How the New Stimulus Plan May Help the Restaurant Industry and Its Employees

The $2 trillion stimulus plan has arrived but how will it help millions of the worst hit hard-working Americans such as those in the restaurant industry? The relief bill aims to put much-needed money in the pockets of workers like servers, cooks, bussers and bartenders that are out of work due to the recent closings of restaurants nationwide. With more than 3 million workers applying for unemployment benefits just last week alone, this plan aims to ease some of the looming stressors we are currently facing as a nation. Here’s what you should know:

Which restaurant industry employees will benefit from this relief bill?

Employees that report earning up to $75,000 individually will be eligible to receive stimulus checks for up to $1,200 checks and those who file jointly and report earning up to $150,000 combined could get up to $2,400. It is important to note that the amount of the stimulus checks will decrease as the reported income surpasses the $75,000 mark and phases out completely at the $99,000 mark individual reporters and at $198,000 for joint filers. Employees with children will be able to receive an extra $500 per child.

If you’re not a legal citizen, are you still eligible for a stimulus check?

Although the stimulus plan states that it does not apply to “non-resident alien individuals,” or those who haven’t had a stateside presence for the last three years, the IRS website suggests that if you’ve been paying your taxes for the last three years you could be eligible to be treated as resident alien for tax purposes and therefore potentially eligible for stimulus checks. However, if you are an undocumented individual in New York, you would not qualify for unemployment benefits.

How does this bill affect those on unemployment?

This relief package should allow eligible employees to earn their full salary on a stimulus check while still collecting unemployment. Due to the new Federal Pandemic Unemployment Compensation under the bill (applicable until the end of July), there will be supplemental payments of up to $600 per week. With the average restaurant industry worker receiving about $381 per week on unemployment, they would now be able to collect about $981 per week on unemployment alone. Additionally, employees will be able to extend their unemployment benefits from the usual 26 weeks to 39 weeks if they can show they are unable to work because the closure of their place of employment is coronavirus related. If an employee is already collecting unemployment, there are no additional steps or re-filings that need to take place on their part in order to start receiving the supplemental $600 unemployment payments. 

Will self-employed, 1099 gig workers, such as delivery drivers be able to benefit from the stimulus?

Self-employed workers, such as drivers for Uber Eats, should be eligible to receive a stimulus check granted they meet the income requirements. They will also be able to collect their additional $600 in unemployment and extend their unemployment benefits to 39 weeks as well. There are some great wins in this stimulus plan for employees and businesses alike but unfortunately, the bill may still leave many restaurant industry workers ineligible to collect benefits. Undocumented workers which play a critical role in the industry as well fine dining employees who earned more than $100,000 in their 2019 or 2018 tax returns may be excluded. As laws during this unprecedented time continue to unfold, it is important to stay in know regarding your rights as an employee. Fitapelli & Schaffer continues to offer free and confidential consultations over the phone and will be posting regularly to keep you updated on the latest information. Feel free to reach us at (212) 300-0375 or visit our website for additional information.