THE MAGAZINE OF THE ARIZONA RESTAURANT ASSOCIATION
What’s Cooking in 2015
TECH TAKEOVER Technology in restaurants is on the rise, and diners are eating it up. A new report shows that diners are more
3 7 inclined to use restaurant related apps and tablets. feature LABEL ME It’s been more than three
Will mobile ordering take over the restaurant industry? Are grocery stores the dining destination of the future? Will labels continue to be all of the rage? Arizona Restaurant News has answers. We’ve collected and synthesized restaurant industry data creating actionable insights for operators.
years since the U.S. Food & Drug Administration kicked off the menu labeling food fight and it looks like it’s finally coming to an end. Here’s what you need to know about the FDA’s new menu labeling regulations.
ON THE MENU The National Restaurant
Association’s annual What’s Hot culinary forecast predicts menu trends for the year ahead, surveying nearly 1,300 professional chefs – members of the American Culinary Federation (ACF) – and the results are in.
EVENT CALENDAR eventful year
MESSAGE FROM CHAIRMAN
SURGE PRICING dine on demand
BUDGETING new year, new budget
RETAIL & RESTAURANT HYBRIDS food fight
#1 DINING TREND tech takeover
COLOR OF THE YEAR pantone pick
BILL CHANGES NLRB changing
HEALTH CARE REFORM restaurant Rx
FOOD TRENDS top 10
ALCOHOL TRENDS top 5
LABOR POSTERS it’s the law
HEALTHY DINING health halo
SUGAR sweet ideas
Happy New Year!
How much will you gain in 2015?
President & CEO Steve Chucri Membership, Vice-President Jana Shelton Editor Marketing & Events, Director Tiffanie Hawkins ProStart & Education Foundation, Manager Tracie Head Public Affairs & Communications, Manager Chianne Hewer Partnerships & Industry Programs, Manager Brynn Johnson Magazine Design VE Marketing Photography Grace Stufkosky Photography 2014 Advertising Menu
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In this issue of Arizona Restaurant News, we’re sharing
predications for the major foodservice trends you should
consider, when preparing for the New Year along with
others that are important to your business in order to
create strategic results in 2015 and beyond.
Stay tuned, throughout the year as the association’s
The New Year is a propitious time for businesses to
bimonthly magazine brings you industry news, personality
re-prioritize their objectives and start afresh with renewed
profiles, unique trends, human
vigor and a clear mission. 365 new days. 365 new
365 new days. 365 new
resource information, relevant
opportunities for you to create optimal business results.
political developments and more.
As always, the businesses that win in the New Year are
opportunities for you to create optimal business results. FFFF
those that iterate incessantly to define their own innovation
curve, that establish strong and unambiguous consumer
connections, and those that use their data points effectively
to minimize wasteful spending and increase their ROI
(return on investment).
Steve Chucri President & CEO, Arizona Restaurant Association
an eventful 2015
The association is committed
to giving its members the very
best in professional development,
Foodist Awards Show
Arizona Restaurant News Article Deadline
business opportunities and a
vibrant industry community.
PAC Baseball Game (late in the month)
Arizona Restaurant News Ad Deadline
Attend one (or all) of our 2015
events to build invaluable
Arizona Restaurant News Article Deadline
Mark your calendar: Arizona Restaurant Association Events
connections and increase your
competitiveness with business-
Arizona Restaurant News Ad Deadline
building strategies and
PAC Kickoff (early in the month)
NRA Public Affairs Conference
Industry Alert & Member Happy Hour (PHOENIX) (late in the month)
Arizona Restaurant News Article Deadline
18 20 to
National ProStart Invitational
22 25 to
Southwest Gas ProStart Invitational
Restaurant Leadership Conference
Arizona Restaurant News Ad Deadline
ARE YOU PROTECTED AS WELL AS YOU THINK YOU ARE?
Arizona Restaurant News Article Deadline
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We are approaching the start of a new year and, from an accounting perspective, one of the very first things you should have already completed for 2015, is a budget. Budgeting helps with controlling restaurant resources while providing a plan on how a restaurant will achieve its goals for the upcoming year. You might ask, what are some key steps in creating a budget for 2015? resolutions for your BUDGET 9 New Year’s
new year, new budget
• You need to brainstorm regarding your revenue and expense activity for the upcoming year. Do you feel you can increase your revenue 5%, 10%, 15% or even 20% from the prior year? The increasing cost of commodities and/ or salaries and benefits may force you to charge more for menu items, which automatically will result in increased revenues. Perhaps, you will have more marketing efforts and expenses in the upcoming year that you hope will result in increased revenue. • Do you have any one time expenses in the prior year that you do not believe you will have in the current year or vice versa? • After you have brainstormed on what you want to achieve in the upcoming year and how you will achieve your goal, now it is time to start putting together your budget. • I would suggest you start with your prior year income statement presented on a monthly basis (if we are doing a budget for 2015, you would be using your 2014 income statement). Some accounting packages will allow you to create a budget template for the upcoming year based off the prior year’s activity.
Well, I am glad you asked, because I was about to provide you with a few of my thoughts and ideas!
• Typically, a budget is created sometime in November/early December. Completing your budget in this time frame will allow you time to discuss the budget with management to ensure everyone is on the same page and expectations have been set prior to the start of the year.
Author | Brian Campbell, CPA, Partner, Henry & Horne, LLP
• Now, go line by line starting with revenue and adjust each month’s revenue amounts from the prior year for what you want to achieve in the upcoming year. If you believe revenue will increase 5% over the prior year, then set your revenue budget at 105% of the prior year’s amount. • Next, budget your cost of goods sold (food, beverage and liquor costs). I would suggest you have a target of what these costs should be as a percentage of revenue. Using historical cost percentages, standards for the industry and maybe some negotiations with your vendors, come up with a realistic cost as a percentage of revenue for each of these
items. It will take a lot of work to monitor these costs on a month to month basis to ensure actual costs stay in line with your budget. • Payroll is probably the next major cost category to budget. You should have a good handle on your labor cost as a percentage of revenue, just as you should with your cost of goods sold, as discussed in the previous bullet point. As your revenue fluctuates, so should your labor costs. Budget your labor costs as a percentage of revenue for each month. • General and administrative costs (I think of these as controllable and non-controllable costs) are the next area of costs to budget. Examples of your controllable costs are supplies, cleaning, linens, small wares, uniforms, marketing, utilities, repairs and maintenance, administrative wages, etc. Examples of your non-controllable costs are occupancy costs, depreciation, equipment rentals, etc. Using your prior year costs in these areas should be a good indication of what to expect in the upcoming year. Controllable costs may fluctuate a bit based on what you budget for revenues, so keep this in mind. However, non-controllable costs should not fluctuate with revenue and should be pretty consistent with the prior year.
Color of the Year
Once you have addressed the above revenue and expense items on a line by line, month by month basis, you will have a great start to your budget for the upcoming year. You will need to review your budget and critically question line items to determine if they are realistic and achievable. Be sure to include management in the review process so they can have a chance to be heard and buy into your budget. Your management team will be instrumental to the success of maintaining and sticking to the budget, so they should be included in the process. After your critical analysis of the budget is completed, your budget is final and you are ready to implement in the upcoming year. You will need to monitor your budget on a month by month basis. If you are not meeting your budget, you will quickly need to determine why so appropriate changes can be made going forward.
Pantone is a New Jersey-based company best known for creating a standardized color matching system used in many industries, but primarily printing. They’ve also become famous for rolling out color of the year each December for the following 12-month period. They announced the 2015 selection, inspired by a famous fortified wine produced in Sicily. Marsala, the color, is a little bit red, a little bit brown and decidedly earthy. One thing it is not is last year’s purple. “The impactful, full-bodied qualities of Marsala make for an elegant, grounded statement color when used on its own or as a strong accent to many other colors,” said the company in a statement . “Much like the fortified wine that gives Marsala its name, this tasteful hue embodies the satisfying richness of a fulfilling meal while its grounding red-brown roots emanate a sophisticated, natural earthiness.” Marsala is commonly used for cooking to create rich caramelized sauces. “There are two styles of Marsala to know for cooking and they are dry vs. sweet, but Marsala is so much more than a cooking wine,” writes Wine Folly . “It can be made dry and fine enough for sipping, like Sherry or Madeira.” Perhaps future color of the year options? is named after Favorite Sicilian Wine
and next year too
better market to customers through highly targeted offers.
The prescient restaurant industry consultants at Baum + Whiteman have once again released their annual predictions for food and dining trends in the coming new year and be- yond. Among the various prognostications for 2015 : hummus will be hot! Oysters will be even hotter! And, the new
Maybe the most visually compelling forecast within this
“amazing new uses for wearables like Google Glass ,” according
to the report.
bacon? ‘Nduja, the spreadable Calabrian sausage.
“With face-recognition software,” the report notes, “a server
But, what tops on the list, of course, is the continuing tech
can know the names of everyone at your table...’nice to see you
takeover. Growing use of technology was a big dining trend in
again, Mr. Jones; your usual Hendricks martini?’” Imagine the
2014, and there’s no end in sight, as discovering best practices
and new gadgets seems to be the industry new normal. Mobile
When Google launched their new wearable line, they tapped
apps for preordering your meal, tablets that let you pay tableside
Chef Roy Choi to be one of “first to make, to tinker, to create,
and loss prevention in the cloud – the possibilities are endless.
to shape, and share through Glass.” And earlier this summer
Soon mobile ordering will be ubiquitous and consumers are
going to expect every restaurant, from small fast-casual chains
to the leading QSR brands to have it as an option. McDonald’s is
testing apps for putting in custom-hamburger orders while
Pizza Hut already allows diners to drag and drop pizza ingredients
onto a pie graphic when placing their order. And Taco Bell
recently discovered, mobile ordering apps are also a great way
for chain restaurants to collect masses of consumer data and
Chef Jamie Oliver’s Food Tube took a whole new look at the
hands on cooking approach; giving a truly unique perspective
watching a video or tutorial on how to cook some of his
Data from Apple Pay and other electronic wallet solutions
will also make it easier to personalize the dining experience –
wait staff may soon know everything from guest names to
what they ordered the last time they were in.
With labor costs rising thanks to new, higher minimum-wage
laws across the country, these types of newfangled devices, once
deemed unaffordable, are now beginning to look more attractive
and possibly even cost-effective for restaurants to implement.
message from chairman
Feature restaurateurs and vendor representatives that support the industry and come together on a volunteer basis, to ensure a healthy and growing atmosphere for our businesses. The ARA plays a vital role in the success of our industry. I am privileged to have served the leadership of this board and look forward to seeing the future great accomplishments of this organization. opportunities. This year I challenge our membership to take advantage of the Arizona Restaurant Association’s offerings and benefits; from participating in the events and joining seminars and trainings, to supporting the government affairs activity and interacting with our industry partners or vendor members. Each one of us has the ability and opportunity to make a difference in our industry, our state, and in every single one of our customer’s lives. I fully expect 2015 to be another tremendous, high note type of year for both the organization and our industry A new year means a new chance to do better than before; new budget, new customers, new goals and new
high note on a
As 2014 is now behind us, it’s time to look back and reflect on the past year’s accomplishments and challenges. Surviving another year in the industry with minimal or zero more added gray hair is an accomplishment in itself; succeeding goals and expanding locations in one year is enough to leave on a high note. Owning restaurants has been one of the greatest joys of my
The ARA plays a vital role in the success of
life and I’m thankful for the opportunity to start another year as a restaurateur. I am also grateful for the last year serving as the Chairman of the Arizona Restaurant Association (ARA) Board of Directors. This is a group of
our industry . I am privileged to have served the leadership of this board and look forward to seeing the future
Sincerely, Louis Basile, Jr. Louis Basile, Jr. Wildflower Bread Company Chairman, Arizona Restaurant Association
great accomplishments of this organization. FFF
dine on demand
“Can you Uber a burger,” writes The New York Times Magazine
touching on the emergence of “surge-pricing” in restaurant
Uberization of hospitality: premium reservations are the future of eating out
reservations. Are diners and restaurant hot spot foodies willing
to pay a premium to get the best table? Some think the answer
to that question is not only yes, but the idea of premium
reservations could be the future of eating out.
The concept of dining on demand and its structuring is simple
and increasingly common in our digital-driven world. Anyone
who’s used the car service Uber is probably familiar with the
price-varying model: getting a car is more expensive when
demand is high, cheaper when demand is low.
Thanks to the advances in technology and the rise of
reservation apps, like Tock and Resy operators are finally
reconsidering the cost-plus approach and replacing it with
surge-pricing strategies or value-based approaches. Launched
earlier this year, Resy has partnered with New York restaurants
to sell premium tables, giving diners access to tables and times
that the restaurant usually reserves for VIPs. While there is no
flat rate reservations are typically for 10% of average check –
table location, day and time all affect the price.
This pricing practice is not entirely
new. You’ll recall ticketing systems first
hit the restaurant industry in 2011,
adopted only by high-end restaurants
and celebrity chefs, ostensibly to prevent
no-shows and provide booking transparency.
fast, cheap & healthy: Meal Delivery Makes Gains
In a detailed blog post written earlier this
year about the Chicago restaurants he
owns with chef Grant Achatz, restaurateur
and Tock app creator Nick Kokonas pointed
out plenty of upsides for restaurant owners,
In the trendy “Uberization” of our obsession with on-demand delivery services have
who can devote less staff to managing
exponentially expanded a restaurant’s clientele and serving radius. The market is
reservations, book more tables, and waste
currently saturated with several delivery sites that function similarly - such as Foodler
and GrubHub in major metropolitan cities.
Whether you’re looking at extra income
In 2015, startups like Munchery and Sprig will hit their stride and continue to make
stream or just to make people more likely
gains as foodies begin to crave both healthy foods and convenience in equal measure.
to show up, dine on demand technologies
Redefining fast-food with incredibly quick delivery by taking control of the cooking,
clearly are already have a seat at our
Sprig produces the food in-house, curate the menu and only give 2-3 options per day.
Through differentiated logistic strategies, orders are delivered in less than 20 minutes
and economies of scale are satisfied.
transforming from a strictly retail establishment into one that offers a restaurant-style experience. According to USA Today , dining in stores is “one of the fastest growing segments of the grocery industry.” Since 2008, sales of “prepared foods” which include the likes of in-store and takeout dining are up by around 30 percent. Experts are now predicating that grocery store dining “will take business away” from fast-casual restaurants as consumers – are lured by their ready-to-eat offerings, one-stop- shop positioning and competitive prices – shift from spending at restaurants to save dollars. These hybrids aren’t necessarily anything new, but how ubiquitous they have become is something noteworthy. If you’ve ever been to healthy food store and restaurant mega-plex Whole Foods, you’ve encountered the crowds — walls and walls of well-polished humanity sipping tall cappuccinos and eyeing cold cases of wall prawns and hunks of cured meats being worked in the Berkel slicer. Here shoppers can quickly grab a handcrafted salad or locally sourced craft beer all for an affordable price thus making it a de facto neighborhood takeout joint.
Yes, you can have your cake and eat it too. Or eat your cake at the café and then grab some milk and eggs for breakfast. And you can also pick up some beef chow mein for dinner tomorrow. The neighborhood grocery store is Grocery store restaurant hybrids expand further into foodservice
In New York, chef owned Eataly (its two principal investors are Joseph Bastianich and Mario Batali) Italian-food grocery store
has become a phenomenon in the world of retailing and restaurants. The location’s revenue for 2012 was estimated at over $85 million, which breaks down to $1,700 per square foot per year . In comparison, luxury malls don’t eclipse half that, and the country’s highest-grossing restaurant chain, the Olive Garden, barely hits $1,000 a square foot . Instead of deciding to be just one thing, these hybrids are a bit of everything to everyone. It’s clear this business diversification helps bring potential customers through the doors no matter if they just want a bite to eat or a gallon of milk. And in 2015, retailors will continue to push the boundary of foodservice by offering more eat-in-options.
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The long-awaited final rules on nutritional menu labeling regulations for restaurants and vending machines has finally been released. While our industry has one year to comply with this new rule for restaurants, we strongly
Food Labeling: Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments The ARA encourages you to look at the full regulation language and use resources available to you to better understand the implications for your restaurant. In the meantime, here are some key changes: One year implementation (becomes monitored one year from December 1, 2014) Impacts menu labeling for restaurants with 20 or more locations operating under the same name Calorie count will be required for standard menu items o Standard menu items are on menus for more than 60 days o Menus are defined in rule as including prices and listing of items (not a one-item promotional piece at the end of the table necessarily) Additional nutritional information must be available upon request o Statement must be printed on the menu offering additional nutritional information o Additional nutritional information includes: saturated fats, trans fat, etc. based about 2000/calorie per day intake Calorie count must be printed in the same font size (or larger) as the item’s name and price For different portion sizes: o 2 options need a slash (/) between calorie counts o 3+ may have a range for calorie counts Kids’ menus have an option of disclaimers provided in rule Impacts printed or electronic menus Impacts drive thru menus and take-out menus Impacts beverages (including alcoholic) that are not commonly consumed (mixed drinks, unique drinks, alcoholic, milkshakes) If your menu is based on categories with one price, then caloric intake can be in a range o For example: White Wine ($5) with a list of product choice underneath, can have range of calories under the price 300-700 calories Build-your-own items need a caloric listing of a ‘basic or standard’ option Impacts grocery store and convenient stores deli menus and non-prepackaged foods sold
encourage you to take a look and make adjustments to your
operations and menus as soon as you are able.
The new menu labeling requirements for restaurants with 20
or more locations require that calorie amounts and additional
nutritional information be available to customers.
To see a brief summary of changes impacting your restaurant
and menus, please see next page. For more information please
contact Chianne Hewer .
*This list is a brief summary of major changes, and may not be all-inclusive of the changes made by this regulation. For more information please contact Chianne Hewer at Chianne@azrestaurant.org or 602.307.9134.
TO BRING PEOPLE TO THE TABLE.
NLRB ON JOINT EMPLOYERS
The National Labor Relations Board has ruled that it will
consider McDonalds USA, LLC, as a “joint employer” in a
number of unfair labor practice cases filed against individual
franchisees. The decision marks an abrupt change to the
NLRB’s treatment of franchisees, which historically have
been considered independent business owners with sole
oversight of the business decisions in their restaurants.
With this decision, the NLRB is indicating that franchisors
will also be held liable in labor practice cases. Find the
NLRB announcement here .
ry day, the business of Washington happens at our tables. A policy deal. A new business. The next big idea… Serving 130 million people every day. Let the conversation begin. NLRB changing our industry AmericA Works Here ® See how at Restaurant.org/AmericaWorksHere
NLRB PUBLISHES “AMBUSH ELECTIONS” RULE
The NLRB took direct aim at employers when it published a
nearly 200-page final rule in yesterday’s Federal Register
to severely limit an employer’s ability to respond during
employee unionization efforts. The final rule — known as the
“ambush election” rule — passed on a 3-2 NLRB vote. It takes
effect April 15, 2015, and will require companies to provide a
host of information to union organizers within a week of
Try something new
receiving a union petition, including names, addresses, and
contact information of eligible employees.
Under the new rules, a labor union could plan its organizing
strategy for months and then spring an election on an
employer in as few as 10 days as opposed to a many weeks.
The rule also greatly limits the time between when a petition
is filed and when a union election is held. We believe these
and other changes unfairly restrict the ability of companies
to fully inform their employees about what unionization will
mean to employees and the business. To read the final rule,
please click here .
Keep an eye out for more information on this issue from the
Arizona Restaurant Association’s government affairs team,
100+ drinks, one machine.
and for questions please contact Chianne Hewer .
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What you may not realize is that you need to start
reporting health care coverage a full year sooner
Rx for Reform:
that – whether you’re offering it or not. Beginning
What you need to know (and do) now
this month, employers will need to start reporting
on a wide range of data in order to be compliant
with the ACA. With 2015 officially here, time is
running short to determine which of the ACA
mandates affect your restaurant.
If this comes as a surprise to you (as it will for
The federally mandated Affordable Health Care
many), the National Restaurant Association has
Act (ACA) is now the law of the land – having
launched Health Care HQ , a centralized health
withstood both court battles and an election
coverage marketplace and hub for changes and
cycle. Experts agree that the hospitality industry
clarifications handed down from the government.
is one of the most difficult to implement reform
Use the NRA Health Care Toolkit here to help you
due to the mobility, seasonality and pay
navigate these new requirements and remain in
structures of our workforce.
compliance for the coming year and beyond.
AT A GlANCE The Treasury Department and IRS released regulations in February and March to explain the ACA’s employer man- date and employer-reporting requirements. Employers should consult these rules as they take steps to comply with the law. The regulations are available as a link from Restaurant.org/Healthcare or in the Federal Register , “Shared Responsibility for Employers Regarding Health Care Coverage” (Feb. 12, 2014), and “Information Reporting of Minimum Essential Coverage” and “Information Reporting by Applicable large Employers” (March 10, 2014). THE AFFoRDABlE CARE ACT
The Affordable Care Act: Next Steps for Restaurateurs Are you considered A lArge employer under the AcA? if so, get reAdy. Big chAnges Are heAded your wAy.
Who’s covered by the employer mandate? The employer mandate will require certain employers to offer health care coverage to full-time employees and their dependents or face possible penalties. The mandate will eventually apply to businesses with 50 or more full-time-equivalent (FTE) employees, but in 2015 transition relief is available to qualified employers with 50 to 99 FTE employees. • penalties start in 2015 for employers with 100 or more Fte employees who fail to offer coverage to “substantially all” full-time employ- ees and their dependents. (“Substan- tially all” means the employer offers coverage to at least 70 percent of full-time employees in 2015. This ramps up to 95 percent of full-time employees in 2016.) • penalties start in 2016 for employers with 50 to 99 Fte em- ployees. Some caveats apply (see box on page 3 for transition rules).
• more information on how to calculate whether your business is covered by the employer mandate is available at Restaurant.org/Health- care . Keep in mind that you may need to combine employees for businesses under “common control” and that you’ll need to know both the number of full-time employees and hours of service for part-time employees to come up the “full- time-equivalent” figure. Seasonal workers are included in the large- employer calculation, whether full- or part-time. Some employers may qualify for a “seasonal worker exception” in cases where seasonal workers push the business over the FTE threshold for four calendar months or less. to Whom must coverage be oFFered? To avoid penalties, applicable large employers must offer health care coverage to full-time employees and
their dependents starting in 2015. The ACA defines full-time as an average of at least 30 hours of service in any given month. For administrative simplicity, 130 hours of service in a calendar month will be considered the monthly equiva- lent of 30 hours of service a week. Dependents are children who have not yet reached the age of 26. Dependents do not include spouses. • new employees are considered to be full-time if on their start date they are reasonably expected to average 30 hours of service a week or 130 hours of service per calendar month. Whether an employer’s determination of the employee’s full- or part-time status is reasonable is based on the “facts and circum- stances.” Factors to be considered include, but are not limited to, whether the employee is replacing an employee who was or was not a full-time employee, the extent to which employees in the same or comparable positions are or are not full-time employees, and whether the job was advertised, or otherwise communicated to the new hire or otherwise documented (for example, through a contract or job descrip- tion), as requiring hours of service that would average 30 (or more) hours of service per week or less than 30 hours of service per week. • assessing the status of vari- able-hour and seasonal employees. While many restaurant employees clearly work either full- or part-time hours, the distinction may be less
T he Affordable Care Act has been in the national spotlight since the law was enacted in 2010. But many of the ACA’s biggest changes for employers are just starting to unfold. The law’s employer mandate begins to phase in for “applicable large employers” starting Jan. 1, 2015. The mandate will require covered businesses to offer health benefits to full-time employees and their dependents or face possible penalties. The ACA will have a particularly profound impact on restaurants because of the nature of the industry. Restaurants are highly labor-intensive, with low profits per employee, significant numbers of part-time employ- ees, and a young and mobile workforce. Understanding the ACA and “operationalizing” it in a restaurant business will be challenging. The Treasury Department and Internal Revenue Service published final regulations in February and March that provide the rules by which employers will comply with the employer-man- date and employer-reporting requirements.
But even with these employer regulations in place, deciphering the ACA will be difficult. The rules are complex and new IRS reporting requirements in particular are likely to be onerous. Deadlines are looming. Starting Jan. 1, 2015, many employers will face potential penalties for failing to offer health plans to full-time employees, and millions of businesses will have to start tracking data on their employees and health-care coverage offers, in preparation for filing ACA-required reports with the IRS and employees in early 2016. The National Restaurant Association offers its mem- bers information, resources and tools at the NRA Health Care HQ at Restaurant.org/Healthcare . Visit to: • stay up to date on the ACA and how it applies to restaurants. • join the NRA in advocating for change. • get tools to notify your employees about the law. • find health insurance products for your restaurant and your employees.
WHAT yoU NEED To KNoW. WHAT yoU NEED To Do.
leArn find out how the law affects your restaurant company. Join the nrA in advocating for change.
notify get tools to notify your employees about the law.
mArketplAce find health insurance products for your restaurant and your employees.
The AffordAble CAre ACT: NexT sTeps for resTAurATeurs | restaurant.org/healthcare
with the IRS and statements with employees in early 2016, based on data tracked in 2015. The paperwork requirements are part of the new Sections 6056 and 6055 of the federal tax code. • section 6056 requires businesses that employ 50 or more FTE employ- ees to certify whether they offered minimum essential coverage to full-time employees. (See “Data Track- ing” sidebar for some of the data points employers will be required to provide under Section 6056.) • section 6055 requirements apply to any entity that offers a health plan, such as self-insured employers and health insurers. These reports will tell the IRS who was enrolled in coverage and for what months. large businesses will face two types of penalties under the ACA’s employer mandate. • For failing to offer coverage. Penalty A applies when a large employer fails to offer minimum essential coverage to “substantially all” of its full-time employees. Penalty A can run up to $2,000 per year per full-time employee, minus the first 30 full-time employees. The penalty kicks in if any full-time employee gets a federal tax subsidy to buy a health plan through a government-run exchange. • For offering coverage that’s unaffordable or inadequate. Penalty B applies when the minimum essen- tial coverage a large employer offers is not affordable or fails to meet minimum-value standards. Penalty B is $3,000 a year for any full-time employee who receives a federal tax subsidy to buy a health plan through a federal or state exchange because their employer’s plan is not affordable or adequate. What are the penalties?
read the rules: Transition relief for 2015 T he Treasury Department and Internal Revenue Service offer some employers targeted “transition relief” for 2015 (and part of 2016, for non-calendar-year plans). Employers should consult the employer-mandate rules in the
dAtA trAcking will Be eXtensiVe U nder a new Section 6056 of the Internal Revenue Code, employers with 50 or more full-time-equivalent employees must file an annual report with the IRS and provide annual statements to employ- ees starting in early 2016, based on data tracked in 2015. Employers with 50 to 99 FTE employees must report for 2015 even if they are not
Feb. 12, 2014, Federal Register , for details. Some topics addressed in the transition rules:
• determining large-employer status — look at your business’s employment levels for any consecutive six-month period in 2014 to see if you’ll be considered an “applicable large employer” for 2015. Starting in 2016, large-employer status is based on employment levels for the full previous calendar year. Note: Employ- ers can’t use an abbreviated period for 2014 to qualify for a “seasonal worker exception” to the employer mandate for 2015. • dependent coverage — For 2015, a large employer will generally not face penalties for failing to offer coverage to dependents of full-time employees if the employer can show he or she is taking steps toward providing such coverage. Employers who offered dependent coverage in 2013 and 2014 cannot drop coverage to take advantage of this transition relief. • other — Regulations also explain transition relief for employers with non-calendar-year plans, including ensuring that penalty relief extends into part of 2016 for non-calendar-year 2015 plans; and explaining the conditions under which penalties do not apply for months in 2015 before the 2015 plan year begins.
• 70 percent offer — For 2015, businesses with 100+ FTE employees can avoid the ACA’s Penalty A (see page 4) by offering health plans to “substantially all” full-time employees, defined as 70 percent of full-time employees for 2015 and 95 percent after that. • delayed mandate/penalties — For 2015, businesses with 50 to 99 FTE employees can avoid the employer mandate and penalties if they meet certain conditions, including not cutting back employees’ hours or positions to keep the business under the 100-FTE threshold. • look-back measurement method — For 2015, employ- ers who use the ACA’s optional “look-back measure- ment method” to measure the full- or part-time status of variable-hour and seasonal employees can pick a six-month measurement period that begins no later than July 1, 2014, to determine an employee’s status for purpose of coverage offers during a “stability period” of up to 12 months in 2015. (Note: For purpos- es of coverage offers, seasonal employees in positions working six months or less in a year generally aren’t considered full-time employees.)
required to offer coverage or pay penalties. Here’s a sampling of some of the data that employers with 50 or more FTE employees will be required to provide. Consult the Federal Register (March 10, 2014) for full details. The below data must be compiled by month and by tax ID/ Social Security number of the employee and dependents: • whether employee is eligible for offer of minimum essential coverage • total number of employees • number of full-time employees • months when minimum essential coverage was available for each employee • premium contribution by month, by employee • whether employee is covered under one of the employer’s plans • whether employer had no employees with no hours of services credited (e.g., seasonal employees) • whether minimum essential coverage was offered to: > employee only > employee and employee’s dependents only > employee and employee’s spouse only, or > employee, employee’s spouse and employee’s dependents • whether coverage was not offered for the month because > employee in limited non-assessment period > employee was not full-time > employee was not employed by large employer for that month • whether coverage was offered to the employee even if the employee is not full-time • whether the large-employer member used an affordability safe harbor (W-2, rate of pay, federal poverty level) to determine whether coverage was affordable.
Caution: This list does not provide full information on each topic. The transition rules are extensive. Consult the Federal Register (Feb. 12, 2014) for the full set of regulations.
look-back measurement method, a seasonal employee is “an employee who is hired into a position for which the customary annual employment is six months” or less. What reports Will employers be required to File? To help enforce the employer and individual mandates, and to adminis- ter subsidies, the ACA sets massive new reporting requirements for many businesses. Employers must file their first information returns
can pick a measurement period of three to 12 months to assess a variable-hour or seasonal employee’s status. Based on the employee’s hours of service during the measure- ment period, the employee is treated as either full- or part-time (for purposes of health-care coverage offers) for a corresponding stability period, regardless of the employee’s hours of service during the stability period. The stability period must be at least six consecutive months and no shorter than the length of the measurement period. NoTE: For purposes of the
clear for variable-hour and seasonal employees, whose hours and sched- ules fluctuate. To help large employ- ers know who is eligible for health care coverage offers under the ACA starting in 2015, and to avoid month- ly determinations of employee status, Treasury/IRS regulations give large employers an alternative option for assessing the full- or part-time status of variable-hour or seasonal employees. This optional method — called the “look-back measurement method” — is complex but may be useful for restaurant operators. In brief, large employers
Restaurant.org/Healthcare | THe AffoRdAble CARe ACT: NexT sTeps foR ResTAuRATeuRs
by John J. Balitis
4 mAy 2014
the AffordABle cAre Act: neXt steps for restAurAteurs | restaurant.org/healthcare
it’s the law
The Arizona Restaurant Association reminds you to stay compliant with labor laws and reduce your risk of fines (or worse lawsuits) by getting up-to-date Labor Law Posters. We take the labor out of getting all the labor posters with our poster set. Set contains English and Spanish posters. Click here to order your 2015 set. Members $ 25 and Non-members $35 Stay compliant with labor laws: get the poster
Be sure to display a poster in each business location where employees can easily see it and read it.
Arizona Minimum Wage Poster Change
New Poster Required
The Arizona Minimum Wage poster has been updated to reflect an increase to the state’s minimum wage... Read More
Arizona Unemployment Insurance Poster Change
New Poster Required
Arizona state poster updated to revise Unemployment Insurance. The Arizona Unemployment Insurance... Read More
on the menu
Eat up: 2015 Culinary Forecast predicts menu trends
What’s Hot 2015 Culinary Forecast Ramen rules. Insects are out. Sliders and tiny burgers are gone too. So says the National Restaurant Association’s (NRA) 2015 Culinary Forecast, a survey of nearly 1,300 professional chefs – members of the American Culinary Federation (ACF) – that aims to tell us what will be popular in the year ahead, as well as what will be falling off the menu. In the forecast of the hottest 200-plus culinary trends for 2015, the NRA included such shifts as the increased use of new meat cuts or artisan butchery, number six on the list. Reducing food waste has also returned to the list, this time at number nine. Still, sustainability and sourcing concerns continued to dominate the 2015 list, as they have for the last three years. Local sourcing took the top two spots, followed by environmental sustainability (number three), natural ingredients/minimally processed foods (five), hyper-local sourcing (seven), sustainable seafood (eight) and farm/ estate branded ingredients (10). “As consumers today increasingly incorporate restaurants into their daily lives, they want to be able to follow their personal preferences and philosophies no matter where or how they
Locally-sourced meats and proteins
Healthy kids meals
Top 10 Food Trends
New cuts of meats
Food waste management
Farm/estate- branded items
choose to dine,” says Hudson Riehle, senior vice president of the National Restaurant Association’s research and knowledge group. “So, it’s only natural that culinary themes like local sourcing, sustainability and nutrition top our list of menu trends for 2015. Those concepts are wider lifestyle choices for many Americans in other aspects of their lives that also translate into the food space.” Restaurant menus will likely be shaped by culinary trends and consumer preferences, most of which are what Annika Stensson, the National Restaurant Association’s senior manager of research communications calls “umbrella trends that grow over a decade or more.” While “true trends gain momentum and evolve over time,” Stensson still encourages operators to “look at the growing trends and see how they can be adapted to their concept.”
See what’s hot, what’s not .
One of the most prominent industry buzzwords over the
last decade, healthy appears in various forms on today’s
menus, as consumers reach beyond the basic term to also
Consumers Healthy Eating Trend Report
consider low-fat, natural, and organic dishes on menus.
Inspiring the change is the public’s growing awareness of
healthy attributes, and consumers are subsequently leaning
on restaurants to go beyond adding a side salad to create a
That’s according to Justin Massa, co-founder and CEO of
Food Genius , a provider of menu data analytics, which
released its 2014 Healthy and the “Health Halo” this month.
The report investigates the terms, attributes, and language
used by menus to spread the healthy message, as well as
which ingredients and cooking styles consumers are
responding favorably to.
The thrust of the findings, Massa says, is that restaurant
operators need to be explicit on their menus about their
wholesome offerings. “Don’t just offer items that incorporate
healthy ingredients,” he says, “but also specify their healthy