A Lawyer's Take on Tip Sharing

The Department of Labor recently issued a proposed rule that could change the way tips are shared among restaurant staff. We’ve partnered with attorney Sid Chary of Kalyan Law Firm, a boutique business law practice focused on the hospitality and creative industries, to explore the legal insights surrounding this issue. 

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According to a recent New York Post article, a recent federal Department of Labor proposal could change how tips are shared among staff at service businesses like restaurants or bars in New York.  The Department of Labor (DOL) proposal would give restaurant owners flexibility in determining how tips left by customers are divvied out among restaurant staff, including restaurant workers like dishwashers or line cooks that would not typically receive tips under current DOL regulations. 

The DOL proposal would change a rule adopted by the Obama DOL that held that tips are the exclusive property of waiters.  The notice of proposed rule-making filed in the Federal Register by the DOL’s Wage and Hour Division on December 5, 2017 would allow tips to be shared with employees not currently entitled to share in tip pools through federal or state law.  For instance, under current New York law, tips can only be shared by non-managerial employees. 

In 2011, under the Obama administration, the DOL issued regulations that provided that tipped workers like workers, not restaurant owners or operators, owned the gratuities left by customers for purposes of the Fair Labor Standard Act.  In passing these regulations, the agency had essentially banned the practice commonly known as tip-pooling, in which all employees would receive a pro-rata portion of the tips left by restaurant customers over the course of the evening. 

In justifying the proposed change, the Trump administration stated that there was a growing disparity between the earnings of front-line restaurant workers like waiters and those in the back, like dishwashers or line cooks.  The proposal was intended to equalize that playing field by allowing restaurant owners and operators more flexibility in determining how tips are shared among both frontline and backline workers. 

The proposed rule generated more than 374,000 comments in the 30-day comment period under federal law after it was published in the Federal Register.  It is unclear whether the rule will be revised after the outpouring of public comments, but the rule will no doubt generate controversy regardless of whether the DOL revises it or not before issuing a final version of the rule.

Should you have any questions, please do not hesitate to contact Kalyan Law Firm to discuss your specific matter.

About Kalyan Law Firm: 

Harri is happy to announce that the Service First blog will now feature regular legal content from our partners at Kalyan Law Firm! We've partnered with attorneys at Kalyan Law Firm to bring you some great legal insights that will keep you in the know.  Kalyan Law Firm is a boutique business law firm focused on the hospitality and creative industries, and related practices.  With offices in New York City and Austin, TX, we offer extensive experience in a wide variety of transactional, corporate, and administrative matters.  This includes a comprehensive technical understanding of how to navigate various Federal and State regulatory agencies such as the U.S. Alcohol and Tobacco Trade and Tax Bureau, the Food and Drug Administration, and the New York State Liquor Authority and Texas Alcohol Beverage Commission; municipal agencies such as Depts. of Buildings, Health and Mental Hygiene and Consumer Affairs and the Board of Standards and Appeals; and local organizations such as community boards, block associations and neighborhood councils.  We offer a broad range of legal services for hospitality companies and entrepreneurs, breweries, wineries, distillers, importers, food and beverage manufacturers and retailers, physical cultural establishments such as gyms and yoga studios, as well as service providers to those industry members.   Additionally, we provide legal counsel to creatives such as musicians/songwriters, visual artists, filmmakers/actors/screenwriters, talent managers and production companies. Finally, our firm can help with any immigration needs and we handle employment visas, green card applications, and investment based visa petitions. For more information, check out the firm's website atwww.kalyanlawfirm.com and if you have any specific questions, please e-mail the firm at hello@kalyanlawfirm.com.  

Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Hari Nathan Kalyan, Esq. P.C. (dba “Kalyan Law Firm”) or its attorneys, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

Harri Announces Partnership with BenefitMall

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We’re thrilled to announce our partnership with BenefitMall, a leading provider of employee benefits and payroll services!

Mutual BenefitMall and Harri hospitality clients will have access to a fully-integrated solution that allows full control and visibility over every stage of an employee’s lifecycle.

This collaboration integrates Harri's Workforce OS™ with BenefitMall's PayFocus Pro, allowing clients to streamline every aspect of employee management. Designed exclusively for the hospitality industry, customers utilizing the tool have access to intelligent scheduling, live performance management, and a biometric time clock. 

“BenefitMall is excited to offer our hospitality clients with a talent solution tool that fully integrates with our current payroll platform,” said Kevin Thornton, BenefitMall senior vice president, payroll sales. “This partnership with Harri will allow our clients a simplified way to track and manage employees, as well as discover new talent to meet their company’s needs.”

The hospitality industry is unlike any other, and requires a talent tool designed specifically for its needs. 

“Through our partnership with BenefitMall, we will be able to easily assist more operators and HR professionals in their hiring and employee management practices," said Luke Fryer, CEO and Founder of Harri.

Headquartered in Dallas, BenefitMall partners with a network of 20,000 Brokers and CPAs to deliver employee benefits and payroll services to more than 200,000 small and medium-sized businesses. By combining payroll and benefits, BenefitMall empowers Trusted Advisors to develop the best employee programs while maintaining compliance with government regulations and Health Care Reform.

Our innovative and user-friendly system allows businesses to source, hire, and manage their talent. With Harri, hospitality brands can easily implement top comprehensive team scheduling, communication, and labor cost management technology built exclusively for the industry.

Learn more!

Blockchain, Cryptocurrency, and the Hospitality Industry

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What is Blockchain?

Blockchain is a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. In other words, a continuously growing list of records, called blocks, are linked and secured using cryptography.

Blockchains are secure by design, and eliminate a middleman (big banks or government) - which makes them enticing for certain industries.

How is Blockchain Tied to Cryptocurrency?

Simply put, Blockchain is the technology that enables the existence of cryptocurrency.

Cryptocurrency is a medium of exchange, such as the U.S. dollar. The main difference is that it is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds.

You’ve probably heard of Bitcoin, which is one of the oldest and most well-known cryptocurrency. Others include Ethereum, Ripple, Litecoin, and Monero.

What Industries will be Disrupted?

Technically, any industry that deals with data or transactions of any kind could be disrupted by blockchain technology. But there are some industries where it will be more prevalent. While the hospitality industry itself may not be impacted for a number of years, certain aspects of the industry could potentially be, including:

  • Payments & money transfers

  • Cybersecurity

  • Forecasting

  • Supply chain management

  • Cloud storage

  • Loyalty programs

  • Human resources

So...What’s My Next Move?

Blockchain has been making steady progress from a startup concept to an established currency in a short amount of time - so the worst thing you can do as a business owner or operator is sit passively on the sidelines.

Some retailers and services have already been accepting Bitcoin as a form of payment for some time. As cryptocurrency grows in popularity and becomes more widely accepted as a legitimate form of currency, restaurant operators need to simply be aware. Though too new for (many) restaurants to move forward with accepting this form of currency, it is a hot topic across many industries and worth keeping an eye on.

With global business and the economy in a good place, more companies are willing to take calculated risks. Even if the industry is light years away from accepting cryptocurrency, it’s important to educate yourself on innovations (not limited to blockchain) and stay curious about the latest technologies and trends in the market.

What are Your Company's Core Values?

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What are Core Values?

Core values are our deepest and most closely held personal beliefs that make us who we are. 

Most people have a set of personal core values (even if they don’t realize it) that determine guidelines for behavior, which helps shape how the world perceives them. 

But developing core values for your brand is also important - not to mention a great business strategy!

Ideally, core values should be defined from the outset of your business. But if you haven’t, the beginning of a new year is a great time to start. 

Why are Core Values Important for My Business?

Your company’s core values serve many functions; namely, communicating who you are to the world (which helps build brand affinity) and giving your employees buy-in, or a sense of being invested in the larger scope of the company.

Core values can be incorporated throughout many areas of your company, including:

  • Interview: Find candidates whose values are in line with your company’s.
  • Onboarding/Training: If your team understands behavioral standards from the moment they walk in the door, there’s less room for ambiguity. Core values set expectations and provide employees with a mental checklist to review before making a decision or reacting to a situation.
  • Education/Learning Management: Provide refresher courses tied to your core values as part of company-sponsored continuing education services. Consider adding a section in the employee contract that communicates part of annual reviews will be based on how an employee represents the core values of your company.
  • Service: Post your core values where your team will see them every day. They can refer back your core values as guidelines when faced with a challenge. 
  • Discipline: It’s a lot easier to refer to a transgression in humanized terms as opposed to an arbitrary, numerical rule buried in the handbook.

How do I Define My Company's Core Values?

While determining your core values may seem like an internal activity, or not a priority at all, it can actually have far-reaching impact on your company as a whole, from staff to strategy.

Before defining your core values, practice some mindful activities and brainstorming to help you get started.

First, answer these questions:

  • What are 5 things that make your business unique?
  • What are 5 things that make your business competitive?
  • What are 5 ways your business can work through from a negative experience?
  • What are 5 ways to that you can drive your business forward?

Next, here are some tips for determining your company’s core values:

  • Keep your list of core values strong, but short - usually 5 is a good number (choose more than 10 and some may be forgotten). 
  • Consider coming up with a creative acronym for easy recall amongst your team.
  • Always be reevaluating! Times change, brands change, and people change. Don’t be afraid to reword a core value or ditch it altogether in place of a new one. Maybe one of your values is providing the best ingredients at all cost - but you’re trying to be more sustainable. It’s ok to switch it up. Your team and clientele will appreciate your transparency and openness to change.
  • Incorporate your core values so they seep into every aspect of your business, from the interview process to displaying them prominently in your place of business. This will not only keep everyone accountable, but help you to build brand affinity in your community.
  • Involve your team in choosing or reevaluating your core values. Your people are the face of your company and should represent the embodiment of your company values and culture.

Below is an example of what 5 core values might look like for a restaurant:

  • Raise the Bar: There’s no such thing as unreasonably high standards. Deliver the highest quality in everything you do. Encourage others to do the same.
  • Own It: Treat your role like a business, and the whole team wins.
  • Think Green: We can’t solve food waste - but we can be stewards of the environment by practicing sustainability. 
  • Frugality First: Always strive to do more with less. Find creative and cost-effective ways to get the job done.
  • Be Family-Focused: We’re a work family. We also have families. Supporting others makes us stronger.

The Need for Speed in Recruiting

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by Cleo Clarke, VP of HR Strategy & Development at Harri

This article originally appeared in the January 2018 issue of Hospitality Trendz.

 

 

In today’s workforce, we are plagued with so many of what I have come to call “blockers.”

As a recruiter or a single-unit owner, one such blocker is being tasked with the overwhelming and time-consuming burden of staffing your operation with just ordinary staff, but quality staff who will grow with your company.

There are usually two points at which this task becomes a necessity: when your business begins to scale, or when you are dealing with standard turnover -- which is higher than 70% in the hospitality industry.

Not only is the pressure on the find someone quickly, but you must also be sure to find the right person for the job. In this day and age, good candidates are extremely hard to find. This perhaps rings most true in the hospitality industry, where we face additional challenges such as the chef shortage and high turnover, and where candidates get snatched up in a millisecond by the competition.

These are just a few of the challenges that you’re faced with when it comes to acquiring and retaining employees.

Now, I am not going to say  that finding the right candidate, creating a strong recruitment strategy, hiring top line players, and creating an environment that speaks to an outstanding culture are all not important-- because they are. However, the need to hire the right candidate expeditiously is of the utmost importance to survive in the hospitality industry.  

I can speak to this because I have been on the other side of the table. I’ve waited for that call from the recruiter who said, “Thank you for coming in today. We’ll be in touch.” It is probably the most frustrating sentence one can ever hear when looking for a new position. Then, there’s the grueling wait, hoping they will call you back. Most often, you’re simultaneously trying to juggle interviews and several potential offers, hoping your number one choice comes through.

As the hiring manager, it’s up to YOU to make the right hire - and quickly.

Here are some tips to make sure you are hiring the right candidate:

  1. Be sure to have a strategy:  Make sure you are planning for your company’s future growth and are building a true talent pool.

  2. Use an applicant tracking system to choose your candidates: Where traditional ATS tend to be clunky and outdated, streamlined digital solutions, like Harri, seamlessly connect with sourcing channels, making it easily customizable for any recruiting process in minutes. A good ATS should not only track applicants, but ultimately help to reduce drop-off in the hiring funnel  which, as we already pointed out, is currently higher than 70% in the hospitality industry.

  3. Make sure you have a solid, widely-known employee value proposition:  In short, these are the offerings provided by your organization in return for the skills, capabilities, and experiences an employee brings to the table. Ideally, this would focus on five key areas: Benefits, Work Environment, Career, Culture, and Compensation. Ask yourself why a candidate should align themselves with your organization over others, and what would attract them to join your organization and influence their job satisfaction. Maybe you’re looking to advance your team from within so you promote growth and development opportunities. Maybe you want to retain staff so you offer stellar benefits that allow for employees to enjoy a healthy work-life balance. Whatever it is, don’t be shy about shouting it from the rooftops.

  4. Post the job advertisement -- and make sure it’s not boring: It should be clear, concise, and interesting. The experience and skills must be specific as well. A simple, key way to reduce 90-day turnover is by outlining clear expectations of the role from the get-go. And remember -- make it fun.

  5. Review resumes quickly as they come in: I advise you do this daily and make sure you bring the qualified candidates in quickly. If you don’t, someone else will. If you’re always on the go, using a mobile-friendly sourcing and hiring platform can help you view and vet applicants, message potential candidates, schedule interviews, and more -- all from your mobile device.

  6. Don’t let the applicant get lost in the application process:  Tech-based solutions like Harri have hiring flows that allow you to proactively flag top talent, add them to a shortlist of top candidates, and keep the process moving along efficiently for both parties. Showing that you’re engaged makes employees feel invested in the process and builds affinity with your organization.

  7. Plan ahead and decide who will conduct the interviews: Make sure the interviewer knows what to ask, and that the interview process is not long and drawn out.

  8. Take notes in your interviews so you can remember the details: An easy way to do this is plan your questions in advance, and leave space in between for notes (this works whether you’re taking notes manually or electronically). Limit your note-taking to a candidate’s most important or revealing words or phrases (after all, your ultimate job is to listen). If a candidate says something that stands out, mark it with an asterisk so you can follow up on it later in more detail or recall why that particular person stood out to you.

  9. Keep your candidates warm through the process: Given the stiff competition and the pace at which the hiring process moves in the hospitality industry, hiring managers should be sure to  follow up with candidates to let them know their is still interest. Ideally, this should be every few days or at least once per week, depending on the role. If a candidate follows up to thank you, take the time to write a note back.

  10. “TBNT” (‘Thanks, But No Thanks): If you’re passing on a candidate, do them the courtesy of sending them a “TBNT” email or letter,  Not only does this add a personal touch and help humanize your hiring process, you never know when another position might open up -- and if you’re doing all of the above, a smart candidate will remember your organization and may be interested in applying again. Plus, if they had a positive experience, they may think to refer your other open positions to friends.

  11. Make sure you always keep speed in mind: Time is always a factor in the hospitality industry. Whether it’s quickly servicing a customer, or finding the right candidate, if you act too slowly, you will miss out and wind up paying (quite literally) for it later.

Hiring may not be a constant within your company, but you should always be recruiting and building a pipeline of candidates. Talent is constantly moving in and out of your organization, so you need to be on top of your recruitment game. Technology is key to helping you in this process, so always be investigating the best in talent recruitment and management software to give you the competitive edge.

Speed in recruiting is key--but remember, a strong recruitment strategy will help you with your need for speed.

 

About the Author

Cleo Clarke is the Vice President of Human Resources Strategy & Development at Harri. Clarke is a senior HR professional and has held an executive role in the hospitality industry for more than 15 years.