Restaurant Law Blog

Thursday, January 9, 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.


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Thursday, January 9, 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.


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Thursday, January 9, 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.


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Thursday, January 9, 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.


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Thursday, January 9, 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.


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Thursday, December 19, 2013

A Primer on the "200 Foot Rule" and the "500 Foot Rule" and How They Affect Your Liquor License Application

What is the “200 Foot Rule”?

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.


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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.


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Thursday, November 21, 2013

Department of Health “Cure Period” Will Save Restaurant Owners Money

A special “thank you” to the NYC Hospitality Alliance for their efforts to help restaurant owners by advocating for a “cure period” to allow businesses to correct certain violations before receiving a penalty from the following agencies: DOB, DCA, DOHMH, DOT, DEP, FDNY, DSNY. The cure period will apply to 83 different violations from all agencies; these 83 violations make up approximately 25% of all charges issued by the agencies.

The proposal presented by the NYC Hospitality Alliance is expected to be passed by the City Council and is estimated to save businesses more than $33 million


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Thursday, November 21, 2013

Preparing for your Health Inspection with a “Mock Inspection” Can Help You Get an “A”

No matter how prepared you think you are for your restaurant’s Health Inspection, it is almost impossible to predict what types of violations you will be charged with when the inspector arrives.  As any restaurant owner knows, the difference between an “A” letter grade and a “C” letter grade is huge – both in terms of your ability to bring in customers and in the amount of fines.  Now, you can better prepare for these inspections by scheduling an on-site “Mock Health Inspection” conducted by inspectors from the NYC Hospitality Alliance. Many of our clients have raved about these mock inspections and have found them to be invaluable.


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Thursday, November 21, 2013

New SEC Proposal Allows Restaurant Owners to Solicit Investors Through Crowdfunding

Crowdfunding is becoming an increasingly popular way for business owners to gain the financial backing they need to turn their concepts into realities. In recent years, websites like www.kickstarter.com have helped thousands of entrepreneurs obtain access to the funds they needed to get their projects off the ground. With the internet age upon us, the ability to reach people (and beg them for a few dollars) is easier than ever. However, would-be restaurateurs have not been as successful as other small business owners seeking financial backing in these arenas. Unlike other business owners, restaurant owners often need significant sums of money to open their doors. A donation of $10 in exchange for a coupon or a tee-shirt is not typically going to raise the amount of capital needed for a restaurant. But what if you, as a restaurant owner, could solicit true investors in exchange for a piece of your company?


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Thursday, November 21, 2013

Seminar: How to Prepare for Your Health Code Inspection and Defend Yourself Before the OATH Tribunal

In association with NYC Business Solutions, the DiPasquale Law Group will be providing a free seminar for restaurant owners on issues relating to the New York City Health Code on December 4, 2013 between 2:00 p.m. and 4:00 p.m. The seminar will focus on (1) preparing for your inspection, (2) monitoring the inspection process, and (3) preparing for and defending yourself before OATH. You can register for the Seminar here.


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