Blatant government regulation still proliferates

Nation's Restaurant News, August 18, 1986 by Charles Bernstein

Blatant government regulation still proliferates

Government regulation of the food-service industry has soared to a record level, much to the detriment of the industry and the economy. The trend marks one of the great ironies of the Reagan Administration, which had pledged to promote free enterprise and self-regulation, cut down the bureaucracy and curb the tendency to regulate everything.

Unfortunately, Congress is traveling in the opposite direction as fast as it can gain political advantages.

A prime example of government excess is the tax reform bill versions passed by the House and Senate that will, among other things, limit business meal and entertainment deductions to 80%. The chances of the House-Senate conference committee changing that provision in both versions are virtually nil.

But the situation could grow even worse if Congress also rejects 100% deductibility for on-premises meals served to restaurant employees.

Also uncertain is the fate of the Targeted Jobs Tax Credit program, which has offered federal wage subsidies to restaurant employers and other employers of handicapped or disadvantaged workers.

The industry must now contend with more regulations than it can count. One of the most reprehensible is proposed Congressional legislation that would force all "fast feeders' to print ingredients on packaged menu items. Not only is that impractical and unnecessary, but the government's definition of a fast feeder as any franchisor with at least 10 units is blatantly wrong and discriminatory. (Prodded by consumer groups and threatened legislation, some of the major fast-food chains--most notably McDonald's--have already agreed to ingredient labeling in certain instances.)

At the same time the House has passed a bill barring food-service operators and other employers from using polygraph or lie detector tests in pre-employment screening. If the Senate concurs, we will be witnessing another case of the government's regulating an area best left to the free marketplace --employers, employees and consumers alike.

A person is presumed innocent unless proven guilty under the U.S. judicial system and tradition. Right? Wrong, at least not in the case of restaurant owners who hire "illegal' aliens. The Senate has passed and sent to the House a bill that would impose severe penalties--even jail sentences--on owners of restaurants where any "illegal' aliens were found to be employed.

A presumption of guilt would apply unless an owner could irrefutably prove through records that he had absolutely no knowledge that the affected employees were "illegal' aliens. That would not be a happy situation for anyone, and it would cut off a major source of labor.

As if to play "Can You Top This,' the U.S. Agriculture Department is establishing new regulations requiring that food-service chain central kitchens that prepare foods hot must deliver and serve them hot at each restaurant and keep the same consistency with foods prepared cold.

Not all federal regulation is "bad' per se, and the government cannot adbicate its responsibility for the public welfare. Congress is considering reform bills to limit the extreme liabilities faced by food-service operators serving liquor, and it might set limits on the excessive insurance liability awards in general, which have resulted in horrendous premiums.

Certainly, government can be a friend. But the industry is far better off if it polices itself and seizes the initiative before Congress or an agency even gets a chance to step in with regulations. Most food-service operators apparently had already taken it upon themselves to make sure there were no sulfites in the ingredients, before the Food and Drug Administration's recent outlawing of sulfites in salad bar ingredients, such as fresh vegetables and fruits.

Constructive positive action by the industry to please consumers and please itself is the most effective weapon. The less government regulation there is, the better it is for the entire food-service industry and the free-enterprise system.