All over television news and the Internet there are disclosures of major corporations having been hacked, with data compromised for millions of their customers. Once the news is out, the victim company’s CEO goes on television to apologize and, of course, to promise to do better. Ads appear in newspapers, and mass emails are sent to customers to explain how this will never happen again. Across the board price discounts are offered to bring customers back.
Those mandatory 18% tips on checks for large dining parties will get more expensive for restaurateurs starting January 1, 2014. Until now, these charges have been classified as tips for income tax purposes, and left to employees to report as income. Employers have been able to take an income tax credit on Medicare and Social Security payments that they make on employees’ reported tip income. Under an IRS Ruling taking effect next month, the mandatory tips will be treated as service charges, and included as employees’ regular wages for calculating withholding tax and pay rates. As a result, employers will no longer be eligible to take an income tax credit, may have to pay increased overtime rates, and will have more complicated payroll accounting.
Under the Affordable Care Act (ACA), employers with more than 50 employees will be required to provide health care for their full-time employees or face penalties. The ACA particularly affects dining, hospitality, and retail establishments, many of which employ more than 50 employees (and, due to traditionally high turnover rates, many do not provide health insurance). But for any business affected by the ACA, the task of complying with the new law can be daunting.