COVID Relief for Restaurants: Tracking RESTAURANTS & HEROES Act Updates

Back of House Staff | November 19, 2020, 01:51 PM CST

COVID Relief for Restaurants: Tracking RESTAURANTS & HEROES Act Updates

If you’re a restaurant operator who needs economic relief to keep your business afloat due to the coronavirus pandemic, the good news is that there’s still a possibility of assistance from the federal government. But tracking the status of the RESTAURANTS Act and HEROES Act isn't easy when you're preparing your actual restaurant for what's already shaping up to be a winter of big COVID-19 spikes.

That's where we come in. We've broken down the key facts you need to know about the coronavirus relief measures making their way through the U.S. federal legislature, and will be updating this article with new developments as they become available. So stay safe—and stay tuned.

>>>RELATED: An Updated State-by-State Guide to COVID 19 Restaurant Rules

What is in the stimulus bill Congress passed in December 2020?

On December 21st, both the U.S. House of Representatives and the U.S. Senate passed a $900 billion COVID-19 relief bill. That bill, along with one that will fund the government through September 2021, now head to President Donald Trump's desk to be signed into law.

Here are more notes on what this $900B package contains:

  • $300 per week additional unemployment assistance for up to 11 additional weeks
  • $600 direct payments to individuals (this amount start to decrease for earners >$75K in annual income); $600 for each child / dependent
  • $284B extension to the PPP loan program (same general terms and qualifications as in the CARES Act)
  • $15B in dedicated funding for “live venues, independent movie theaters, and cultural institutions”
  • $25B in rental assistance and an eviction moratorium extension (this seems to be new - trying to figure out if this applies to restaurants and small businesses or if this only applies to individuals)
  • $82B for educational providers (i.e., schools and colleges) to reopen classrooms safely
  • $10B to help with child care assistance
  • $13B to SNAP benefits
  • $7B to increase broadband access to the internet (i.e., remote work assistance)
  • $4B+ to public transit (majority going to New York City MTA)
  • “Funding totaling in the billions of dollars to support vaccine distribution, healthcare workers, and testing and contact tracing efforts”
  • A tax credit for employers offering paid sick leave

How will the new COVID-19 stimulus package help restaurants?

For restaurant operators, this bill offers some indirect relief, but falls far short of previous proposed packages, such as the HEROES Act 2.0, which included $120B in relief specifically for the hospitality industry via the RESTAURANTS Act. That passed the U.S. House of Representatives in October, but to become a law, that act would have needed the support of a the Republican-majority Senate, which it never received.

For operators, this bill offers some additional relief in the form of more Paycheck Protection Program funding, but because these loans are attached not to revenues but instead to payrolls, they were not particularly effective in buoying restaurants. Reported Ryan Sutton for Eater:

The good news is that if you can’t hire back folks because they don’t want to work, or if you can prove that you had to reduce staffing because of government-ordered closures, your loans will still convert into grants. So if you play your cards right, this program should help your business stay afloat for an extra month or two, something that has benefited scores of small bars and restaurants. Then again, you’ll still need to find a way to spend 60 percent of any funds on your (now smaller) staff.

What are the HEROES and RESTAURANTS Acts?

The HEROES Act is the U.S. House of Representatives' omnibus proposal for stimulus relief to offset the economic damage wrought by the coronavirus pandemic. HEROES stands for "Health and Economic Recovery Omnibus Emergency Solutions." There are two versions of the HEROES Act; version 1.0 is a $3.4 trillion package, while version 2.0 is a pared-back $2.2 trillion package.

The RESTAURANTS Act is an earmark within HEROES Act 2.0 that would designate economic relief funds for restaurants. RESTAURANTS stands for "Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive." The provision would grant $120 billion to bring relief specifically to the restaurant industry.

Is the RESTAURANTS Act dead? Short answer: maybe, maybe not. "It’s worth noting that the $120 billion RESTAURANTS plan, which is more tuned to the needs of the hospitality industry, could be reconsidered when President-elect Joe Biden introduces his own stimulus plan next year," continued Sutton, "but that time frame, alas, won’t work for the thousands of establishments that could close between now and then."

How has federal coronavirus relief progressed so far?

How did we get here? Good question. In April, the Democrat-controlled House of Representatives passed the $3.4 trillion HEROES Act, which would have offered relief for restaurants and other small businesses. The House also passed another round of $1,200 stimulus checks, pay raises for frontline workers, and continued $600-a-week unemployment benefits through January 2021.

Those pandemic response measures were considered by some Republicans an "unserious liberal wishlist" that promised too much. The small business aid floundered in the Senate.

In September, House Democrats presented their second attempt at a coronavirus relief act, this time with a reduced price tag of $2.2 trillion. Part of this second HEROES Act is extremely relevant to our interests: This new HEROES Act has earmarked $120 billion in grants intended to bring relief specifically to the restaurant industry. Named the "Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive" Act (aka the RESTAURANTS Act), this is intended to provide financial assistance for, you guessed it, bars and restaurants.

Here's the good news: For once, it seems like Washington is listening. This spring, small business owners struggled to get by and pushed back on lawmakers as large corporations snapped up millions of dollars' worth of Paycheck Protection Program loans, intended for small businesses, that corporations such as Chipotle wound up receiving instead. The big difference between this new RESTAURANTS Act and the PPP loans from the spring is that the new act has been designed specifically and exclusively to help locally-owned restaurants, not mammoth chains. The funds can only be accessed by restaurants with fewer than 20 locations.

Just as importantly, the act also focuses on communities that are especially vulnerable in this moment. For the first 14 days, it will “prioritize awarding grants to marginalized and underrepresented communities, with a focus on women- and minority-owned, and women- and minority-operated eligible entities." Additionally, restaurants that make over $1.5 million annually are not eligible for those first couple of weeks (which makes a whole bunch of sense, too.)

The act can't come a moment too soon—as of September, more than 100,000 restaurants closed nationwide over the six months prior. The Independent Restaurant Coalition declared in September: "Congress must quickly pass this COVID-19 relief proposal and give America's 500,000 independent restaurants a fighting chance to survive."

Though the HEROES Act 2.0 passed the House in October, the Republican-majority Senate, which tends to favor cutting relief plans, never took it up, instead opting to push ahead with a $900B stimulus package that excluded the RESTAURANTS Act framework. That bill passed both chambers of Congress in late December.

[Photo by Joshua Sukoff on Unsplash]

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