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Archive for January, 2014

38th Annual Hotel, Motel and Restaurant Supply Show of the Southeast

Tuesday, January 28th, 2014

January 28-30, 2014, Myrtle Beach, S.C. For more information, visit Hotel, Motel and Restaurant Supply Show

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International Poultry Expo

Tuesday, January 28th, 2014

January 28-30, 2014, Georgia World Congress Center, Atlanta. For more information, visit International Poultry Expo

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Service Charges and the IRS

Monday, January 27th, 2014

By Douglas H. Duerr

Until recently, many restaurateurs in Georgia made little distinction between service charges and tips, treating service charges as if they were tips earned by the server and other staff assigned to large parties. That has changed with the Internal Revenue Service’s Revenue Ruling 2012-18, issued in June 2012. Enforcement of the Revenue Ruling began on January 1, 2014. (This is a one-year extension from the original deadline.)

According to the IRS, the purpose of this Revenue Ruling was to clarify and update the treatment of gratuity payments — specifically, setting forth when such payments should, for tax purposes, be treated as tips versus service charges. The ruling reiterated four long-standing IRS criteria for when a payment counts as a tip rather than a service charge; the absence of any one of these factors indicates, in the opinion of the IRS, that the “gratuity” may be a “service charge” (see “4 Criteria” below).

The IRS issued this ruling because while tips are “passed through” the restaurant to the tipped employees as their property, service charges belong to the restaurant. Thus, not only are service charges taxable income for the restaurant (and likely subject to state sales/service taxes as well), but if paid out to the staff, subject to FICA/FUTA and withholding.

This Revenue Ruling has implications beyond just taxes because under wage and hour law (FLSA), there already was a legal difference between tips and service charges. While tips can be used to satisfy the tip credit (i.e., the difference between $2.13 and $7.25/hour), service charges cannot be counted towards the tip credit.

Many restaurants impose “tips” or “charges” in a variety of contexts, including large parties (e.g., six or more diners), in- house banquets, catered events, and so forth. With the January 1, 2014, deadline just weeks away, now is the time to review those practices to determine if the IRS Revenue Ruling, with its required record keeping and additional taxes, warrants a change. Strategies for compliance include, for example, reducing the number of incidences when a service charge is imposed or printing each customer check with gratuity amounts to choose from (including a blank for the customer to put “0” or some other amount).

The National Restaurant Association has posted helpful information on tip reporting and the requisite paperwork on its website. For more information, visit “Tip reporting: What you need to know about Form 8027.”

 

4 Criteria For When It’s a Tip, Not a Service Charge

(1)  The payment must be made free from compulsion;

(2)  The customer must have the unrestricted right to determine the amount;

(3)  The payment should not be the subject of negotiation or dictated by employer policy; and

(4)  Generally, the customer has the right to determine who receives the payment. All of the surrounding facts and circumstances must be considered.

 

Douglas H. Duerr is a partner at the Atlanta law firm Elarbee, Thompson, Sapp & Wilson, LLP. He specializes in practice areas such as Wage & Hour Law, Employment Litigation and Labor Relations for the hospitality and services industries. He has worked with a number of restaurant chains on front-of-the-house and back-of-the-house issues and has defended numerous hospitality employers in connection with alleged wage and hour and wage payment claims.

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Dr. Debby Cannon, Director of the Cecil B. Day School of Hospitality in the Robinson College of Business at Georgia State University

Monday, January 27th, 2014

Dr. Debby Cannon recently won the GRA’s GRACE Award for Distinguished Service. Below is a profile of Dr. Cannon as it appeared in the November/December issue of Restaurant INFORMER magazine.

As Director of the Cecil B. Day School of Hospitality in the Robinson College of Business at Georgia State University, Debby Cannon has her finger on the pulse of the restaurant industry, and she keeps busy preparing the next generation of hospitality pros amidst a changing landscape.

By 2020, more than 430,000 people will be employed in the restaurant industry in Georgia – a 15.4 percent jump in job growth. The restaurant industry, she notes, reflects the personality of a neighborhood, section of town or region of the state more than any other type of business and can open doors to career success for those who work hard.

“Working with students interested in the restaurant industry is particularly rewarding because there are so many different career options, from front-of-the-house to culinary and from corporate to becoming an entrepreneur,” Cannon says. “Getting feedback from students and alumni that the School of Hospitality has helped them in their careers in the industry is a true shot of adrenalin.”

Cannon herself got her first taste of the restaurant industry when she worked at a luncheonette in Savannah. Later, she worked in human resources in the hotel industry. For the last 22 years, she has been on the faculty at Georgia State University’s School of Hospitality, the last 13 years of which she has been director of the school. Her work has paid off: the school has not only grown in enrollment and added a master’s in Global Hospitality Management, it’s been listed as one of the Top 20 hospitality programs in the United States.

She notes that one sign of her program’s success is the many alumni who return to the classroom or get involved with internship opportunities for the current crop of students. But it is the students themselves who are her biggest motivation.

“Many of our students are first-generation college graduates. Most students are paying their way through school, have admirable work values and truly value their education. I consider it a real privilege to be able to work with them,” she says. “I am just the face of the program and many times the “front” person. There are many who are working diligently every day in the School of Hospitality. I see this nomination as recognition for all of us.”

Dr. Cannon has also written several articles for Restaurant INFORMER. Below are a selection of those articles.

Proof of the Pudding’s Growth Plan

Get Your Game Plan Ready

Collaborating for Zero Waste

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Gunshow’s Gillespie Announces Ward’s Promotion to Chef de Cuisine

Monday, January 27th, 2014

Growing up, Joey Ward knew he wanted to become a chef. Along with his love for art, Ward found that he could hone his creativity into cuisine.

Ward graduated from the Culinary Institute of America in 2005 with an associate’s degree in culinary arts management. He began his career in the South as the sous chef at the St. Regis Atlanta. Ward eventually left the hotel to work under Woodfire Grill’s former executive chef and Bravo “Top Chef” alum, Kevin Gillespie. After two years there, he moved on to become the executive chef at H. Harper Station and later joined Gillespie at Gunshow.

Ward faces different challenges at Gunshow every day, such as coming up with new, innovative menu ideas, executing the restaurant concept in a timely manner and being resourceful with seasonal foods.

A craft beer enthusiast, Ward also is the two-year consecutive champion of the Kevin Gillespie Super Bowl Dip Off/Snack Attack competition.

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Tin Lizzy’s Brings FlexMex Cuisine to Kennesaw in Summer 2014

Monday, January 27th, 2014

Tin Lizzy’s Cantina taqueria and bar is bringing fun FlexMex cuisine and live music to Kennesaw in early summer 2014. Construction on the seventh Atlanta-area restaurant began this month.

Tin Lizzy’s menu offers a range of favorites, including gourmet soft tacos, dips for the table to share, quesadillas, fresh salads and skillets, as well as an extensive margarita list, cocktails and more than 30 beer selections. Diners can customize their meal with a variety of fresh ingredients.

Tin Lizzy’s hosts live music five nights a week and multiple televisions are tuned into all the major sporting events. The restaurant also provides catering options for corporate meetings, tailgates, family gatherings and more.

Additional Atlanta-area Tin Lizzy’s are located in Buckhead, Grant Park, Midtown, Perimeter, Emory Point and the Mall of Georgia.

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Charleston Restaurant Group to Introduce Oak Steakhouse in Fall 2014

Monday, January 27th, 2014

The Indigo Road Restaurant Group, which owns Oak Steakhouse in Charleston, S.C., has plans to open an Oak Steakhouse in the Avalon development in Alpharetta, Ga. in the fall of 2014.

Chef Jeremiah Bacon, a James Beard semifinalist in 2012 and 2013 for best new chef in the southeast and the executive chef and partner of Oak Steakhouse and The Macintosh in Charleston, S.C., will work with Indigo Road to find a chef to helm the new restaurant. Oak Steakhouse in Alpharetta will reflect the current menu in Charleston with a mix of classic steakhouse features as well as a farm-to-table locally driven selection of seafood and vegetarian dishes. Oak will continue its relationship with Certified Angus Beef®, offering dry-aged or wet-aged Prime bone-in Rib-eyes, Prime New York Strip Steak and center cut filet mignon.

The success of Oak Steakhouse in the Charleston market is an indicator of its future in Avalon. Described as “one of the best and most distinctive steakhouses in the America,” by culinary writer John Mariani, recent accolades include: Travel + Leisure in 2013 naming Oak Steakhouse as one of the best steakhouses in America, The Daily Meal in 2013 listing them as one of America’s top 20 steakhouses and Southern Living declaring Oak one of the best restaurants in Charleston for their travel guide.

The Indigo Road operates six locations in  Charleston and Columbia, S.C. Led by managing partner Steve Palmer, the hospitality group also specializes in restaurant and hotel consulting services.

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Team Hidi 2.0 – The Giving Kitchen Benefit

Sunday, January 26th, 2014

January 26, King Plow Events Gallery, Atlanta. For more information, visit Team Hidi 2.0.

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Rice is Executive Chef at The Big Ketch Saltwater Grill

Sunday, January 26th, 2014

Darrell Rice’s desire to become a chef started while growing up on a small town farm in south Georgia. At a young age he learned to fish, hunt, garden, cook and even butcher from his parents and grandmother. Being in touch with the origin of foods and food preparation led him to pursue a culinary career.

Now, with 19 years of working in the Atlanta restaurant scene under his belt, the new executive chef of The Big Ketch Saltwater Grill is bringing diners fresh, casual seafood prepared with a gourmet touch. He is also the executive chef of upcoming barbecue restaurant Smokebelly.

Rice attended the Georgia Institute of Technology until his junior year, when he transferred to the Art Institute of Atlanta’s School of Culinary Arts to pursue his true passion. After graduating in 1995, he joined award-winning restaurant Canoe. During his time there, he gained experience in every aspect of the restaurant business. Throughout his career, he worked at several other notable restaurants around Atlanta such as Aria, Cabernet, Old Vinings Inn, Mosaic and Pour Bistro and alongside chefs Gary Mennie, Gerry Klaskala, Richard Holley, Paul Albrecht and Richard Blais.

Rice focuses his cooking on globally influenced, technical cuisine. He hopes to provide The Big Ketch diners with well done, unpretentious food in an inviting atmosphere with friendly service.

In addition to being executive chef at The Big Ketch, Rice is the executive chef of the Smokebelly in Buckhead. The restaurant blends barbecue techniques from regions all over the country. He is creating a menu full of smoked and non-smoked meats using both wet and dry rubs and injections.

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2014 Taste of Dunwoody to Benefit Children’s Healthcare of Atlanta

Saturday, January 25th, 2014

January 25, 2014, Crown Plaza Ravinia, Atlanta. For more information, visit Taste of Dunwoody

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