Capitol Hill Asked Not To Expand Disabilities Act

WASHINGTON, D.C. – Franchise owners are facing two challenges from the federal government in its attempts to broaden the disabilities act to accomodate more people. Franchise owners, franchisors and their associations are up in arms. In a one-two punch to small businesses, while the Justice Department issued a thousand-page proposal of new regulations, the U.S. House of Representatives on June 25 overwhelmingly approved the revision of the Americans with Disabilities Act (ADA) of 1990 by 402 to 17, reversing earlier Supreme Court decisions that had narrowed the scope of the act.

The Asian American Hotel Owners Association, some 8,700 hotel and franchise owners who own about 22,000 hotels, met at a Department of Justice public hearing on July 15 to voice concerns over a major expansion of the Americans with Disabilities Act. The Department of Justice (DOJ) recently published a thousand-page ADA regulation update to require buildings and places of public accommodation to be more accessible to the disabled.

The Justice Department's proposed ADA regulations focuses solely on making buildings and places of public accommodation accessible to the disabled. One particularly prickly proposal is a requirement that in order to qualify for the small business safe harbor, small businesses produce financial records to prove that a designated percentage of gross revenues are spent on ADA compliance issues.

“Pursuant to this safe harbor, a qualified small business would have met its readily achievable barrier removal obligations for a given year if, in the preceding tax year, it spent at least one percent (1%) of its gross revenues on barrier removal.” – DOJ Notice of Proposed Rulemaking to Amend 28 CFR Part 36: Public Accommodations and in Commercial Facilities

C.K. Patel, Secretary for AAHOA, states, "Increasing costs by one percent of revenue is a lot of money for a small business owner.”

AAHOA President Fred Schwartz agrees. “The proposed ADA regulations will force members to spend millions of dollars to make changes to their hotels that may not provide any recognized benefits or even go unused," he declares. "We are working closely with the DOJ and other members of the small business community to ensure that our concerns are heard, and our members’ interests are protected in future years.”

However, Jason Straczewski, director of government relations at the International Franchise Association, thinks that this compromise may be better than the alternative. “We give the Department of Justice an A for effort," states Straczewski. "We are glad the DOJ is thinking outside the box when it comes to small franchise businesses complying with federal regulation." But he also warns, “The jury is still out [in regards to the proposal]. An organization’s profits can ebb and flow with the economy, and most small businesses want to make sure they are paying debt and payroll every month.”

AAHOA, the largest group of hotel owners and hotel franchisees in the United States, is not so supportive. The organization anticipates that the proposals will be be very burdensome to hotel owners—from the need to change hotel fitness centers to having to accept service animals as well as many other proposals that will place hotels in an awkward position with guests and meeting franchisor standards.

C.K. Patel observes, “Who wouldn’t want to help the disabled? However, these thousand pages of regulatory changes are far more burdensome on small business owners while being profitable for attorneys.”

According to the Department of Justice's own analysis, the proposed changes are expected to cost establishments some $22.8 billion.

The Department of Justice will allow for public comments to be submitted until August 18.

House Overwhelmingly Approves Revised ADA Act

Sponsored by Rep. Steny Hoyer (D-MD), the ADA Restoration Act of 2007 considerably broadens the original disabilities act to include someone as physically or mentally impaired if the person's condition "materially restricts" a major life activity.

This bill in Congress is different than the Department of Justice's proposition. It addresses how disabled employees should be treated in the workplace, and the reasonable accommodations that employers must make so their disabled employees can perform their jobs.

In what may be resignation of a fait accompli, Mr. Straczewski states, “The IFA is supportive of the ADA Amendments Act that passed the House of Representatives in June.” He elaborates that the bill has come a long way in accommodating small business establishments. “When the bill was originally introduced, it was not helpful to employers whatsoever,” he says.

The new legislation expands those entitled to employment rights under the disability act.

AAHOA’s concern is that the bill will overturn several U.S. Supreme Court decisions issued in recent years, and place additional burdens on small business owners. AAHOA recognizes that the “compromise” version of the bill that was passed by the House in June is much improved over the original version of the ADA Restoration Act that would have included employees who wear corrective lenses as being disabled. AAHOA remains concerned, however, because even if employees are functioning well with “mitigating measures” such as prescription drugs, hearing aids, and artificial limbs, such employees can still sue for discrimination if they believe that their employers are not making reasonable accommodations for their disabilities.

AAHOA's Mr. Schwartz observes, "We are planning educational sessions for our members if it is passed into law.” Mr. Schwartz says that AAHOA is a strong supporter of the disabled community. "Our members go out of their way to assist their disabled guests with any special needs or requests that the guests might have while staying at the hotels. " But, he interjects, "Regrettably, when laws are passed and regulations are adopted that mandate how people treat each other, this frequently creates unnecessary problems, and even potential lawsuits, for small business owners."

The bill now goes to the Senate where it is expected to be approved and then sent to President Bush for his signature.

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Related readings:

• DOJ Notice of Proposed Rulemaking (NPRM) to Revise ADA Regulations under Title II and Title III
• Americans with Disabilities Act Home Page