Editor’s Note: This Q&A is part of a series of interviews with political figures in the restaurant industry about the issues facing brands, workers and operators in 2026. The following interview has been edited for clarity and brevity.
Restaurants, unlike many other businesses, can’t easily reduce labor costs, even though labor can rival or exceed food costs, said Sean Kennedy, chief advocacy officer for the National Restaurant Association. This makes restaurants uniquely susceptible to political changes in the labor market.
Wages rose after the onset of the COVID-19 pandemic, and they haven’t come down since, Kennedy said. Worse still, restaurants can’t avoid labor cost increases because they’re so labor intensive.
“You need a certain number of people to produce a salad, a burger and fries at a restaurant. You need people to serve them. You need people to clean up,” Kennedy said. “We’re always going to have a baseline workforce need that you can't really trim down.”
At the same time, the sheer variety of restaurants makes the industry especially price competitive, as seen in the rapid proliferation of value wars between QSR chains in recent years.
This makes it difficult for restaurants to adjust their pricing, making them sensitive to changes in labor costs. The NRA is working to address political factors that drive up the price of labor and restrict its supply, from arbitrary immigration enforcement to efforts to eliminate the tipped-subminimum wage, Kennedy said.
Kennedy sat down with Restaurant Dive to discuss the NRA’s major political priorities in 2026. This Q&A, which focuses on workforce problems, is the first part of that two-part conversation.
RESTAURANT DIVE: What is the biggest labor issue facing restaurants right now, and what is the National Restaurant Association’s biggest priority relating to that issue?
SEAN KENNEDY: It's immigration reform. We haven't done immigration reform since the 1980s.
We are on the precipice — as a nation — of having negative population growth this year. It would be the first time since the founding of the United States that we've done that. We've gone through a Civil War, two World Wars, a lot of public health outbreaks, and we've always grown as a population. The restaurant industry relies on foreign-born workers, foreign-born customers, and the status quo on immigration reform isn't workable.
In a lot of respects, one of the only people who could actually broker a deal, in my mind, is Donald Trump. You have Democrats who are in one camp that want to focus on the legal immigration aspects of it, and you have Republicans who are in a completely different camp that only want to focus on border security. Both of them have said, traditionally, “I won't talk about this until my priority has been addressed first.”
Donald Trump has said positive things. He's shown interest as a hospitality owner. He gets the need for immigration. If there's anyone who's going to bring the Republicans to support comprehensive immigration reform I think it's him.
Talk about “The Art of the Deal,” this would be one of the most iconic, meaningful legislative wins that he could have in his presidency, period. Because I think it'll be another 40 years before we see [a major opportunity for immigration reform] again. And if he wants to really burnish his record, I think he's got the ability, and he's got the strength over his party to force something like [significant reforms] through.
What would that look like? Would that be a continuation of theatrical enforcement, but at the same time offer a more streamlined path for people coming here and being able to work?
Two years ago, you had Kyrsten Sinema and others who were proposing a smaller version of comprehensive immigration reform. It was border security plus a path for legalization, where folks who are in this country undocumented had a path to work here legally. It was not everything that either side wanted, but it was the first time you had a small group, a bipartisan group of senators, saying they could get behind this.
Media accounts suggest that President Trump signaled from the sidelines he did not want an immigration bill to be done during Biden's term, and so Mitch McConnell blocked that movement on this. We would love to see that opposition lifted in a Trump administration and to really see some bipartisan movement and some leadership from President Trump.
There's been dramatic civil resistance to the administration's policies — people have died over this issue. Other than Trump’s personal propensity to arrange deals and his ability to discipline his own party, what could move the needle toward a compromise?
In most prior administrations, the dynamic would be that just because Joe Biden wants it doesn't mean it’s going to happen. Donald Trump has a unique ability to drive the legislative agenda in Congress in a way that his predecessors have never been able to do. So getting him to “yes” on moving on this is 80% of the challenge. The 20% is the sticky parts that you're outlining.
There are definitely communities and neighborhoods where enhanced immigration enforcement, in our minds, is a net negative. It’s disruptive and seems arbitrary. We support the goals of President Trump's immigration principles, but there are times where it's been hard for us to explain to our membership the methods and the tactics.
How would you define those goals?
It's what he campaigned on: to reduce the number of criminal elements that are in this country illegally.
What we are concerned with are people here under temporary protective status — out of Guatemala, Haiti, etc. — suddenly, that's being revoked arbitrarily. People are being sent summarily back to countries that they have barely been in or haven't been in for 20 years. These are people who have worked for restaurants, been part of the restaurant community, paid taxes, gotten very few benefits because they are undocumented, because they're here on TPS, and they are making America better. And it breaks our hearts to see our restaurant families broken up like that.
Outside of immigration, what are the major workforce political issues facing restaurants?
Three things come to mind: One, the FAST Act really hasn't gone very far. It hasn't really moved as much in a post-California way, but it's still something we're obviously very mindful of. You saw that another restaurant group recently filed for bankruptcy in California and said it was, in part, because of the FAST Act.
We said it was going to be an existential threat to the restaurant industry that one subset of the industry had to pay higher minimum wages than the rest of the state, and it has been. So we don't view it as a success. We view it as a failure, and one that is reducing the number of jobs for consumers and options for diners.
Two, the preservation of the tip credit also remains a priority for us. Last year, there were multiple challenges at the state and local level to get rid of the tip credit. Those were rejected by voters or elected officials. We're delighted to see what happened in Chicago, with the Board of Aldermen voting to delay the phase out of the tip credit, following the Washington, D.C., model. We are obviously pleased at what's happening in D.C.
We all watched D.C. very closely when they eliminated the tip credit to see where did jobs go and where did restaurants go. And we very effectively used that message in Massachusetts in 2024, in Chicago and other communities, to say, “Don't follow the lead of Washington, D.C.” That's been a winning strategy, but we're taking nothing for granted
Number three would be you still have challenging scheduling mandates that don't reflect that there is still some flexibility that needs to be given to scheduling because — unlike a factory — the number of people that need to be present at a restaurant on a certain night or a certain day of the week is going to vary. A lot of staffing proposals can have really negative unintended consequences for restaurants.
Are you all looking at launching challenges to some of those scheduling laws?
We’re educating elected officials on the unique business model of a restaurant. Restaurants make most of their money for the week on a Friday and Saturday. They're not making as much on a Tuesday or Wednesday. There are days where they're going to need a lot of staff, and there are days where they won't need as much.
What are some of the smaller ideas from policymakers that you're excited about or dreading?
While things like “No Tax On Tips,” and “No Tax On Overtime,” helps workers, it doesn't bring much to the employer. But if that helps us recruit more people into the industry, that's great.
When you're looking at larger items, be it labor laws or environmental laws, or things like extended producer responsibility or “Make America Healthy Again,” there needs to be a reflection on what impact this is going to have on restaurants’ bottom lines, and to affordability for diners.
When McDonald's left the NRA last year, they cited a focus on the tip credit, which they said was anti-competitive. How does the NRA balance between the different competitive interests of different sectors of the industry?
So far, no other restaurant brands have raised the concerns that McDonald's has.
A lot of people recognize full-service restaurants have much higher labor costs than quick service. So whether the tip credit is a competitive advantage for full service over quick service is an open question.
What we support is that restaurants can pick the compensation model that works for them. If a fast food restaurant wants to go on a tip credit model, they are welcome to try. If a full-service restaurant wants to eliminate the tip credit and pay everyone minimum wage and have a service charge, go for it.
What’s remarkable about this industry is how dynamic the approach can be for the front of the house and how you choose to serve customers — if you want it to be robots and tablets, if you want it to be nothing but people, you can. Restaurants can pick the model that works for them.
There are issues that we focus on that are specific to quick service, like the FAST Act, that don't affect full-service restaurants. We focus on issues like the tip credit, which is specific to full service and doesn't affect quick service in general.
In general, the issues facing the restaurant industry transcend what the concept is. They transcend what the business model is. Everyone cares about tariffs. It doesn't matter if you are a white tablecloth restaurant or a corner diner or a corner burger chain. You care about tariffs, you care about immigration, you care about swipe fees.
So the ultimate agenda of the National Restaurant Association affects everyone. It affects all of our members, all of our national members, all of our state and local members. We feel comfortable that McDonald's may not agree with us on tip credit, but they agree with us on the other 99% of issues.
