The Law Blog of DiPasquale Law Group
Friday, March 07, 2014
Are You Playing Music in Your Bar or Restaurant Without a Music Distribution License? A Recent Crackdown in NYC Could Cost You Thousands in Fines
If you play music in your restaurant (even as background music through your iPod) without the appropriate music distribution license, you may be fined up to $30,000 for each song played. Even playing songs that you legally purchased is considered to be against the law because there is a difference between purchasing music for “personal use” versus “commercial use.” In recent weeks, a few of our clients have received letters from ASCAP (the American Society of Composers, Authors, and Publishers) – a Performing Rights Organization that represents thousands of artists. The other well-known Performing Rights Organizations include SESAC (the Society of European Stage Authors and Composers) and BMI (Broadcast Music, Inc.).
ASCAP’s letter notified these clients that they are in violation of Copyright Law due to their “unauthorized performances of copyrighted musical works.” ASCAP’s letter further explained that the courts may award damages that range from $750 to $30,000 for each song played plus the costs of the lawsuit. As an alternative to a costly lawsuit, owners could purchase an ASCAP license which allows the restaurant or bar to play all songs by members of ASCAP for a monthly or yearly fee.
Many restaurants and bars that play music do not have the appropriate licenses, but is it worth the risk? The internet has made it even easier for Performing Rights Organizations to identify which venues are playing music. If you do get caught, your chances of success are not good. One of the largest Performing Rights Organizations, BMI, has not lost a single lawsuit filed against copyright infringers in over 51 years. Obtaining a license does not have to be costly – for smaller venues, the license may be as little as $300 per year.
As an alternative to obtaining a license with ASCAP, SESAC, or BMI, more options are becoming available to restaurant owners. The popular music website www.Pandora.com is currently offering a business subscription for $24.95/month.
Thursday, February 27, 2014
NYC Restaurants May Be Required to Install Carbon Monoxide Detectors
A New York City lawmaker is sponsoring a bill that will require all New York City bars and restaurants to install carbon monoxide detectors. Coincidentally, City Councilman James Vacca co-sponsored this legislation several weeks ago, but he is now seeking to expedite it after it was reported that a leak at a New York restaurant last week resulted in the death of the manager and sickened more than two dozen other people.
Vacca is hoping to prioritize the bill, aiming for the council committee to pass it as soon as possible. The councilman said this potential law should never have been omitted, as restaurants and bars present the same dangers in terms of carbon monoxide poisoning as private homes. New York State fire codes only require carbon monoxide detectors in places where people sleep.
Police evacuated the Legal Sea Foods restaurant located in the Walt Whitman Shops on Long Island after they received reports that a woman had collapsed in the basement of the establishment. A spokesman for the Town of Huntington, where the restaurant is located, said investigators found a leak in the flue pipe of the water heater.
The town official who inspected the restaurant last March didn't find any issues. Legal Sea Foods was due for another inspection in March, as it is subject to them annually. Although authorities said the carbon monoxide appeared to be limited to the basement of the restaurant, the entire restaurant and surrounding businesses were evacuated Saturday.
Local plumbing and heating experts say that they are unsure why it wasn't previously mandated that carbon monoxide detectors be installed anywhere people gather. It may be New York State law to have one in private residences, but it won't be a requirement by law for restaurants and bars until the passing of this bill.
Legal Sea Foods and nearby Panera Bread can't reopen until the town's plumbing inspector confirms there are no leaks and gives the restaurants proper certification.
Wednesday, February 12, 2014
Little Known New York City Restaurant Law Repealed
Did you know that a majority of New York City restaurants break the law every time a patron walks through their doors?
Well, neither did many city restaurateurs.
Until now, it was illegal for restaurant staff to automatically serve customers water.
Since at least as far back at 1991, eateries in the city of New York have been legally required to ask every one of their customers if they would like water before a glass is poured for them. This regulation was enacted when the city was facing a drought emergency in the early nineties, but has barely been enforced since then.
More than 10 years after the legislation was enacted, in 2002, the city experienced another drought emergency and the Department of Environmental Protection issued warnings to 14 restaurants.
Mayor Michael Bloomberg's administration repealed the regulation during his final days in office. As of 30 days from Jan. 23, when the final rule was published in the city record, it will be perfectly legal for restaurant staff to serve water to patrons whether or not they ask for it. However, this repeal does not mean that restaurants are legally obligated to pour water for every patron.
Numerous New York City restaurant owners were quoted as saying they weren't even aware of the longtime law. Some noted they usually ask customers if they would prefer tap water (at no charge) or mineral water. Despite all of the chatter surrounding the little known recently repealed law, restaurateurs have always had a financial incentive to sell soda and alcoholic drinks rather than water.
The installation of more accurate water metering in the last decade allows the city to keep a closer eye on water consumption. Energy and conservation efforts, such as more efficient toilets and timers on spray showers in parks have led to a significant decrease in the number of gallons of water New York City consumes each day. In the mid-1970s the city's consumption reached its peak at 1.5 billion gallons per day, and currently the city barely consumes 1 billion gallons. The city's consumption hasn't been this low since the 1960s, when the it was experiencing a drought and the population was substantially smaller.
If you have questions about your restaurant’s compliance with these recent changes, contact the New York City office of the DiPasquale Law Group for a free consultation at 646-383-4607.
Thursday, January 09, 2014
Health Department Violations “Nearly Impossible” to Overturn: True or False?
The New York Post recently reported that Health Department violations issued against restaurants were upheld 97% of the time in administrative hearings. While this statistic is certainly outrageous, it may not come as a surprise to anyone in the restaurant industry. One likely explanation for this has to do with the Department of Health’s “settlement offers” which allow restaurant owners to accept a lower fine rather than attempt to fight the violations. City Council Speaker Christine Quinn has already implemented changes that will lower fines for restaurant owners, and Mayor-elect Bill de Blasio has expressed the need for change in the existing inspection system. Hopefully, a true overhaul is underway.
In the meantime, what should you do if your restaurant receives a violation from the Department of Health? Should you just concede and pay the fines after learning about this dismal statistic? The answer is: it depends. With the current system in place, it sometimes makes sense to pay when it is a non-letter grade inspection. However, when the violations affect your letter grade, much more is at stake; if you have a credible argument, an appearance at the hearing by you or an attorney may be worth it. Each Department of Health inspection report is different, and each restaurant owner has different things to consider.
If you have had a recent visit from the Department of Health and want us to review your inspection report, contact DiPasquale Law Group for a free consultation. Our attorneys can explain your options and allow you to choose what is best for you and your restaurant.
Thursday, January 09, 2014
City Council to Vote on NYC Styrofoam Ban
A ban on foam food containers will likely pass during today’s City Council vote. This ban will be considered a victory for Mayor Bloomberg during his final days in office, but could cost restaurant owners who will be forced to switch to more expensive materials like paper or plastic for to-go packaging.
Mayor Bloomberg has long argued that food foam containers, which are made out of expanded polystyrene, are extremely difficult to recycle and are filling up the city’s landfills. Not surprisingly, the makers of foam products disagree and argue that it is possible to recycle these products in a cost-effective way.
In response to the foam companies’ arguments, Bloomberg’s original proposal was amended to give Styrofoam makers a chance. Dart Container Corporation, one of the largest producers of foam products, has been given until January 1, 2015 to prove that the containers can be recycled efficiently. However, if Dart Container fails to demonstrate this, the ban will take effect shortly thereafter on July 1, 2015.
The bill does allow businesses that gross less than $500,000 per year and non-profit organizations to apply for a waiver from the law. Additionally, those who violate this law within the first year will only be subjected to warnings; fines will be implemented the following year.
Thursday, January 09, 2014
Tax Credits for Restaurant Owners Set to Expire at End of Year
The Work Opportunity Tax Credit (“WOTC”) can save employers thousands of dollars per eligible employee, but it is one of the many tax credits set to expire at the end of 2013. If you are planning to hire new employees, you can still take advantage of this tax credit if hiring occurs prior to December 31, 2013. If you will not meet this deadline, do not fret: there are rumors that Congress will be extending the credit for another year.
The Work Opportunity Tax Credit provides tax credits to employers who hire members of 9 specific target groups: (1) recipients of Temporary Assistance to Needy Families; (2) veterans; (3) ex-felons hired within one year of conviction or release; (4) designated community residents ages 18 through 39; (5) vocational rehabilitation referrals; (6) designated community resident youths ages 16 through 17; (7) Supplemental Nutrition Assistance Program recipients ages 18 through 39; (8) Supplemental Social Security recipients; and (9) Long-Term Family Assistance recipients.
Prior to receiving the credit, an employer must complete a Pre-Screening Notice and Certification Request from the IRS and submit an Individual Characteristic Form to the Labor Department. If the employee meets all eligibility requirements, the WOTC Unit will issue a certification and the employer savings will begin.
If you have questions about your eligibility, or if you need assistance applying for the WOTC, contact DiPasquale Law Group for a free consultation.
Thursday, January 09, 2014
Restaurant Owners Will Pay Additional “Spread of Hours” Pay as Minimum Wage Increases
Have you heard of “Spread of Hours” pay? It is a law unique to New York and greatly affects the restaurant industry, but it is not well-known. Recently, employees of the chain restaurant Planet Wings sued their employer for failing to comply with the spread of hours mandate imposed by New York law. You, too, could be liable to certain employees who meet hour requirements.
“Spread of hours” pay is an extra hour of pay that must be paid to employees when an employee’s workday is “spread” over 10 hours. For example, if a waiter works a morning shift from 10am – 3pm and then returns later in the day to work an evening shift from 6pm – 10pm, he has worked a total of 9 hours “spread” over a 12 hour period and would be entitled to an additional hour of pay at the minimum wage. This additional hour of pay is not for work performed.
Courts have found that the spread of hours requirement does not apply to employees in certain industries whose total weekly compensation is above the minimum wage. However, in the hospitality industry spread of hours pay must be paid to employees who meet the requirements regardless of how much money the employee makes.
In any event, the upcoming increase in the state’s minimum wage will affect all employers responsible for spread of hours pay. In the hospitality industry, the additional hour of pay will increase with the minimum wage, and in other eligible industries, more employees will now be eligible to receive spread of hours pay.
If you have questions or concerns about the “spread of hours” requirement, contact DiPasquale Law Group for a free consultation.
Thursday, January 09, 2014
Restaurant Owners Now Permitted to Charge Customers More for Credit Transactions vs. Cash
Restaurant owners will now be able to charge customers different rates depending on their method of payment. After years of legal battles, American Express, Visa, and MasterCard must now allow business owners to implement a “two-tier pricing system.” This two-tier system permits business owners to charge customers who pay with credit cards more than those who pay with cash or debit cards.
In August 2012, a group of business owners won a settlement from MasterCard and Visa after filing a class-action lawsuit against the two major credit card companies. In the settlement agreement, MasterCard and Visa agreed to pay $5.7 million in damages to business owners, lower “swipe fees”, and allow business owners to implement surcharges on credit transactions.
In his decision supporting the MasterCard and Visa settlement, Judge John Gleeson explained, “For the first time, merchants will be empowered to expose hidden bank fees to their customers, educate them about those fees and use that information to influence their customers’ choices of payment methods.”
Now, a recent American Express surcharge settlement will allow business owners to implement this same two-tier pricing system for American Express users.
These decisions present new challenges to business owners as some may be hesitant to begin implementing these surcharges for fear of customer backlash. However, in an area that previously had no room for negotiation, having the option should come as good news.
Thursday, January 09, 2014
Minimum Wage Increases Effective December 31, 2013
With the start of the New Year, business owners are facing big changes as the minimum wage increase takes effect. Effective December 31, 2013, the minimum wage is now $8.00 per hour up from $7.25. The minimum wage will continue to increase over the next two years, going up to $8.75 in 2015, and then up to $9.00 per hour in 2016.
In addition to changes in the minimum wage, restaurant owners will be affected by changes in tip credits, overtime rates, meal allowances, and uniform allowances.
Since the tip credit has increased to $3.00 per hour, the minimum wage for tipped employees remains $5.00 per hour. However, overtime rates for tipped employees, uniform maintenance allowance, and meal credits have increased.
As minimum wage increases, so too does the overtime rates for restaurant servers. The new rate will now be $9.00 per hour, determined by the following calculation: $8.00 (minimum wage) x 1.5 - $3.00 (tip credit).
The uniform allowance has also increased to $9.95 per week for those working over 30 hours per week; $7.85 for those working 20-30 hours; and $4.75 for those working under 20 hours.
If you have questions about your restaurant’s compliance with these recent changes, contact DiPasquale Law Group for a free consultation.
Thursday, January 09, 2014
Reminder: LLC Members Are Not Employees and Cannot be Paid Traditional Salaries
The following was written by Guy Alessandro, CPA and a well-respected colleague of mine.
By definition of law LLC members are not employees, they are self-employed. They are not eligible to be paid as employees and issued W-2 forms at year end. Members that draw salaries must do so without tax withholding and are personally responsible for all taxes. Member salaries are reported annually on form K-1 as “Guaranteed Payments to Partners”.
Typically, members draw non-payroll salary checks without withholding taxes and then personally pay quarterly federal and state estimated tax payments. Some members find this process inconvenient, costly (paying the accountant to calculate quarterly payments) and unsettling compared to withholding and remitting taxes every week through the payroll system.
Since the income tax result is same, some LLC members have chosen to pay themselves through the payroll system. However, we strongly recommend that you do not do this for the following reasons:
- It is not in compliance with the law
- If the LLC has a loss, the company winds up paying some or all of its ½ share of the SE tax unnecessarily
- Federal and state unemployment tax will be paid unnecessarily (About $400 per year per member)
- It incorrectly shifts the tax burden for ½ of the SE tax from the member to the company
- If the company fails to pay its payroll taxes, the IRS could take the position that the member still owes it ½ of the SE tax (plus interest and penalties).
- Member compensation is not deductible for NYC Unincorporated Business Tax purposes. When members are paid through the payroll system, their compensation shows up in the wrong place on the company’s federal tax return and does not “flow through” properly to the company’s NYC Unincorporated Business Tax return, causing an understatement of NYC Unincorporated Business Tax return liability.
While the convenience of an automatic weekly paycheck with weekly withholding cannot be maintained, we can recommend some ideas to make this process easier for LLC members:
- Draw your salary through your payroll service as a “1099” vendor without withholding (Be sure to tell your payroll service NOT to generate an actual form 1099 at year end).
- Have the pay split into two amounts, using an appropriate estimated tax % (e.g. if estimated total taxes will be 40%, split a $2,000 weekly salary $1,200 / $800)
- Use direct deposit through your payroll service to deposit the “tax” amount into a personal savings account and the “net” amount into a personal checking account
- Each quarter, transfer the funds from your savings account to your checking account and make estimated tax payments to the IRS and New York State.
Alternatively, you could simply write company checks to the members and employ the same splitting technique, with each member depositing one check to a personal checking account and another to a personal savings account.
Friday, December 13, 2013
Wage and Tip issues in the Restaurant Industry
In the United States, 13.1 million workers are in the food service industry – waiters, waitresses, managers, entrepreneurs, franchisors, franchises, and business leaders. In New York, restaurants are a driving force of the economy employing 8 percent of New Yorkers.If you work in the restaurant business, you are probably familiar with the many employment law issues that exist in the industry. Employers are regularly sued for alleged violations of wage and hour laws to those that do not even exist.
Over the past year, more and more suits have been brought against employers regarding that handling of tips. A tip, or “gratuity,” is money given to an employee by a customer for a service provided. Any charge to the customer, other than food, beverages, lodging, or specified good, is a tip and must be given to the employee. All private sector employers and employees are subject to the provisions governing tips in New York, including the Hospitality Wage Order.
The New York Hospitality Wage Order permits tip sharing and tip pooling. The Wage Order was last updated in 2011 and changed previous rules regarding gratuity. Not only have they become stricter, but the rules have very specific mandates that can be easily missed. If you are concerned with your employer’s handling of tips or simply want to make sure all of your restaurant’s practices are up to date, contact a law firm specializing in New York City restaurant practices.
At the DiPasquale Law Group, our lawyers represent restaurant workers and owners in New York City with claims related to the Hospitality Wage Order and workers' rights, including failure to pay employees an hourly wage and overtime, improper tip handling or sharing, improper service charges, failure to train staff in the receipt of tips, and requiring employees to buy and launder their own uniforms without reimbursement.
← Newer12 3 4 5 6 7 8 9 Older →
The DiPasquale Law Group is a full service law firm that assists Restaurant and Nightclub Owners in all legal aspects of their business. Serving Manhattan, Brooklyn, Queens, and the Bronx in New York City. Attorney James DiPasquale, Principal.