• Increasing the minimum wage to $8.75/hour, effective July 1, 2013
• Increasing the hourly wage paid to tipped foodservice workers to $6.03/hour, effective July 1, 2013

The New York State Restaurant Association (NYSRA) is predicting that the above changes would impact 705,000 workers, costing business owners $1.01 billion a year in total wages. In addition to raising the pay rate of all employees, new notices of their pay rates will need to be provided. The New York State Restaurant Association is currently scheduling meetings with the administration and legislative leaders to provide feedback regarding these issues. If you are concerned about the impact this change will have on your business, you can share your story by contacting the NYSRA or your state senator.

Governor Cuomo also addressed reducing costs for employers by making changes to the current Unemployment Insurance and Worker’s Compensation systems. Specifically, Governor Cuomo discussed the need to address the longstanding problem of employees who voluntarily leave, but are still able to collect unemployment benefits. The Governor also proposed creating a simpler Workers’ Compensation Board assessment process and reducing transaction costs that Worker’s Compensation payers are responsible for.

If you have questions about how the proposed changes will impact your restaurant, please contact our office for a free consultation.

In Best Metropolitan Towel & Linen Supply Company, Inc. v. The Oar Steak & Seafood Grill, a restaurant owner was orally promised a two-year contract by a representative for the linen supply company. However, when the restaurant owner tried to terminate services after two years, it was discovered that the written agreement demanded a five-year term. The agreement further provided for a “liquidated damages clause”, which requires the restaurant owner to pay a significant amount of damages for early termination of the agreement. The linen supply company sued the restaurant, and the Court awarded the linen supply company over $8,000 in liquidated damages, claiming that the restaurant owner breached the contract by failing to continue using the linen company for the full five years, despite the original two-year oral agreement, which could not be proven. Lesson learned: make sure you get everything in writing.

In a different case, Best Metropolitan Towel & Linen Supply Company, Inc. v. Afternoones Restaurant Corp., the linen supply company sued a restaurant for liquidated damages in the amount of $25,000 after the restaurant breached the alleged “five-year” agreement. In that instance, the Court chose not to enforce the liquidated damages clause, and awarded the linen supply company only $1,646.53 – the amount actually owed for linens that had been used by the restaurant. The Court did not favor the linen company here because the linen company failed to show how the liquidated damage amount was reasonably proportionate to the anticipated lost profits.

Although it is possible to be successful when faced with a lawsuit by your linen supply company, it is not worth the risk. By being aware of the common ways some linen supply companies operate, you can better protect yourself and your business. Before signing anything, locate where in the contract it states the length of service – does it say one year or five years? (Hint: these particular terms are usually in the fine print on the back-side of the contract.) Does the agreement provide for a possible change or increase in price after a “promotional period” ends? Do all disputes need to be sent to the company via certified mail? In some instances, if you fail to send your complaint via certified mail, you may be forfeiting your right to do so at a future date (i.e., in court).

If you have any questions regarding your linen supply contract, or if you are currently facing a lawsuit by your linen supply company, contact our office for a free consultation.

The Alcoholic Beverage Control Law prohibits liquor licenses from being issued if the location of the establishment is within 200 feet of a building used exclusively as a school or place of worship on the same street. If the establishment or place of worship is on a corner lot, the building is considered to be on both streets. In that instance, you must measure the distance from your main entrance door to the nearest door at the place of worship/school on your street that is routinely used by patrons, students, or the general public.

How do you determine if a building is used “primarily” as a school or place of worship?

In order for the 200 foot rule to apply, the courts have adopted a test that looks at whether the building is used exclusively as a school/place of worship. For example, if a building contains a place of worship and residential apartments, the 200 foot rule would not apply. If, however, the building was used as a place of worship, but also held private social functions for the benefit of its congregants, the 200 foot rule would still apply because the social functions are viewed as incidental to the building’s main use as a place of worship.

How do you accurately measure the distance between the two establishments?

The measurement must be taken in a straight line from the center of the nearest entrance of the school or place of worship to the center of the nearest entrance of the establishment. “Entrance” means a regularly used entrance and does not include emergency exits or maintenance access, nor does it include an entrance used primarily by employees or staff.

The 200 foot rule does not apply to:

• Establishments in operation since December 5, 1933
• If the location was licensed before the school or place of worship existed
• Theaters operated by a not-for-profit organization

What is the “500 Foot Rule”?

The Alcoholic Beverage Control Law contains restrictions on the approval of certain on-premises liquor licenses if the location is within a 500 foot radius of three or more other establishments with on premises full liquor licenses (liquor, wine and beer). This restriction only applies in areas with a population of 20,000 or more.

Public Interest Exception

If the location is subject to the 500 foot rule, the license cannot be issued unless the State Liquor Authority determines that it is in the “public interest” to issue the license. In order to determine if the license is in the public interest, the Authority will consult with the municipality or community board and conduct a hearing to determine whether the public interest would be served by issuing the license. At the hearing, the municipality or community board will generally consider the following factors:

• Whether the applicant has obtained all other necessary governmental licenses and permits
• The impact on the existing noise level of the area
• The history of violations and reported criminal activity at the premises
• The number and types of other licensed premises in the area

If you have any questions about your liquor license application or your community board hearing, contact us for a free consultation.

While the Department of Health seems to be applauding this new development, restaurant owners are not so enthusiastic, and rightfully so. As anyone in the restaurant business knows, the letter grading system affects business in a big way. The difference between an “A” grade and a “C” grade can be the difference between a packed Saturday night dinner service and an empty dining room. With so many restaurant options to choose from in New York City, many customers feel they should not have to settle for less than the best. Customers do not have to consider that health inspections are often flawed; instead, they can simply look at a letter grade and make a quick decision: to dine, or not to dine?

The New York Restaurant Association has been fighting the letter grading system since the system’s inception, but it is obvious that letter grades are not going anywhere any time soon. With sites like Yelp making access to these grades easier, it is more important now than ever for restaurants to handle their health code violations quickly and efficiently.   If you need assistance in fighting a violation you received, please call our office for a free consultation. 

• The employee’s rate(s) of pay;
   
• The basis of the employee’s rate(s) of pay (e.g. by the hour, shift, day, week, salary, piece, commission, or other);
   
• Whether the employer intends to claim allowances as part of the minimum wage, including tip, meal, or lodging allowances, and the amount of those allowances;
   
• The employee’s regular pay day designated by the employer in accordance with the frequency of pay requirements in the Labor Law1;
   
• The name of the employer and any "doing business as" names used by the employer;
   
• The physical address of the employer's main office or principal place of business, and a mailing address if different;
   
• The telephone number of the employer;
   
• Any “such other information as the commissioner deems material and necessary.”
   

Keep in mind, notices must be given in a worker’s primary language. Regardless of whether you’ve given your employees notice when they were hired, you must still give all your employees a notice of their pay rate this upcoming January, even if nothing has changed with respect to their pay rate, and the notice must be independent (its own form), and not contained in an employment agreement. You are required to keep a copy of all signed, and unsigned (refused) notices.

Penalties: If you fail to provide a notice, you can be fined $50 per week, per employee, and the employee can sue you for up to $2,500.

• How much money is everyone investing?
• What percentage ownership interest is being given to each Member?
• Is any Member being given an ownership interest for his “work” – “sweat equity”?
• Who is going to manage the business, and if it is more than one person, who makes the decision on disputed issues?
• What if there are only two of you, and you each own 50% of the business? Then who makes the call?
• Can you be forced to contribute extra money if the business needs it to grow or sustain itself?
• Can your ownership interest be reduced or terminated?
• Can you assign your ownership interest to anyone?
• If you die, will your wife/husband/child be able to inherit your interest in the business?

Answer these questions, and then put the answers in writing.