Hospitality group launches campaign to oppose new regulations for Minneapolis businesses

A group representing Minneapolis restaurants has launched an ad campaign opposing potential new business regulations — even though no such proposals have been introduced at City Hall.

The Save Local Restaurants campaign, organized by two national groups — the National Restaurant Association and the International Franchise Association — and led locally by Hospitality Minnesota, involves a blitz of digital ads and billboards across the city. The group's concern: the creation of a new Labor Standards Board, which would drive policy discussions around labor policies for all industries.

The idea was first floated in the summer of 2022 and backed by labor unions and a majority of council members at the time. Although no formal proposal has been made, some in the hospitality industry say it's clear the idea is gathering traction, and they are worried.

"I don't think enough people understand or realize that this is happening, or the impact that this may have for not only hospitality, but retail and other industries as well," said David Benowitz, president of Craft and Crew Hospitality, who added that Mayor Jacob Frey recently told him the city was certain to set up such a board, and could begin the process as soon as February.

Frey spokeswoman Ally Peters confirmed that such work is in progress and that some council members would be interested in introducing it.

"The mayor has been working for months to convene the right coalition of stakeholders — those who understand issues important to workers and businesses — to advise the City, the mayor and other policymakers on identifying areas of focus for policymaking and vetting of policy," she said.

But how quickly that group might be formed and how it would differ from existing city structures governing labor rules has not yet been laid out in ordinance.

When the idea for the Labor Standards Board was introduced, a report by labor organizations, including the Unite Here hospitality union and Restaurant Opportunities Center, defined it as a policy body made of employers, employees and members of the public. The group would be able to convene additional boards specific to certain industries to investigate specific issues and recommend policy fixes.

The mayor, 10 council members and labor representatives rallied on the steps of City Hall in June 2022 to support the idea. Labor organizations gathered last fall to pressure the city to pass it before the end of 2023.

But some in the hospitality industry say they're not sure what problem a Labor Standards Board would be intended to solve.

"Here in Minneapolis, we already have considerable employee protection laws on the books. Shouldn't we be focused on enforcing those or more directly creating new ones if absolutely needed?" asks a form letter from Save Local Restaurants.

The city already has a Labor Standards Enforcement Division, which falls under the Civil Rights Department and employs inspectors who investigate and enforce complaints of labor law violations. Staff from the division likely would staff the Labor Standards Board, Peters said.

Minneapolis also already has a 16-member Workplace Advisory Committee that discusses local economic trends and recommends new workplace regulations. If that sounds more or less like what the Labor Standards Board would do, that's because the Labor Standards Board is meant to replace the Workplace Advisory Committee, Peters said.

The Workplace Advisory Committee has long struggled with low attendance and lack of participation from business interests in particular. Currently, six out of 16 seats are reserved for industry while eight are for labor, leading to feelings that it is futile to participate on an imbalanced committee. Two of the seats for business representatives are vacant, further diluting the business voice.

Peters said that while the mayor's office is still working out the exact makeup of seats on the new board, the intention is for workers and businesses to have an equal voice at the table. The appointed board would only have the power to make recommendations; final decisions would be made by the mayor and council.

Brian Elliott, executive director of SEIU Minnesota, credited the Workplace Advisory Committee with passing citywide labor standards such as minimum wage increases and protections for freelance workers.

He said the Labor Standards Board makes sense as its next evolution because Minneapolis is now at the point where regulators need to dig into specific industries to ensure those standards are working for workers.

"We see it as actually a way in which to revitalize employment in the city and be in a competitive advantage within the city as all industries are looking to recruit more workers," Elliott said.

But Jill Sims of Hospitality Minnesota said her group is concerned the new board would create one-size-fits all policies and potentially further stress small business operators already contending with a new metro sales tax and new retail delivery fee, managing HR and communicating with the health inspector.

"When you're looking at putting more on the plate of operators, it can be really challenging, and they will have to make tough decisions," Sims said. "We want to be encouraging our businesses to grow and expand and come to Minneapolis."

Other industry groups, including the Downtown Council, have not formed their positions.

Tim Murray of Murray's Steakhouse and Arturo's Pizza said he's keeping an open mind about the Labor Standards Board but questions how it might set new wage standards that are now dictated by the market. Ever since the pandemic shut down restaurants and workers left for other industries, there's been a staffing shortage that requires him to pay non-tipped workers well above minimum wage to avoid losing them, he said.

"People have to pay whatever the market requires today for employees," Murray said. "And whether there's a contract in place or not, you still have to pay whatever is gonna get people to work at your place."