By Jessica Hussain, Aprio | Vendor Bylines —
The Work Opportunity Tax Credit (WOTC) could mean increased tax savings for you or your business.
WOTC is a federal tax credit available to employers for hiring individuals from certain targeted groups. WOTC is a dollar-for-dollar credit against federal income tax that is claimed on an individual owner’s tax return or C-corporation tax return. This tax credit puts actual dollars back into the pockets of business owners that can be used to invest back into the business, purchase capital expenditures or, in the case of an individual taxpayer, utilize for personal purposes.
Overview of the WOTC
The WOTC is available to employers who hire those in one or more targeted groups:
- IV-A recipients
- Qualified veterans
- Designated community residents
- Vocational rehabilitation referrals
- Summer youth employees
- Food stamp recipients
- SSI recipients
- Long-term family assistance recipients
- Long-term unemployed (new for 2016)
The tax credit can be $1,200 to $9,600 per qualified employee, depending on the target group. The credit limit is per employee, so if you have five employees that qualify under a target group, you would receive the credit amount times five.
The credit depends on the target group, wages paid to an employee and the number of hours worked in the first year of employment.
In order to qualify for the tax credit, you will have to obtain one of the following items on or before a new employee’s first day: 1) certification from a designated agency that confirms the employee falls into one of the targeted groups or 2) an employee’s signature on Pre-Screening Form 8850. This form is due to the Designated Local Agency (DLA) within 28 days of hiring a new employee.
What aspects of WOTC have changed?
Recently, WOTC was extended and expanded by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). The tax credit can now be retroactively applied to wages paid to an employee who begins work before Jan. 1, 2020, and was expanded to include a new target category, the long-term unemployed.
Under the PATH Act, a qualified long-term unemployment recipient is any individual who is certified as being in a period of unemployment which is not less than 27 consecutive weeks and includes a period in which the individual was receiving unemployment compensation. The addition of long-term unemployed to the targeted groups required the WOTC Prescreening Form 8850 to be updated so that employers could request certification for this new group.
How does the WOTC extension and expansion impact you?
The extension of the WOTC eligibility period to Dec. 31, 2019 gives employers additional opportunities to receive federal tax credits for hiring certain employees.
An employer’s existing hiring practices can be easily updated to include the WOTC screening process. You’ll need your new employee to complete a questionnaire either online or over the phone to determine if they are eligible for a WOTC. A quality payroll company will already have this process in place, which alleviates the burden from the employer.
If you have an existing process in place to determine if a new employee is WOTC eligible, then you will simply need to update the criteria to include the long-term unemployed.
About the Author
We welcome any questions you may have about WOTC or your employee’s eligibility. We can assist in reviewing the targeted groups with you and guiding you to a qualified payroll provider to make sure you are set up correctly to capture the WOTC credits.
If you have any questions about how to determine if your existing employees are eligible for WOTC or how to update your hiring processes for new employees to take advantage of the credit, please contact me at email@example.com or (770) 353-3051.
By Matthew Sloan, Fobesoft | Vendor Bylines —
Another question might be, what is the biggest difference between a successful chain or franchise and a struggling independent restaurant.
30-year food service veteran, founder of Cypress Hospitality Group and founder of Fobesoft.com says “Operating with a budget, no question”
The big guys are doing it, and love ’em or hate ’em, they are consistently opening new stores in big fancy locations all while operating at their full profit potential.
Successful restaurants chains and fast growing franchises achieve this by looking at their numbers daily. Not just looking but using the tools to make everyday actions.
Restaurant managers don’t need to be bogged down with hours of paper work everyday to see if they are hitting there numbers. What they need is a quick 5 minute snap shot of WHERE THEY STAND NOW.
Where do you stand?
Most restaurants get their P & L (profit and loss) statement after the month closes out, this is really important, but what if your team could have seen the writing on the wall in the middle of the month, and started adjusting their scheduling practices, or the way they order food or beer to correct said issue. The point is, if they had a clear picture of the issue, while it was happening, they will have a much better chance of fixing the issue and saving the month. After the month closes out it is too late.
Having targets and setting goals is vital to the financial well-being of your operation, but far to often we see unrealistic goals with time frames that are too long. One of the best techniques we are seeing with budgeting is setting short term, manageable goals. A restaurant manager can have the greatest impact on the financial strength of the restaurant by looking at targets daily and weekly, not monthly and quarterly. Good days turn into good weeks, good weeks make good months, have a few good months and now you have a good quarter. That’s how small changes can have huge impact. Remember those franchises and successful chains I mentioned earlier, that’s what their doing.
Sorting through the information
While it is true that are we are living in the “information age”, there is such a thing as too much information. The average restaurant manager can’t handle the amount of information that is coming at them from POS systems and high tech accounting software. These programs have their place with accountants and book keepers, but the average restaurant manager needs something that is going to take a few minutes a day, just giving them the BIG PICTURE of how decisions they make today, will affect tomorrow. The boots on the ground managers has a lot of responsibilities, and getting frustrated after getting lost in the minutia of reports and details and not where the managers needs to be.
Mastery through practice
A crazy thing happens when you are forced to look at your numbers everyday for 5 minutes, you always know where you stand. Have you ever been to a manager meeting and a manager gives you a blank look when you ask if they knew how the month ended. What about if you ask how they plan to fix the cost of goods issue this month, and the room fills with silence. When managers know where they stand, and they understand how decisions affect the business financially, the uncertainty has been all but eliminated from the monthly manager meetings.
Matthew Sloan is the Vice president of sales and marketing for Fobesoft.com, an intuitive daily sales report. Fobesoft.com is a cloud based tool that allows the manager and operators to see how the decisions they make today will affect the profitability of the restaurant in the future. Making better managers and delivering P & L’s daily.
By Jessica Hussain, Aprio | Vendor Bylines —
In an industry notorious for turnover, motivating and retaining key employees can be a huge challenge. Without recognition of their contributions toward making your restaurant successful and profitable, employees may not feel invested in their job and decide to go elsewhere. Here are three programs you can implement to reward your employees’ contributions – and decrease your employee turnover.
Cash Incentive Plans
The most popular type of incentive plan strategy, cash incentive plans encourage retention by giving employees a measurable and compensable goal to work toward. To implement this type of plan, you must create easily measurable and transparent goals so employees understand how you are scoring their performance and how their performance helps the restaurant.
These plans pay out through payroll bonuses and can be either short- or long-term. Short-term plans work best for front and back of the house employees who do not participate in management. You should measure short-term plans throughout the year with monthly or quarterly payouts. For your management-level employees, focus on a long-term plan that encourages them to stay.
Ownership incentives allow employees to share directly in the profits and growth of the company. The equity incentive plan deployed depends on the entity type. Two of the possible types of equity incentives to consider for your restaurant are:
- Phantom ownership – This method lets employees share in company growth without ceding any actual ownership. Phantom ownership arrangements cover a specified time frame. If the arrangement results in a payout sometime in the future, the payment comes through a bonus in payroll. This results in ordinary income to the employee and an ordinary deduction for the restaurant. Phantom ownership does not result in an immediate payment, so if you want to incentivize an employee to stay with you until you sell your restaurant, this type of arrangement may be a good fit.
- Profits interest – If the entity is a partnership, this method gives a profits percentage ownership in the business to your employees. Profits interests allow employees to participate in the profits at the store level or company level, based on the entity agreements. The profit allocation would be reportable as income by the employee, and it could have additional state tax considerations.
Retirement plans for the restaurant industry can present a challenge. According to the ALM Intelligence’s 2017 401(k) Benchmark Report, Accommodation and Food Services “has the worst plans of any of our surveyed industries, ranking 26th out of 26,” with half of the smallest employers offering no contributions at all. These industries struggle with cost of the contribution, compliance with regulations, retention of employees and recruitment of top talent. Restaurant owners in particular sometimes receive many of their contributions back, having to make “top heavy” contributions to non-key participants or incurring penalties from running afoul of IRS and DOL regulations.
Bringing in a retirement plan professional to evaluate your restaurant’s specific challenges can provide many unique solutions that could be tailored to your needs. Fortunately, you can often recoup the expense of hiring a qualified professional in cost savings from employee retention and increased contribution opportunities.
By rewarding your employees through an incentive or retirement plan, you can reduce the costs associated with hiring and training new employees for your restaurant. Take time to consider the options available to you and what might fit your unique business situation.
About the Author
Need help determining the right way to incentivize your employees? Contact Jessica Hussain at firstname.lastname@example.org or 770-353-3051.
BREAKING NEWS!! New Ruling on Tips in Colorado!!
We recently became aware of a Court case decision that directly impacts the restaurant industry. It changes the rules on tips depending on if you take the tip-credit or not. Due to the complexity of this issue, it is important for you to read the ENTIRE story before acting. You may or may not wish to make any changes based on the information provided. However, if you do choose to make any changes, we recommend that you seek council prior to doing so.
On June 30, the Tenth Circuit Court of Appeals decided a case concerning tipped employees that sets a new legal precedent for employers in the State of Colorado. In Marlow v. The New Food Guy, Inc, the Court decided in favor of the employer, closing the door on claims that tipped employees have a “property right” to tips paid as a result of customer service, as long as the employer pays the employees FULL minimum wage or more. This decision rejects the Federal Department of Labor rule stating tips are the property of the employee and outside of a legal tip pool, the employer can’t direct where that money goes.
The CRA recently told me I couldn’t share tips with the back of house or managers, why has this changed?
Last year, the Ninth Circuit Court of Appeals ruled in a very similar case (Oregon Restaurant & Lodging Association v. Perez) that tips were the property of the employee and outside of a legal tip pool, the employer couldn’t direct where those tips went. Additionally, the Court determined that tips could only be shared with regularly tipped positions and not the back-of-the-house staff, regardless of the hourly rate paid to tipped employees. Because this was the most recent ruling on tips and tip pools, the CRA and labor attorneys suggested following the Ninth Circuit’s decision.
What has changed is the fact that restaurants in Colorado (and several other states) are subject to the Tenth Circuit Court of Appeals and that Court has just handed down a new ruling disagreeing with the ORLA case. This new ruling changes how restaurants in Colorado may want to handle tips and tip pools.
What does this mean for restaurants in Colorado?
As long as tipped employees are paid full minimum wage (not tipped minimum wage) or more by the employer, the employer can decide how tips are distributed. This means that in Colorado tipped employees currently must make $9.30 an hour and $13.95 for overtime, or more (note- this rate will increase every January 1). If your tipped employees are paid at least this much, then you as the employer can decide how tips will be distributed and can share them with the back of house or managers, and the business can even keep some or all of the tips. Keep in mind, however, that we still have the requirement in Colorado statute, C.R.S. § 8-4-103 (6), allowing an employer to assert claim to, right of ownership in, or control over tips only if the employer posts a printed card at least 12 inches by 15 inches in size with letters one-half inch high in a conspicuous location at the place of business. The card must contain a notice to the general public that all tips or gratuities given by the patron are not the property of the employee, but instead belong to the employer. If the employer does not post a printed card detailing tip ownership as described above, the employer may not exert any control over tips designated for an employee under Colorado law. For those of you who do business over the phone or email, such as the catering business in the Marlow case, you may want to include this same notice in your catering agreements as well.
Is this permanent?
We don’t know. A group of restaurants and trade associations (including the NRA) have petitioned the Supreme Court to take up the ORLA case. This case now directly contradicts it. If the Supreme Court decides to take up this issue and rules in a certain way, restaurants will have to go back to only sharing tips with regularly tipped employees. Currently, it is not clear if the Supreme Court is even going to take up the case and if they do, it could be years before there is a ruling.
What do I need to do now?
For all of these reasons, you may want to take a more conservative, wait-and-see approach and keep your business model as is. However, some employers may want to adopt the above-outlined steps. This is the time for you to reach out to your business advisers to determine the best solution for you and your employees.
If you have any questions about tip pools, wage and hour issues, or questions about this new precedent, please contact Nick Hoover by email or call 303-830-2972.
According to the National Census of Fatal Occupational Injuries from the U.S. Dept. of Labor, Bureau of Labor Statistics, employers experienced 4,836 fatal workplace injuries in 2015, and roadway incident fatalities claimed more than one-quarter of the total. You can protect your organization’s most valuable asset — your employees — by promoting safe driving practices.
In worksite procedures and workplace signage, encourage these 10 safe driving practices to reduce the risks faced by your employees when they get behind the wheel:
- Inspect the vehicle. Check the lights, gauges, brakes, horn, tires, windshield wipers, fluids, belts and mirrors.
- Secure cargo such as tools and other equipment.
- Buckle up. A seatbelt reduces risk of death by 45 percent in cars and by 60 percent in light trucks.
- Drive defensively.
- Avoid distractions. Put down the cell phone and do not text.
- Don’t wear headphones or earbuds while driving.
- Avoid impairment.
- Avoid aggressive driving.
- Maintain a safe distance between moving vehicles and slow down during inclement weather.
- Take security measures. Carry vehicle information at all times, secure the vehicle and avoid parking lots with poor lighting or sightlines.
Visit Pinnacol’s Knowledge Center page on driving safety. The many resources on this webpage for policyholders include a sample driving and traffic violation policy, defensive driving quizzes, a vehicle safety checklist, seatbelt safety posters in English and Spanish, a short defensive driving video, and additional tools and tips to enhance the motor vehicle safety of your employees. Pinnacol’s website also lists online, interactive safe driving training available from J.J. Keller. Or, contact Pinnacol’s Safety On Call online or at (303) 361-4700 or (888) 501-4752. Our Safety Services team stands ready to answer questions and help keep your workers safe on the road.
The CRA has been receiving an increased number of calls from employers that have received a visit from ICE agents or who are concerned about what to do when/if they do receive a visit.
We thank Hans Meyer and Julie Gonzales of The Meyer Law Office for conducting a free seminar designed to give you an update on what to expect, what your rights as an employer are and how to comply with immigration laws during the hiring process.
This presentation covered:
Some Handout Materials from that seminar are found below.
Know your Rights for Employers Presentation
Redacted Notice of Inspection Letter from ICE
Redacted DHS Subpoena
Redacted DHS Administrative Warrant
Employer – Know Your Rights
And in case you need an updated I-9 Form, you can get it HERE
If you have any questions about this content, contact the CRA Office 303-830-2972. Or contact The Meyer Law Office, PC for more information specifically on Immigration Law.
By BMI | originally published in Food & Beverage Magazine June 2017 —
A vibrant nightlife is important. In fact, it’s like money in the bank for cities everywhere. Between tourists, conference-goers, and regular locals, people like places that promote “sociability” and that’s where they like to spend their hard earned cash. And when you think of the term “sociability,” what comes to mind? That’s right. Places to eat, drink and listen to music.
The Responsible Hospitality Institute (RHI), a private, non-profit organization founded in 1983, is one of the leading sources for events, resources and consultation services on nightlife. At their recent summit in Austin, Texas, one of the primary focuses was on the value of music. During the presentations, which included “Make Live Music Thrive in Your City,” the facts couldn’t be stated enough:
“Live music draws tourists, attracts new residents and provides an authentic cultural experience. A city can achieve global recognition for its local music. But it also has concrete benefits for the local economy. The music industry generates tax revenue and creates jobs. Hotels, restaurants, and taxis also indirectly benefit from music fans.”
The beauty of this statement is that the power of using music not only applies to cities, it also applies to small businesses that can become destinations as well. People have to eat and drink, that’s a fact. But they do have a choice of where – and music can be a deciding factor. No matter where a business is situated, the way it sounds is important.
BMI represents songwriters because we, too, love music and what it adds to our culture. Over the past 77 years, the Company has seen how our affiliates’ work has been the soundtrack to the exuberant highs and lows that bring people together as a community. These 750,000 music creators come from small towns, big cities and everywhere in between, all with the same goal in mind – to create music that reaches people and makes their day a little brighter, and a lot more “sociable.” What other commodity can provide all that?
So, ask yourself what it would be like to have the radio go silent, the Internet stripped of its music and the themes of any TV show or movie removed. Pretty bleak. Fortunately, we, like the customers of bars and restaurants, have a choice. We can continue to support music creators, and in doing so, support ourselves and the businesses we run.
For more information on how to obtain a BMI music license, please visit bmi.com or call a BMI representative at (800) 325-1395.
File this under O RLY – A new study from CU Boulder finds that raising the minimum wage could push low-pay workers away. Quoting the study author, “By making low-skilled workers more expensive, there is the potential for employers to use fewer workers, switch to slightly higher-skilled workers or exchange capital technology—such as self-serve kiosks—for low skilled workers.” That is consistent with what CRA members told us last year during the minimum wage fight. Read the full story here.
+ And read how San Diego’s quick and steep rise in minimum wage is having an effect on restaurants in that city.
+ Another study from the University of Washington looks at the implications of higher minimum wages on hours for low wage workers. To read more about this study, click here.
What’s that you say? You can’t wait for all the amazing educational opportunities at the upcoming Colorado Restaurant Show in October? Get a quick fix and review the presentations from the 2017 NRA Show. They included topics from Cybersecurity to Cold Brew Coffee and everything in between. Then mark your calendar for October 9-10 for the Colorado Restaurant Show at the Colorado Convention Center where you can join your fellow restaurateurs in learning the latest trends in technology, business operations, workforce development and more. And stay tuned for the announcement of our killer keynote speaker this year, we think you’ll be impressed!