increasing the overtime pay exemption threshold. The changes, expected to affect more than four million employees nationwide, include: An increase in the annual salary threshold to $47,476 a year from $23,660, or weekly salary threshold from $455 to $913. An automatic update to the salary threshold every three years. It is estimated that the minimum salary threshold will rise to $51,000 at the first adjustment on Jan. 1, 2020. An increase in the “highly compensated employee” threshold from $100,000 to $134,004. The ability to use nondiscretionary bonuses and commissions toward up to 10 percent of the salary threshold.

No changes were made to the existing primary duties criteria for “white-collar” exemptions. These are for employees whose “primary duty” (the principal, main, major or most important duty the employee performs) falls within the professional, executive, administrative, outside sales or computer category. In hospitality, overtime-exempt employees are often managers and most likely fall under the “executive” classification, meaning their primary duty is managing the business or a department. To be considered an executive position, they must manage at least two full-time employees, as well as have direct authority or explicit influence in hiring, promoting or firing other employees. Various hotel managers, however, may fall under the “administrative” overtime-exempt classification. In this case,

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their primary duty is non-manual office work related to the management of the business or its employees and must include exercising discretion and independent judgment with regard to important business decisions. Another overtime exemption exists for retail and service employees whose pay is at least 50 percent commission. The total compensation of these employees must exceed 1.5 times the applicable minimum wage per hour worked in a workweek in which overtime hours are worked. Hotel sales and catering sales managers may be overtime-exempt under this provision. Some chefs and culinary management may be classified as “creative professionals” whose primary duties are that of creativity, imagination or talent in an artistic endeavor. In either case, these employees are only exempt from overtime if these duties can be considered the primary duty of their position. Planning for Changes If your business currently has salaried employees whose salaries are under the weekly or annual threshold, and you determine they work more than 40 hours per week, you will need to decide how to remedy the situation. Possible solutions include increasing salaries, reclassifying these employees from salaried to hourly or leaving salaries the same, requiring managers to clock in and out and paying for any overtime incurred. Some employers may opt to reduce base salary or wage rates in order to accommodate overtime. Make sure to consider all aspects of each solution, including the impact on employee morale, before deciding. While analyzing current salaried positions, take time to make sure overtime-exempt, salaried employees also meet the “primary duties” requirements set forth in the FLSA. You may want to reevaluate compensation structures, reclassify and/or revise job descriptions based on what you discover. If you are going to allow overtime, plan for it. Build it into your labor budget, set associated hourly wages accordingly and have strict policies around who is allowed to work overtime and how many overtime hours are allowed.

New Federal

Rules

This is also the ideal time to evaluate your timekeeping technology. Is it time for an upgrade? Are there any “automatic settings,” such as automatic breaks or rounding up, which may be inaccurately measuring employee time? Acute measurement of overtime will help you manage costs and assessing how your technology is configured can ensure you are in compliance FLSA rules. Educate and Communicate With Your Employees The best way to manage change and to help your employees adapt to change is through education and communication. Make sure your employees understand (and know that YOU understand) all aspects of the overtime rules. Taking time to do this can avoid misunderstandings and misconceptions about the rules and how you are implementing them. Washington state only requires employees be notified of changes in agreed wages in advance of their effective date. In other words, the date the employee begins performing work at new agreed wage). However, giving employees ample time to fully grasp plans for changes in pay structure can lead to a smoother transition. If you have salaried employees who will now become hourly, it is vital you communicate that this change in compensation structure does not mean a demotion of role or status. Communicating this to your entire team is important so the authority and position of hourly rate managers is affirmed to both the staff and managers. Ultimately, the way you communicate your solutions sends a message to your employees about what kind of employer you are. Honest conversations and education about the updated FLSA rules can bring about positive, creative and effective solutions that your whole team can embrace. The information and suggestions made in this article are not intended as legal advice. Please consult your employment attorney regarding the DOL rules change and their application to your specific business situation. Marney Zellers is a certified hospitality accountant executive and an advisory manager in the hospitality group at Peterson Sullivan Certified Public Accountants and Business Advisors. You can reach her at mzellers@pscpa.com.

Getting Ready for the

December 1

Compliance Deadline

Use this opportunity to evaluate all classifications.

Now is a good time to make sure that you can defend all employee classifications. Simply increasing an employee’s salary to meet the overtime threshold is not a good strategy if that employee’s primary duties are not exempt work. The change in the law provides a good opportunity to reclassify to ensure compliance with FLSA requirements.

Put clear timekeeping practices in place. Keeping track

Establish clear policies about working off-site. Checking email and

Be sure to calculate regular rate of pay correctly. In calculating

Communicate clearLY and positively. Reclassified employees will

of hours worked may be one of the biggest challenges for employees who are switched from exempt to nonexempt or hourly status. Use the time between now and the December 1 compliance deadline to get any formerly exempt employees used to recording all hours worked, including recording start and finish times as well as breaks. Employees can’t waive the right to overtime, and managers need to understand that an employee who simply stays late without recording that time is opening the door to litigation.

returning phone calls is on the clock for non-exempt salary employees and needs to be recorded. Checking in with the office while on vacation is also work. Some companies avoid the legal risk this can create with policies that prohibit any work while on sick leave or vacation time.

the rate of pay, do not forget to take applicable bonuses and commissions into account. You may also want to have your holiday pay policies evaluated from a legal perspective, as a recent federal court ruling in California treated holiday pay as an attendance bonus, which had to be included in the rate calculation.

want to know how the change impacts their professional status. It’s important to make it clear they are still valued as professionals and that opportunities within the company haven’t changed. Send a positive message to support your employees and protect your business culture.

July 2016 │ 25

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INDUSTRY CALENDAR

NEW HOSPITALITY MEMBERS

July/August Training

Best Western Plus Park Place, Chehalis

July 25

ServSafe® Manager, Kent

Bing Crosby Theatre, Spokane

Aug. 2

ServSafe® Manager, Seattle

Aug. 9

ServSafe® Manager, Kent

Aug. 11

ServSafe® Manager, Tumwater

Aug. 15

ServSafe® Manager, Everett

Aug. 18

ServSafe® Manager, Tacoma

Meetings July 12

Seattle Hotel Association Board Meeting

July 12

Spokane Chapter Board Meeting

July 19

Finance Committee Meeting

July 26

Joint Board Meeting

July 27

MSC Board Meeting

Aug. 2

HIHIT Board Meeting

Aug. 2

Executive Committee Monthly Meeting

Aug. 3

Seattle Chapter Monthly Meeting

Aug. 3

Retro Trustees Meeting

Aug. 9

Seattle Hotel Association Board Meeting

Events July 13 Sept. 20

Goodwill Education & Training Center – 2016 Hospitality Job Fair Golf FORE! Education

BowEdison, Bow Breakwater Restaurant, Clallam Bay Copine, Seattle Cowlitz River Lodge, Packwood Espresso Gone Crazy, Port Orchard Firehouse Subs, Lacey Fortune Casino, Bellevue Fortune Casino, Tukwila Galletti’s Spaghetti House, Long Beach Hotel Ruby, Spokane Kate Howell, Seattle La Conner Channel Lodge, La Conner La Conner Country Inn, La Conner La Quinta Inn – Lacey, Lacey Lefevre St. Bakery Café, Medical Lake LJ’s Bistro & Bar, Lake Stevens Montvale Hotel, Spokane Olive Branch Cafe and Tea Room, Tacoma Papa John’s Pizza, Spokane Resonate Brewery & Pizzeria, Bellevue

Golf FORE! Education

Sept. 20, 2016 Register at:

WRAEF.ORG/EVENT/GOLF

Ruby 2, Spokane Ruby Suites, Spokane Tapped Brew House & Pub, Camas The Coug, Pullman The Defiant Goldfish, Tacoma The Mule Tavern, Tacoma Thor Tavern, Bellingham Towneplace Suites Seattle S, Renton

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NEW ALLIED MEMBERS Anchor Brewing Company Erik Christiansen 1705 Mariposa Street San Francisco, CA 94107 2334 415.863.8350 echristiansen@anchorsf.com http://www.anchorbrewing.com Beer, craft brewery Fikes Northwest Rick Peterson 13401 E Trent Ave Spokane Valley, WA 99216 1267 509.926.0534 rick@fikesnorthwest.com www.fikesnorthwest.com Fikes Northwest is your premiere odor control, restroom sanitation and janitorial supply company. Locally owned and operated in the Spokane area for over thirty years and serving clients all over Eastern Washington. WRA/WLA member special offer: A minimum of 5% off our list prices Industry Matthew Cecil 1675 Regulus St San Diego, CA 92111 7129 323.746.3780 http://www.industry.co matthew@industry.co Industry is a professional network for the service and hospitality industry. Our team at industry helps service and hospitality professionals discover great jobs and network in the industry. Industry provides recruiting solutions to help restaurants, bars, nightclubs, and hotels post jobs, manage/track applicants, and onboard new employees all in one place.

HEALTHCARE SOLUTIONS

Are you lying awake at night wondering if you are compliant with all of the healthcare laws? Let the WRA help you sleep better! The Washington Restaurant Association has added “HEALTHCARE SOLUTIONS” to our program offerings. To find out what works best for your business, visit: wra.cc/hcsolutions to walk through our healthcare options for your business. Or, ask your broker. Don’t have a broker? Call or email and I will set you up with an expert in our industry!

Contact Stephanie Conway for more information at 360.581.5788 or email her at stephaniec@warestaurant.org.

Ask the Expert | Restaurant Profit Coach Reward Hustle and Effort to Increase Sales By Rick Braa, CHAE

We’ve seen an amazing number of restaurants open in the last three years. The constant allure of new restaurants has resulted in flat or declining sales and a less exciting restaurant experience than in years past. We’ve also suffered some staff turnover, and I feel like we’re starting over somewhat. While this is providing a new opportunity, I’m a little confused on where to focus. Can you provide some guidance?

Popular shows like “Restaurant Impossible” regularly show how quickly a restaurant can be turned around with the proper focus and attention. The core recipe is simple: Rework product, improve service, fix design and promote locally. This is also the formula used by major companies as they worked through the Great Recession with the benefit of an additional layer of great data and measurement.

Guests love great energy and reward it with return visits, better reviews and free word-of-mouth advertising.

This formula forces a restaurateur inward instead of outward, on fixing problems inside the four walls before reaching outside the four walls. The highest impact in the sequence is service. Consumers are five times more likely to return to a restaurant for the service than the food. The old phrase, “People come for the food and come back for the service” is true.

Take the time to map out potential 1-2-3 scoring and A-B-C performance for each employee. Insist that each person reaches maximum individual potential and performance. Once you’ve scored everyone, meet individually and reset expectations for the next level up and clarify what it means to perform at an “A” level. Discuss effort as the deciding factor between “A” performance and below. As a leader, success is determined by harvesting discretionary effort. By recognizing and rewarding effort, each team member will see his or her impact on every other team member and the restaurant as a whole.

While service to the guest is paramount, service to the restaurant carries heavier weight. Being a great co-worker and employee sets the business up for success and allows each player to perform at his or her highest level. Technical performance is a result of hustle and effort, and whenever these fall off, technical performance suffers. To ensure your team is reset with proper expectations, consider the following: Recognize and reward hustle. A person who hustles is one who owns the result of his or her work. What sets one person apart from another is the amount of discretionary effort that person is willing to give. The difference is “hustle.” Any person should be able to perform at the highest level, which includes knowing why-what-how-when to do tasks, intense focus, do-it-right-the-first-time precision and wicked speed. Hustle clears the way for all of these. The sooner a task is completed, the sooner a person one level up can do his or her work and so on. Slowness or stretching work out leads to others not starting their work, slowing down the entire machine. Hustle also generates energy and buzz. 30 │ warestaurant.org

Recognize and reward effort. “Always do your best” sounds corny, but if each player does his or her best each day, individual performance skyrockets, co-workers perform better, and the guest believes the restaurant is a great place to be.

Recognize and reward those who “get it done.” Every business has those individuals who get things done without much direction. In a recent planning meeting, the GM of a restaurant said to his team, “Come on, you know there’s Emma and there’s the rest of us.” Heads nodded and people were inspired to be their best each day and to be the next one who “gets it done.” Take a lesson from those who have gone through tough times. Use the product-service-design-promotioninformation formula and reward those who hustle and make great effort. You’ll see sales and your bottom-line growing again. For a more information on improving profitability and driving performance, contact AMP Services at rbraa@ampservices.com. Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.

Orcas Island, WA

LOCATION:

18 Orcas Hill Road, Orcas, WA 98280 (Strategically located in Orcas Village within a few easy steps and overlooking the Orcas Island Ferry Landing)

SALES PRICE:

$1,795,000 (Includes Land, Building, & Business) Prefers Cashout (Possible Seller Financing for Credit Buyers)

YEAR BUILT:

1904 (Significantly Remodeled Over the Years)

LOT AREA:

23,522 Square Feet (.54 Acres) per San Juan County records

BUILDING SIZE:

11,001 SF (1st: 3,514 SF + 2nd: 2,900 SF + 3rd: 1,188 SF + Decks: 3,399 SF)

GROSS REVENUES:

$1,151,324 (2014) – (Approx. Café: 1/3 + Bistro: 1/3 + Hotel 1/3)

The Orcas Hotel is a charming Victorian-style Bed & Breakfast that first opened its doors to guests in 1904. Nestled in the heart of the San Juan Islands, it offers breath-taking views, delicious food and a lively atmosphere. Experience friendly service and the peaceful atmosphere of Orcas Island from the Inn’s premium accommodations of 12 spacious Guest Rooms with tasteful decor that can sleep up to 32 people. Revenues are shared evenly between the Orcas Café (breakfast & lunch); Octavia’s Bistro (dinner & lounge); and hotel accommodations. Receptions and parties can serve up to 150 guests – perfect for wedding packages. The strategic location is ideal for travelers by foot, bike, or car. Whale watching and kayak trips are all within walking distance. Please call for a tour.

Visit Website: www.orcashotel.com

P EIZER

COMMERCIAL REAL ESTATE, L.L.C.

MARK PEIZER

E RS E EV E! R E ID SE S

Principal • Broker • MBA