Restaurant, Bar, Tavern, Nightclub Law

Many media outlets jumped on a (false) report that brunch deals which include unlimited drinks within a certain time period are illegal in New York City. This news shocked New York's die-hard brunch fans, but the panic quickly ceased when the media noted shortly thereafter that the deals aren't actually illegal. So, New York City brunch-goers are free to have their fill of weekend afternoon mimosas after all. More importantly, the city's restaurants aren't in violation of state law when they host brunch specials that include alcoholic beverages.

What caused this so-called panic? The New York Hospitality Alliance posted a reminder on its website recently that simply read: “NYC restaurant and nightlife operators should familiarize themselves with the law," in reference to N.Y. 117-A, which prohibits “selling, serving, delivering or offering to patrons an unlimited number of drinks during any set period of time for a fixed price.”

This law was created more than five years ago in response to complaints that restaurants and bars were over-serving patrons, leading to extreme intoxication, Business Insider reports. 

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.).

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.

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.  

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.

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.

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.

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

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.

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?

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.