Minimum Wage Changes to New York’s Fast Food Industry

As we previously discussed in May and July of this year, wage and hour requirements for the fast food industry in New York State are changing starting in the new year. These changes, which go into effect on December 31, 2015, result from recommendations made by the Fast Food Wage Board, which Governor Andrew Cuomo instructed Acting State Labor Commissioner Mario J. Musolino to empanel in May of 2015. The Wage Board announced its recommendations in July, and Acting Commissioner Musolino accepted those recommendations in September of 2015.

The new requirements apply to any employee working for a covered “Fast Food Establishment” if the employee’s job duties included at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.

A covered “Fast Food Establishment” is any business that meets the following criteria:

• Primarily serves food or drinks, including coffee shops, juice bars, donut shops, and ice cream parlors; and
• Offers limited service, where customers order and pay before eating, including restaurants with tables but without full table service, and places that only provide take-out service; and
• Is part of a chain of 30 or more locations, including individually-owned establishments associated with a brand that has 30 or more locations nationally.

The higher minimum wage rates for covered employees are as follows:

New York City:

• $10.50 per hour beginning December 31, 2015;
• $12.00 per hour beginning December 31, 2016;
• $13.50 per hour beginning December 31, 2017; and
• $15.00 per hour beginning December 31, 2018.

New York State (excluding New York City):

• $9.75 per hour beginning December 31, 2015;
• $10.75 per hour beginning December 31, 2016;
• $11.75 per hour beginning December 31, 2017;
• $12.75 per hour beginning December 31, 2018;
• $13.75 per hour beginning December 31, 2019;
• $14.50 per hour beginning December 31, 2020; and
• $15.00 per hour beginning July 1, 2021.

The New York State Department of Labor has now published a revised Hospitality Industry Wage Order codifying the new requirements in addition to a page addressing a number of frequently asked questions (FAQs) to assist employers with implementing the new requirements.

There are several points to note from the new wage order and the FAQs, which employers should watch as they implement changes to their policies in an effort to remain in compliance with the law:

• Tip credits are not available for fast food employees. However, we note that a fast food establishment is one where patrons order and pay before eating and which offers limited service. So, if employees were previously receiving a tip credit wage because they were waiting on and regularly receiving tips from customers, it is very possible, if not likely, that the employees will not be considered fast food employees under the new requirements.
• Although fast food workers do not regularly earn tips and an employer cannot take a tip credit for them, fast food employees must be allowed to keep any tips that they do earn.
• With the increase in the minimum wage for fast food employees, employers must be sure to pay the higher rate for spread-of-hours pay and call-in pay, should those apply.
• A “fast food establishment” need only have 30 locations nationally–not 30 locations in New York State–to qualify for coverage.
• The 30 establishments need not be commonly owned and operated to trigger coverage as a “fast food establishment.” The 30 establishments can be operated as a franchise if the franchisor and franchisee own or operate 30 establishments.
• A “chain” is defined as a set of establishments that share a common brand or that are characterized by standardized options for decor, marketing, packaging, products, and services.

(via JDSupra)

Staffing Challenges in the Restaurant Industry

In addition to the challenge of hiring cooks and chefs to work the kitchen, waiters and waitresses are becoming harder to find. Based on a recent survey conducted by the National Restaurant Association, more than 50 percent of restaurant owners say that it is extremely difficult to find and keep good workers.

The reason, simply, because of supply and demand.

There is a huge need for restaurant workers, both front of house and back of house, since the U.S. Department of Agricultures reports that people are spending more time and money dining out. Americans are spending approximately 43 cents of every food dollar away from home. Michael Latour, a restaurant owner from New Jersey states, "The economy is good, and people are spending more money than ever in the hospitality industry. We're living in an area that's saturated with restaurants."

However, there just isn't enough workers to support all the restaurants. (Or at least, not enough workers willing to.)

Restaurant owners and managers understand that it is not so easy working in the restaurant environment. Tony Del Gatto says to work at his country club, a chef has to work six days a week, 12 hours a day, for both lunch and dinner services. That's more than 70 hours a week! The long hours are not only burdensome for both cooks and waiters, they are also taxing on their health, as they have to be on their feet all the time.

In addition, workers are not willing to accept low salaries anymore. According to the National Restaurant Association, restaurant wages range from a measly $8 an hour for dishwashers and to almost $20 for bartenders. Chefs earn about $12 an hour, while waiters and waitresses get about $16 (with tips included). Christine Nunn, a restaurant owner and chef states, "People come out of the Culinary Institute of America with a lot of debt, and they're not paying it off at $12 an hour."

Sadly, restaurants are unable to afford to pay more. Most restaurants already work on thin profit margins of only 4 to 6 percent.

Some analysts have noted that a slowdown in immigration may be another cause. The U.S. Bureau of Labor Statistics' reports reveal that 11 percent of Hispanic workers hold jobs in the restaurant and hospitality field. Furthermore, workers have difficulty in finding accessible transport to suburban restaurant jobs.

Fortunately, there are those who continue to stay and work in the fast paced environment of restaurants. Servers express that they love the bonds and interactions that make with customers, and chefs enjoy working with food too much to leave.

Michael De Vincenzi, a maitre d' states, "I want to be busy. I want it to be hectic. I like the stress. It's all adrenaline."

(via

The News Tribune

)

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Tax Deductions for the Restaurant Industry

With tax season quietly approaching, we've decided to review some tips that can help you organize and prepare your taxes in compliance with the IRS. Working in the restaurant industry can provide you with a better salary than other types of employment but the nature of this industry usually causes employees to incur some personal expenses along the way. Learn how to itemize deductions and take advantage of the tax savings below.

Restaurant Uniforms

Chef Whites

Whether you are part of the wait staff, a chef who spends countless hours in the kitchen, a bartender serving drinks all night or a delivery person, you may be required to wear a uniform or protective clothing at work. If you do not receive these items from your employer and pay for them out-of-pocket, then you are eligible to claim a deduction for the purchase price of the clothing as well as some of the maintenance costs like dry cleaning.

Remember, in order to claim the deduction, the clothing purchased must either provide protection from some of the safety hazards or be unsuitable for wear outside of work.

Food Delivery Expenses

Delivery Car

If you use your personal vehicle to deliver food for the restaurant you work at, the value of your car will decrease and your monthly gas expenditures will increase. The result is the acceleration of ordinary wear and tear of your vehicle and you may even need to bring your car in for maintenance more often than normal.

Since these expenses are directly related to your employment, the IRS also allows you to claim deduction for them. If you use your vehicle for work as much as you use it for personal reasons, it’s beneficial to deduct your actual expenditures for gas, oil, repairs, lease payments and insurance premiums.

Please note, you can't deduct your total annual costs. Instead, you must allocate the expenses between work and personal use. You can do this by multiplying the annual expenses you incur by the ratio of miles you drive delivering food to the total number of miles you drive during the year. Alternatively, the IRS provides a mileage rate for each work-related mile you drive.

Other Restaurant Expenses

Restaurant

There are other deductions available besides uniforms and travel expenses. As long as you make cash expenditures during the tax year for the sole purpose of carrying out your employment duties and the expenses are ordinary and necessary for the restaurant industry, the IRS will allow a deduction for it. If unsure about what you can or cannot claim as a deduction, it's best to ask your accountant and do your research to make sure you are in complete compliance with the law.

Reporting Restaurant Deductions

IRS

You must report all deductions on a Schedule A, also known as a 1040 Form, along with the other miscellaneous expenses you itemize. Since the standard deduction is available to most taxpayers without having to report specifics, it is best that you itemize all your expenses so you can save more than the standard deduction.

In addition, all of your expenses are subject to a 2 percent adjusted gross income limitation, which requires that you reduce the total of all miscellaneous expenses by 2 percent of your adjusted gross income to arrive at the deductible amount.

[Via Small Business]