# Owners won't pay overtime



## sherman452 (Apr 21, 2013)

The owners won't pay my overtime or that of the staff (BOH or FOH).  They instead have, historically, paid the staff in cash for the over hours.  I did not realize this was their system when I signed on and I, of course, do not agree with it and have told the owner that this is not acceptable to me.  Their only options are: Salary, pay my overtime or I walk.

This restaurant is in NY state.

This is illegal.

Just looking for similar stories, if anyone has them.


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## lagom (Sep 5, 2012)

Are they paying you under the table for the OT? Or are they simply paying cash?


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## grande (May 14, 2014)

Seems pretty common in NY/NE. I live in Seattle, and have one friend from Jersey, one from Boston, and one from NYC, and they all have stories about places not paying OT. Various systems were mentioned, such as just not paying past 40, paying OT at regular rates, etc.

A little story, I had a problem where my employer was adjusting my time clocks. When I left I called and reported it to L&I. Their investigation was to callthe restaurant and ask the bartender if this was going on. So, best of luck.


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## youngchefkarl (Dec 12, 2013)

Who cares? Just take the cash.


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## grande (May 14, 2014)

I would take the cash if it was time and a half.... still illegal, though. Plus, you can't do anything if they screw you. And if you pitch a fuss and then go along with it, you're kind of in their pocket. You know, knowlege of illegal activities and what not.


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## youngchefkarl (Dec 12, 2013)

Grande said:


> I would take the cash if it was time and a half.... still illegal, though. Plus, you can't do anything if they screw you. And if you pitch a fuss and then go along with it, you're kind of in their pocket. You know, knowlege of illegal activities and what not.


With all due respect you're being paranoid. None of that would fall back on you. Cash is better for you, and the business, for obvious tax reasons.


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## grande (May 14, 2014)

Legally it would not; how involved do you want to be with someone who can't run a business profitably without breaking the law?
You're right that cash is better- in some ways. But, if they only pay cash for overtime, they benefit more than you do.


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## grande (May 14, 2014)

I guess I should add that in this business we tend to have an easy come- easy go approach to labor laws- at lesst I have seen that numerous times- but that waiving your legal rights as an employee is never, in my opinion, a good long term decision, even if you benefit in the short term. A good example is, what if you were badly burned working for cash off the clock? Your employer has deniability that you were working, and therefore can contest whether it's covered by L&I. Having been on the management end of several L&I claims, I can tell you that if a restaurant doesn't have to pay something, they aren't going to.


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## chefbuba (Feb 17, 2010)

Are they paying you time & half for all OT?
If you are getting paid for all hrs worked, why sweat it?
When I did movie work, we would sometimes work for foreign production company's, they alway paid cash less 10% on the spot on pay day or full hrs on payroll at approx 40% taxes.


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## panini (Jul 28, 2001)

@Sherman452,

Chef, I would at least bring it up. The last thing you want at the end of the year is a 1099 for the cash they paid you.


youngchefkarl said:


> With all due respect you're being paranoid. None of that would fall back on you. Cash is better for you, and the business, for obvious tax reasons.


If you accept the cash then you kind of are a part of tax evasion.


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## chefedb (Apr 3, 2010)

Tell them you will speak to someone at Dept. Of Labor and Dept. of Internal Revenue


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## beastmasterflex (Aug 14, 2013)

youngchefkarl said:


> With all due respect you're being paranoid. None of that would fall back on you. Cash is better for you, and the business, for obvious tax reasons.


Tell ya mutha to stop setting a bad example.


panini said:


> If you accept the cash then you kind of are a part of tax evasion.


That's exactly what it is... If they ask you to do something illegal once it will probably happen again. Although as you say they may just stick you with a 1099... not illegal but I feel like that would upset me more, especially if they didn't pay me time and a half.


chefedb said:


> Tell them you will speak to someone at Dept. Of Labor and Dept. of Internal Revenue


= Fired


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## grande (May 14, 2014)

I'm curious, guys: the OP seems set on what he's doing, apart from advice, has anyone else dealt directly with this?


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## fablesable (Oct 11, 2014)

@Sherman452 


> Their only options are: Salary, pay my overtime or I walk.


I am always of the frame of mind that I can work anywhere doing what I do with my experience. Therefore if I feel uncomfortable with something that company/owner is doing whose ramifications from taking that cash means possible issues later with the government or otherwise (and with that attitude of take it or leave)........I would tell the owner "that if what he is offering is so good then shove it up his a$$ since good things never hurt and proceed to walk out the door wishing him well with the taxman as I will be reporting him asap! Screw him if he thinks to take advantage of good hard working people for his own immediate monetary gain and for thinking he's untouchable!"

Now go look for an awesome opportunity with a company that appreciates you for what you bring to the table and pays you accordingly


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## chefwriter (Oct 31, 2012)

Go talk to the necessary government agencies. I am in the Capitol District upstate and have dealt with the IRS, NYS tax dept, and Labor depts. They will be more than happy to explain what ever you want to know without needing to know who you work for. 

NY is very serious about these issues. You are correct in demanding salary, overtime pay or walking. There is no reason to be caught up in some else's deceitful behavior. I suspect they are most likely engaged in other accounting inaccuracies and all of it will come back to bite them. The government has teams of people trained to spot these issues. 

A good accountant can help them with payroll issues and perhaps a reworking of the schedule would help to cut down on the need for overtime. But if some one works it, they have to pay it. 

In the small restaurant, too much overtime may indicate the need for another employee, but that can be best established after a review of kitchen production needs and FOH staffing needs. 

I'm also very curious as to where you are located. 

 Fwiw, I've also found that employers who fudge on pay issues, tend to be the same ones who overlook or fudge on other oversight issues. The ability to make a profitable restaurant without fudging is one of the reasons restaurants are notoriously difficult to run.


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## youngchefkarl (Dec 12, 2013)

beastmasterflex said:


> Tell ya mutha to stop setting a bad example.
> 
> That's exactly what it is... If they ask you to do something illegal once it will probably happen again. Although as you say they may just stick you with a 1099... not illegal but I feel like that would upset me more, especially if they didn't pay me time and a half.
> 
> = Fired


Yeah I work with many guys that accept cash for overtime and not have any issues so watch your mouth.


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## tweakz (May 10, 2014)

When you work over 40 hours a week for meager pay; do you really want to fall into a higher tax bracket? I doubt I've ever worked for someone that did things totally legal. 

My current employer exposed me to a grill cleaner that said 'read the msds before using this product'. He failed to provide the msds after I requested it 4 times in 2 months. I had a chronic cough for two years and woke up with fluid in my lungs ~5 times. I finally found the msds online and told him what it did to 1-2% of the population (caused pneumonitis or pulmonitis) and how I was one of that small percentile. I asked him to revert back to the original stuff we used and he said it was  corporate decision and he could do nothing about it.

-That's just a small example of the illegal stuff that goes on, and what I've been through with this pos boss. Most people prefer cash. You're just going to make a bad name for yourself if you cause an upset. I'd suggest you either leave benevolently, or cave in and accept things. It's not like they're taking a cut of your tips like Mario and some other celeb chef were doing.


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## spoiledbroth (Sep 25, 2014)

I promise if you burn your employer you're going to have a hell of a time getting a position anywhere near there for a while. Restauranteurs talk !


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## Iceman (Jan 4, 2011)

WOW.


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## grande (May 14, 2014)

@tweakz your example is a great example of how people not doing things legit is bad for the employee; just because the problem already exists, doesn'tmean we have to perpetuate or encourage it.
The worst part is, middle management, like sous chefs and lead cooks in corporate places, often have to enforce questionable corporate policies.


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## chefross (May 5, 2010)

In our little neck of the woods we have business owners who tabulate your overtime hours during the summer months, and save this overtime money to pay you in the winter slow months.

One owner I know will take this OT money and pay the person at regular wages only.

Highly illegal.

Also, when you are paid cash under the table, you are, in effect, cheating the government of taxes.

Happens all the time. Is this right?


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## chefedb (Apr 3, 2010)

I may be fired but you could be put out of business


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## tweakz (May 10, 2014)

Chefross said:


> Also, when you are paid cash under the table, you are, in effect, cheating the government of taxes.
> 
> Happens all the time. Is this right?


Our president signs a 70 billion dollar (and this is just a single example) plan while we're in major debt to help a group of racist enslaving genocidals illegally occupy land (and don't argue this if you haven't read the root texts of what keeps them together or segregated), and we're the ones cheating? Please explain the difference between government and organized crime. Stealing is stealing, and compulsory taxes is what slavery evolved into (the best slaves are the ones that think they're free).

Sure; get a restaurant closed where other employees were happy. Say hi to them in your next job then bye when it gets to the higher up what you did to your last employer. If you want to keep a job in food service and stay local; you have to be somewhat compliant. When my employer tells me to do something I know is immoral (like burning off a char-broiler and giving students headaches from carbon monoxide); I just keep my mouth shut and clean it the right way, or tell him no. I got an incident report filed for it, and requested the procedure he was demanding us to follow in writing which he refused to provide. I also asserted that the cause of the incident was improper procedure. I've had him threaten my hours, threaten to change my shift, etc. -Hasn't happened yet. Never seen anyone get fired for not obeying a boss on a procedure or order like that, but I have seen someone fired for doing what the boss tells them when it went against written company policy. When it comes to your word against theirs -they'll always win.

Also if you're going for the moral high ground; are you also working the whole time you're on the clock, and not permitted a break, never late from break, you don't use your phone on company time, and you follow all the procedures they give you, and do what you're told? You never take more than you're allowed? The moral high grounders I've seen at work are often the biggest hypocrites. Example: new building; people are getting chapped lips from being there. Co-worker grabs a pack of chap stick off the counter. Cashier pesters him about it being stealing and gets him to return it, then is seen later standing around in the busy kitchen texting on her phone when she should be working. I ask her why she's stealing from the company and she acts like she has no clue.


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## chefboyog (Oct 23, 2013)

Cash is King in my book!

What is illegal about it specifically which law is being broke? They are not paying 1.5x rate for the 45th hour and 2.5 on stats? Thats the law in my area.

If the hours are recorded and the pay documented is the employer not allowed to pay cash? Maybe they cant use two systems?

Direct deposit, check or cash whats the difference it is the employees duty to declare their own earnings. The employer does their own accounting. Should be provable by t4 I suppose for a full time job, but private contractors and some part time will not get the paperwork just cash. If you fail to report the cash as earnings you are cheating taxes, not the employer.



Higher tax bracket scare is the biggest myth I see made by financially illiterate people. I see so many cooks say they will take less hours because they think they will just lose it in taxes if they work more. What a joke. Id love to be in the highest tax bracket. I suppose thats why I work 3 jobs. Someday.....

Good luck but have your facts when you go accusing them. May be right I just don't know laws in NY.


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## sherman452 (Apr 21, 2013)

Here's some literature directly from the ny.gov labor page...

Pretty much explains exactly what non-exempt employees should be expecting from their employers and what employers are obligated to pay to the employees.

http://labor.ny.gov/legal/counsel/pdf/overtime-frequently-asked-questions.pdf

*"Overtime Frequently Asked Questions (FAQ) *

The New York State Minimum Wage Orders contain the State's overtime requirements. These requirements are in addition to those required by federal law, including the Fair Labor Standards Act (FLSA). Most employees must receive overtime pay at the rate of 1½ times their *regular *rate of pay for all hours worked over 40 in a workweek. Certain residential employees must receive overtime pay at the rate of 1 ½ times their regular rate of pay for all hours worked over 44 in a workweek. "

Just a side comment- the pay period in question that I am referring to was over 21 hours of overtime. At my current hourly rate, that is quite a significant amount that I lost, taxes and other deductions taken into consideration.


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## beastmasterflex (Aug 14, 2013)

Owners are probably thinking about how you fired someone and then basically took their paycheck in overtime, if they were full time that is and assuming you make more than the terminated employee. Were you working under overtime before you lost that member of staff?


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## chefboyog (Oct 23, 2013)

Ok I see. The problem is they aren't paying the proper rate for overtime. Id quit. On the other hand many salaried people do this all the time, for less in the end. Hard situation there.

Can you refuse the overtime, realistically?


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## fablesable (Oct 11, 2014)

I am with Iceman......WOW

Some people here need to give yourself a good shake. The old adage of just because one jumps off the bridge that means all of us should?? applies here

@youngchefkarl, @tweakz, @spoiledbroth.....I am both shaking my head and slapping my forehead saying doh!! REALLY??? Wildebeest much?? lol

As for the rest of the sound advisors, good on you!

This may happen a lot in our industry or even other industries AND the government, however this does not mean we need to join the ranks of "be like us or suffer the consequences" wildebeest mentality. I can understand how @tweakz feels with the "hypocritical moral high grounders" however just that is a oxymoron isn't it because then that person is not a MORAL person just an a$$.

I have had a couple company come at me like what is happening with @Sherman452 and I can say that I have successfully dealt with these companies fairly and with sound advice and wisdom to set them on their ways. Do not threaten those you do not know is a good rule of thumb to live by. One company got shut down as a result of some extremely bad work and wage issues due to a heads up from yours truly. The other got an advisement from the government to clean their act up as well as a surprise audit the following year. They were wise enough to listen to the advice of cleaning up from the government after I had left and reported them. @SpoiledBroth Am I ashamed of telling the truth and making people stand up to theirs....NO. Am I worried about what the wildebeests (aka: supposed restaurateus) have to say about me to others whether or not to hire me.....NO. Because to be a professional and to be a leader you take it upon yourself to set an example of what good leadership and sound business practice looks like. If one wants to be like all the others....your choice. If someone wants to stand in the truth which goes against the grain nowadays....their choice.

End rant ;-)


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## spoiledbroth (Sep 25, 2014)

I didn't condone anything, just telling it like it is. If you have a good food scene and want to stay you never deficate where you eat. You may disagree but I can point to a number of great people who have up and left because they burned the wrong bridge. God forbid someone offer a cautionary tale. (Rolling my eyes).


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## tweakz (May 10, 2014)

Imo there are better ways of dealing with bad employers than putting co-workers out a job they choose to have.


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## fablesable (Oct 11, 2014)

@tweakz yes, however from the place that I shut down....four out of the nine that worked there came with me and now have very happy healthy careers in the industry. Two went on to pursue other interests and three were part of the problem not solution so good riddance. The other place that had the government on their butts....two of the employees (my co-workers) had injured themselves at work and could not claim for it as they were getting paid cash for that time worked and no record of them working. With those injuries not being able to heal properly they were going to lose their jobs all because of a shady corp. Now they are paid properly with the benefits they deserve and the company is actually doing better off then they were before as their productivity and retention went way up as a result of a re-arrangement of priorities due to someone standing for the truth. So did I as a leader have my co-workers backs.....yup. Did I put negative employers out to lunch (could't help the pun)....check. Just sayin /img/vbsmilies/smilies/lookaround.gif

@SpoiledBroth made me giggle to picture you rolling your eyes....good mental pick....lol


> I promise if you burn your employer you're going to have a hell of a time getting a position anywhere near there for a while. Restauranteurs talk !


However if I may.....this statement does not come across as cautionary so much as threatening. Usually cautionary goes something like...."Just be careful that when you decide to leave try not to burn your bridge if possible. Restaurateurs talk /img/vbsmilies/smilies/smile.gif

I agree with you on the no bridge burning however if I have to bridge burn then C-4 gives a pretty bang for your buck...hehe


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## beastmasterflex (Aug 14, 2013)

chefedb said:


> I may be fired but you could be put out of business





Fablesable said:


> Did I put negative employers out to lunch (could't help the pun)....check.


How does being vindictive improve your own situation?


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## fablesable (Oct 11, 2014)

@beastmasterflex

I hear you and it would be vindictive if that was the intent which it wasn't. I gave that employer ample opportunity to change his mind and the way he was treating us. He CHOOSE not to change and in good conscience I could not leave the place and fellow co-workers (friends) to have to fend for themselves if the leader was leaving. That is not the way I function. These were good hardworking people (most of them) and deserved better. I am pretty sure that you would be a happy person knowing you were saved from working for such a tyrant that did not care for your well being nor pay check. Someone was going to get seriously hurt and not be able to claim for it nor pay for it themselves. Vindictive?? I don't think so. But that is a point of view and I can accept it.

As for improving my situation......I learned what I truly wanted and needed to better my experience as a chef. I went on to better businesses learning tons from great chefs who were solid leaders as well as own, build and sell my own company with partners that would back me anytime I wish to own another restaurant.


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## beastmasterflex (Aug 14, 2013)

Fablesable said:


> @beastmasterflex
> 
> I hear you and it would be vindictive if that was the intent which it wasn't. I gave that employer ample opportunity to change his mind and the way he was treating us. He CHOOSE not to change and in good conscience I could not leave the place and fellow co-workers (friends) to have to fend for themselves if the leader was leaving. That is not the way I function. These were good hardworking people (most of them) and deserved better. I am pretty sure that you would be a happy person knowing you were saved from working for such a tyrant that did not care for your well being nor pay check. Someone was going to get seriously hurt and not be able to claim for it nor pay for it themselves. Vindictive?? I don't think so. But that is a point of view and I can accept it.
> 
> As for improving my situation......I learned what I truly wanted and needed to better my experience as a chef. I went on to better businesses learning tons from great chefs who were solid leaders as well as own, build and sell my own company with partners that would back me anytime I wish to own another restaurant.


Oh my bad, I didn't realize that they gave you power over their lives to make decisions on their behalf.


Fablesable said:


> I agree with you on the no bridge burning however if I have to bridge burn then C-4 gives a pretty bang for your buck...hehe


No, you're right I misread that's not vindictive at all.


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## fablesable (Oct 11, 2014)

@beastmasterflex lmao...oh come on now you troll....don't be looking for pretty sentiments from me...lol *blush*/img/vbsmilies/smilies/blushing.gif


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## beastmasterflex (Aug 14, 2013)

lol its true I'm about bored of this anyways


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## phaedrus (Dec 23, 2004)

If labor and tax laws are annoyance that they avoid how do they feel about health and sanitation laws?  Cash is nice I guess but I would pass on criminal activities if it were me.


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## chefross (May 5, 2010)

tweakz.............

"Also, when you are paid cash under the table, you are, in effect, cheating the government of taxes.

Happens all the time. Is this right?"

I don't recognize anything that I said that makes me on the moral high ground.

Just telling it like it is. 

And I would add to YOUR example by simply pointing out the only about half of our country's population pays their taxes as well.

Yes tweakz, you are correct in your other examples as well, but, as I wrote, I only pointed it out.


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## panini (Jul 28, 2001)

This might be the last thing thrown out there in this thread. When you get to be my age you really start to look at things like social security benefits. You won't receive your max payout if you haven't given enough. That cash under the table is not going to help you with SS. I'd rather have it when I don't want to work then have it while I am. This is one business where you break down early, prepare for it.

The most strenuous thing I want to do in my retirement is to occasionally clean some fish./img/vbsmilies/smilies/biggrin.gif


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## pete (Oct 7, 2001)

I guess I'm lucky as, with all the places I've worked, high-end, sports bar, independent, corporate, small place, huge hotel, I've always been paid correctly.  Never asked to be paid under the table. Would never accept to do that anyway.  Besides the legal bind both you and your employer can get in, a great point, brought up earlier, is what happens if you are injured on the job.  What's to keep your employer from claiming it didn't happen there.  There's no record of you being at work and working.  You could be stuck with huge hospital bills.

As to this fear mongering of not being able to get a job if you "rat" out your employer; that might happen in some little rink-dink town, but I've worked in New Orleans, Atlanta, Chicago and numerous other places and believe me, most owners and chefs probably already know of an employers "bad habits" and wouldn't hold it against you for trying to get what you are legally owed.


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## tweakz (May 10, 2014)

I don't plan to retire. I get ~1/3 of the year off already and it's rough. Everyone is sore when they come back from summer break. I've also worked in a nursing home, and am not going there. One of the women I work with is 75, and way outperforms the younger people at her job (cashier).

Injuries can happen at home as well. Workman's comp blows. Ask anyone who's gone through it about all the crap they put you through. The money comes and goes as well, and is not infinite.

The under the table jobs I've had were much safer than the legal ones, and bosses much more understanding of injuries and willing to work with your limited capacities.

Pete's got a great point about being in the larger cities. Not all of us have all those options. I'm terrified of bees and heights which hinders me from some jobs.

As far as tax brackets and stuff goes; some of us making below the poverty level would get all we make back, or just not file. There's also garnishments, and child support payers who probably wouldn't work overtime if not offered cash.

I don't see the cash vs 1.5x pay being a big evil thing the owner is doing, but we probably don't know the whole story either? I know I'd be pissed if I had that opportunity and someone blew it for me and my team. If there's better out there; why blow it for others? -Just move on.


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## panini (Jul 28, 2001)

@tweakz

If you are being paid cash for hours worked, It's not only the employer that owes the taxes, they only owe half plus penalties. it's you who owe the other half plus penalties and interest. Can't claim ignorance to the irs.. And trust me they will come after you after the employer.


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## Iceman (Jan 4, 2011)

*WOW* ... (still and again).


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## chefboyog (Oct 23, 2013)

Im with iceman on this one wow is right. I think you're on the wrong forum tweaks.


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## panini (Jul 28, 2001)

*WOW!*


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## Iceman (Jan 4, 2011)

I think it's cool that someone both reads and, I guess, finds what I say as interesting. However, since I haven't extrapolated on my thoughts, you shouldn't think that you are necessarily aware of what they are.

*LOL*. I used _"extrapolated"_ in this conversation. ... Crack me up.​


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## chefboyog (Oct 23, 2013)

Haha

Thanks Iceman. Cant we agree on a one word statement? Tell me your thoughts please! 
WUT!
/img funny gif.jpg / end html#inappropriate


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## tweakz (May 10, 2014)

Sorry; I tend to be self educated since about the time I could read. Social Studies would have been far more interesting if I'd known then what I know now, and teachers were allowed to present certain things. Most people probably haven't heard of James Ennes (Captain) and what happened to his crew on the USS Liberty; or why, David Cole and why he's hiding for his life, Norman Finkelstein and why he was a professor fired from a college for a piddly reason, also Dr. Tony Martin, or why we never heard of Tesla in school. Bobby Fischer -the greatest Chess player of all time (arguable) is marginalized for their position, and Jimmy Carter also gets little press. How many have read about Christopher Columbus from the biography of a person that was with him? How many have read Deuteronomy and understand that Philistine translates to Palestinian?

Anyway, the point of my previous post is that I don't feel I owe anyone for simply being born. I likewise don't feel you owe me for me being me. Paying taxes is submission, and I'm not saying I don't. I don't use the system to try to coerce my employer into submission. I would rather see a competitive work force that relies on their performance and usefulness rather than laws. As a good worker: I don't want to provide my exceptional work for a butthole.  Sadly most are conditioned to work for 'the man' through our schooling and think they have the right to bully their employer instead of levy their value.

A problem I've noticed is that people who make good money will run a business at a loss to absorb taxes. Most new restaurants from what I've heard don't start to make a profit until about their 5th year. Sadly it's not the ones doing things right that stay open (at least in my experience).

Paying cash for overtime seems piddly compared to what I've been through. Either pocket the money and thank them for the opportunity, or tell them it's not worth it. -Don't ruin it for others.

Since this discussion seems headed into restricted territory; I'd appreciate PM's concerning this from here out if anyone has questions.


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## Iceman (Jan 4, 2011)

Bobby Fischer was considered the biggest jerk of the entire chess-playing world; he was even in the _Team Picture_ for biggest jerks of all humanity.

_Here is the BEST ..._




  








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## sfgray (Jul 8, 2012)

An employer who pays by cash is also avoiding paying his share of workers comp, Social Security, etc. that accrue as a result of worker wages. Had a very busy banquet facility near us that got raided by the feds, state, and local government in a coordinated action when they learned of those kinds of under-the-table payments. Resulted in criminal fraud charges against the whole ownership group and the place was closed, putting all of the employees out of work. Had been going on for years, of course, and the amounts involved were quite large. But that's what can happen when businesses think they can not bother with the rules--or business owners think they are more clever than the government agents.


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## tweakz (May 10, 2014)

Bobby lived in a time before Asperger's was widely recognized.  It's still not widely understood.


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## panini (Jul 28, 2001)

@tweakz.

I'm not going to go the PM route for you already know how I feel about you. One thing I just wanted to mention is that I hope you won't lump all owners into the same category. The stats are greatly exaggerated. Lots of businesses survive after the first few years. I think ownership is a privilege. Over the past few decades I have always felt it was my job as owner to support the dozen or so families that are associated with us. I really feel it's my personal responsibility to see that they have everything they need. I won't do something to jeopardize that. Many businesses do it the right way and succeed. I'll never be rich, but we pay the bills and make sure all the children associated with us get a good education. That's our future. BTW my son built a Tesla coil in his sophomore year of high




  








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school./img/vbsmilies/smilies/wink.gif


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## tweakz (May 10, 2014)

@panini

-yeah; I've got to realize that the area I'm in isn't the same as everywhere else. I also think that the people coming here to the forum are doing so to learn and share, unlike those types in this area I'm in that use a business for laundering or to show losses (not that I'm against it; but it's unfair competition for people who want to go legit because they can survive taking losses). -It's also not all of them. One of the best bosses I've had treated me almost like family, and there was no rivalry, but admiration between me and the morning cook. - I know you guys / places can be real. ;-) It's great how you care about the children! You're the kind of person I would struggle to help succeed.

I suggest PM route for some because stuff like religion, and politics aren't welcome here and this thread borders on those no fly zones. I'm actually burned out on that stuff (actually know very little about politics anyway) and let a 10year + website finally go this past year. At one time it was getting over 2k hits a day. So to someone's comment about how I might be at the wrong site; nah.. I want to kick back and keep learning from you guys. That crap is really depressing, and I feel I've learned about all I can in that regard.

One of the most enjoyable activities in life is eating, and you can't catch VD from that (ok maybe for some this may not apply). On our quest to enjoy life to the fullest: Let's cherish good food and share our passion with others. I think most if not all of us here are more passionate about the food than how so and so is paying their employees (who have the choice to take it or leave it).


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## panini (Jul 28, 2001)

@tweakz /img/vbsmilies/smilies/wink.gif


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## sherman452 (Apr 21, 2013)

Update:

Yesterday was my last day.  The owner seemed surprised but took in relative stride.

Just to clear up one fact.  I was NOT working overtime because I had recently fired someone.  I was working overtime because that's what executive chefs do, especially when they are launching a new menu.

It has been interesting to see the responses split almost down the middle- cash in hand vs. pay the overtime.
.
So here is my take on that- If you accept cash, you think that cash is king, that you are winning if you accept the cash.  But it just shows that you are a rookie, inexperienced.  For the reasons stated by the seasoned professionals in the above comments, you are going to come out behind if you take the obvious, seemingly easy payout. 

As you gain experience, you will find that it is up to you to take care of your own business.  This means looking out for yourself, conducting yourself in a professional manner that shows you know how to negotiate a salary or terms of your employment and that you will walk if those terms are not met.  It is not about working in an utopian kitchen environment.  It is about respecting your bottom line and consequently gaining respect from the kitchen and the owners.  If you have a bottom line with yourself, you will have a bottom line with your staff, the vendors, the owners, the customers.  You will gain respect.   And you will be a better chef.


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## chefboyog (Oct 23, 2013)

Good on you, stand up for your values! I wish you luck in finding a new work environment that meets your needs. 

When I stated " cash is king" I for some reasonthought it was at the proper rate, and I kindof stand by that. I may be a rookie and inexperienced forever  who knows? I did try to be helpfull like it ir leave it I guess. Your welcome. Free advice. Im sallaried so I would love to see some cash when I work extra hours lol. 

Once again good luck to you! Did you line something up already or are you taking some time between adventures?


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## cheflayne (Aug 21, 2004)

Sherman452, I applaud your decision. The owners were obviously willing to circumvent (sidestep, evade, dodge, etc.) the tax system. With people like that, it always makes me wonder what else they would be looking to circumvent.

I usually try to distance myself from people and situations such as that because they always winds up in drama at some point and I value my peace of mind too much to do that to myself.

Goodatcha Sherman452. /img/vbsmilies/smilies/chef.gif


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## dobzre (Mar 3, 2011)

Tax evasion? I'm guessing you don't know how FoH tip reporting works... You'll be fine.


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## sherman452 (Apr 21, 2013)

Lol, chefboy!  I didn't even realize you had used the expression "cash is king", just using the phrase that seems so common! 


After two decades of being in this crazy business, I still consider myself "inexperienced" in that I am ALWAYS learning something new and that's actually the thing I love the most about this business... I'll never be done learning.

The little speech I told my kitchen crew was don't make a rookie move like accepting cash.  Think a little ahead and recognize that the owners might be taking advantage of you.  If they are taking advantage of you with your paycheck, the biggest transaction between an employee and employer, they are probably taking advantage of you in other areas.

And another point I think I need to make is, not all owners are crooks.  In fact, most of them aren't.  I have worked for some amazing owners.  But I have also worked for some archaic, sexist, crooked people, too.  Those are the ones I try to protect myself from. 

I've got something in the works.


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## chefboyog (Oct 23, 2013)

Haha Sherman , no worries! You took my advice in the end 
Follow the money  jk kinda


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## kuan (Jun 11, 2001)

Moderator chiming in here.

Although I understand many of you have strong political opinions, we at Cheftalk do not advocate knowingly breaking the law.

Thank you.


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## chefwd (Sep 26, 2014)

I would have to agree with @kwan. What disturbed me when reading some of the posts, was that it was okay to break the law, as long as it was not affecting their own pocket. 

As a business owner, there are so many reasons why these people should be reported, but I won't leave a laundry list. The top is not paying taxes. When overtime is paid, there are more taxes paid, and to me if you are willing to cheat the govt. on that, what else are they doing? The second thing I would look at if I were an employee is how much overtime is being paid out. I understand that sometimes it just can't be helped, but if there is a lot of overtime being paid consistently, it sounds to me that there is more of an issue of staffing. Overtime is good for our pockets for a short period of time, but after awhile it can mess with morale, and other issues within the staff.


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## Iceman (Jan 4, 2011)

OMG. 

That is now replacing WOW. 

The amounts of tax fraudulence we talking here are so minor and petty that it would cost the IRS considerably more than they would or could collect in back taxes and penalties. On top of that ... you all are sounding like the tax-morality crusaders of the all high and mighty. My freaking goodness. WE WORK IN KITCHENS ... WE ARE NOT ROCKET SURGEONS. I take off my hat to all those of you that make so much $$$ that you are al concerned over a couple of $ overtime that you are not willing to take some CASH and just call it a day. While my hat if off, I'm also scratching my head trying to understand how you don't understand that YES, cash IS king. Nobody I've ever known ever argues with or turns down CASH. I'm also wondering about those of you concerned about tax consequences, if you are also paying tax on things such as winning lottery tickets, Friday night poker games and church bingo? I've had the privilege of working in most of the major U.S. cities, for and with some of the best chefs around. Let me tell you ... NOBODY is irreplaceable. Other people can and will take your job/position in a freaking nano-second. My goodness. I'm gonna blow the complete lid off this fairy-tail thread right here and now ...

There is NO Santa Clause ... Easter Bunny ... or Tooth Fairy.


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## grande (May 14, 2014)

Everyone please now scroll back to the top of the thread so we don't have to do the whole thing again.


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## spoiledbroth (Sep 25, 2014)

ChefWD said:


> As a business owner, there are so many reasons why these people should be reported, but I won't leave a laundry list. The top is not paying taxes. When overtime is paid, there are more taxes paid, and to me if you are willing to cheat the govt. on that, what else are they doing? The second thing I would look at if I were an employee is how much overtime is being paid out. I understand that sometimes it just can't be helped, but if there is a lot of overtime being paid consistently, it sounds to me that there is more of an issue of staffing. Overtime is good for our pockets for a short period of time, but after awhile it can mess with morale, and other issues within the staff.


What if you were that business owner who had to falsify earnings to make ends meet or whatever the means to the end was. I think thats something alot of people overlook in their hurry to be enraged that business skirt the law (happens in every sector, not just hospitality :lol: look at wall/bay street). Alot of restaurants are "mom and pop" establishments who cannot secure lines of credit just to cover bills, etc. Some people are worse at being creative financially than others. I'm not condoning anything here. Jussayin'.


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## panini (Jul 28, 2001)

IceMan said:


> OMG.
> 
> That is now replacing WOW.
> 
> ...


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## kuan (Jun 11, 2001)

@IceMan Uhm it can add up. Just last week in our local paper: This guy under reported sales by a million bucks.

http://www.startribune.com/lifestyle/taste/279320352.html


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## chefwd (Sep 26, 2014)

@IceMan I get what you are saying, but the law is the law, and if you are not doing what is right under the law, its wrong. It maybe just a few dollars here and there for that one particular establishment, but you have to know that if they are doing it others are too... I may not have been clear but I wasn't just talking about this one place in particular.

@SpoiledBroth I would never be the owner that would falsify my numbers, so I can't answer that. Falsifying numbers is bad situation to get into, I have seen it destroy businesses, relationships and in one case, a life was taken due to someone falsifying numbers.

Don't get me wrong, I don't want people to get the impression I am high and mighty... I am a simple guy with a very straight forward view and have a problem with people skirting the law. Its the principles and ethics that were either instilled in me as a young child or as a grew as an adult, a chef, and business owner.

If its a law I may not particularly like, it needs to be followed, but we "the people" need to be the ones to push for it to change. I think the thing that I have learned as I have gotten older, is your vote does count, your voice can be heard, its all about how it is handled. But sitting on our hands, or shrugging our shoulders and then complaining about situations is not productive. Turning a blind eye when we know someone is doing wrong, is not good for anyone. In this situation, the original poster asked for advice, mine would be report them to the labor board in that state and either stay and see what happens, or move on. It sucks as it directly can affect him, but IMO its the moral and ethical thing to do.

PS... thanks for ruining Santa for me ;(


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## grande (May 14, 2014)

If they can't pay your overtime, they probably aren't paying l&i or your unemployment insurance either. When they can't pay the rent, you'll find out.
Go work for someone who can run a business; people that cut corners in one place are doing it in others, but if the money doesn't add up it doesn't add up. If someone offered me cash I would think they were gonna be closed in a year. Maybe it's just the town I work in but I only want to work for people who can run a business right. 
The second thing is, as a sous chef, I get to hear the chef and especially GM's cursing a blue streak every time the bump into one of those rare legal protections for their workers. L&I, FMLA, overtime pay; I have no illusions about how people would be treated if those weren't there.


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## pete (Oct 7, 2001)

Iceman, for me it has nothing to do with morality and being "high and mighty."  And I hate the argument "....because it's the law."  I have problems with this because it can be a symptom of other, more serious problems about how the owner runs his business, and if you don't think  the IRS, the State, and/or the City, don't come after people, and restaurants for evading taxes then you are wrong.  I saw a guy, in Chicago, lose his 3 restaurants over night (literally) when the sheriff boarded up the doors and closed his places down for not paying taxes.  Think of all the people out of jobs then.  I've been involved in wage and hour audits by the government.  Sure, the chances of getting caught are pretty slim, but why risk it.  As an owner, you are not only risking your business but putting all your employees jobs at risk.


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## chefwriter (Oct 31, 2012)

Based on my experience running a small restaurant I will offer this in the interest of furthering the educational nature of this forum. 

Before making any possible decisions about tax avoidance,  it is vitally important to have an accurate picture of your financial situation in every area. While there are inevitable tax concerns, there are also many other areas that can affect the bottom line in more subtle and insidious ways. Understanding that every detail is important is vital to getting the most out of your business. Services such as garbage disposal contracts, pesticide control, linen contracts, etc can be an enormous but quiet drain on your bottom line. Over paying for paper supplies is another. Wasted or underutilized space in any area can affect costs. Ownership is a constant struggle to keep aware of the potential to save dollars in every single area. 

     Structuring expenses correctly is another issue that should be addressed. Many small business owners begin thinking that they will pay themselves an income later, after the business has developed to some degree. Unfortunately they fail to do so as they would for someone else doing the same job and the cost of paying themselves is never factored into the essential costs of running the business. Naturally the need to pay bills remains while the pay issue continues being over looked. A variety of creative solutions arise, none of which address the underlying cause. 

There are other structural issues related to expenses that a good accountant should be able to help you with. 

     There are several areas of concern over taxes.

 Sales tax is typically the first one encountered. At the end of the day, too many operators lump the sales tax in with the rest of the days' receipts. On a daily basis, this amount can seem inconsequential. However it adds up quickly and can be a significant sum when the time comes to turn it over to the tax department. What many fail to remember or do not recognize is that this money was never theirs in the first place, not even for a moment. A good solution is to have a sales tax bank account. the bank will help you set it up. Whenever the receipts are deposited,, it is easy enough to make a second deposit in the tax account. This money can only be turned over to the tax department. Should anything happen to the business, the owner or if an unexpected expense should arise, the money can be considered to have been held in escrow and in effect, already paid. 

     Payroll taxes are a weekly or biweekly concern. There are numerous payroll companies willing to charge a healthy fee to complete the payroll for you. They also accept full legal responsibility for withholding and paying of all taxes. Software is also available in the event you wish to do your own payroll. In my case, Quickbooks was the answer. I completed the payroll using their software and with the online connection, received regular updates regarding any updates on tax rates or changes. Being connected to the online update service also meant freedom from liability for any accounting errors. I simply put in the hours each employee worked and the software did the rest. The software also generated any reports needed and organized everything in the precise manner required by the government.  The software is also set up to handle the inclusion of all other expenses and is designed to be used for most small business. This enables you to have a  wealth of information about your business in moments and make important decisions about relative costs and percentages.  

Property and school taxes are another area of potentially large expense depending on location and state. These can also be addressed in various ways, with variances and reductions possible with a bit of honest negotiation.  Naturally this depends on your area. 

To sum up, before embarking on any potentially illegal endeavors to save a buck, I would suggest developing the ability to have an honest overview of the business' actual financial picture. 

As an employee, I expect to get paid for the work I do. Time and half if appropriate but paid nonetheless. As some one else mentioned, as this affects my social security and other issues, I'd prefer a recorded pay. 

As an employer, I am first and foremost interested in a brutally honest and objective view of my business finances.  I expect my employees to have complete faith in me when I speak to them regarding my business and that begins with the ability to be candid and upfront in every way with their hard earned pay. Thinking this way earned me years of faithful employees and when we finally sold the business, not one bill was left unpaid.  All the employees received generous severance packages and all had new jobs before the sale was complete.


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## spoiledbroth (Sep 25, 2014)

Pete said:


> Iceman, for me it has nothing to do with morality and being "high and mighty." And I hate the argument "....because it's the law." I have problems with this because it can be a symptom of other, more serious problems about how the owner runs his business, and if you don't think the IRS, the State, and/or the City, don't come after people, and restaurants for evading taxes then you are wrong. I saw a guy, in Chicago, lose his 3 restaurants over night (literally) when the sheriff boarded up the doors and closed his places down for not paying taxes. Think of all the people out of jobs then. I've been involved in wage and hour audits by the government. Sure, the chances of getting caught are pretty slim, but why risk it. As an owner, you are not only risking your business but putting all your employees jobs at risk.


Not paying overtime or attempitng to avoid or make a bargaining agreement with managers to avoid overtime pay (managers should be salaried which would eliminate the problem anyway as per our employment standards in Canada anyway) is not equivalent to evading taxes or not paying employment insurance premiums on your staff or whatever. Creative accounting is not always "indicative of more problems"... I think a staggering number of people in this thread have either owned one single business, and it's going swimmingly (congrats) or have never really gotten to know a proprietor personally. Running a restaurant is a herculean task. If you're a mom & pop establishment sadly you're probably doing most of your own clerical work yourself. Any professional cook here who's willing to put their hand up and say they've never cut a corner in their professional life (or in the last service they worked) is, frankly, a liar or has exceptionally poor standards. For shame.


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## panini (Jul 28, 2001)

Well it works both ways. I started checking my SS account about 10 yrs ago. When I first checked I noticed there were three years blank. At that time I was employed by a very upscale well known caterer in NYC. That company is gone as well as the three years SS that was deducted from my pay plus match. I had to make up those years.


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## spoiledbroth (Sep 25, 2014)

I don't even bother we all know in Canada our Old Age Pension system will be bankrupt about 30 years before I ever get to access it.  Thanks mom and dad. :lol:


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## panini (Jul 28, 2001)

@SpoiledBroth

They have been saying the same thing about our social security system for 40 yrs. and it's still paying off.


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## cheflayne (Aug 21, 2004)

> "Only sometimes when we pick and choose among the rules we discover later that we have set aside something precious in the process."


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## oldschool1982 (Jun 27, 2006)

I'm a little vague on NY state since it's been 13 years since I worked there but.....there and with most states for that fact, if you are paid hourly you are considered non-exempt so if you work your 40 hours and stray so much as 5 minutes past, you are entitled to 1.5 time your normal rate for that 5 minutes and everything above. If you are salary and work past your 40 hours, for the record I don't believe I have EVER seen a salaried person be scheduled less than 50, you are considered an exempt employee and under the guidelines, in most states again, you do not receive overtime pay since your salary is meant to reflect the extra responsibility and hours.

There are some companies, Houlihan's for example but I don't know if they still do, they would pay their AKM's and AM's overtime above 50 hours even if you were salary. The concept was that you were in Training to become a KM or GM and should only be responsible for 5 10 hour days. If the restaurant had a problem with staffing, you were not there to fill gaps since that was not how a proper restaurant, in their minds, should run.

There are some vague rules about OT and performing job functions that have a rate less than your normal rate. Some states require that you be paid your highest hourly rate no matter what function you perform for the restaurant. Lets say you're a cook and you fill in as a host. As a cook you make $13hr but the Host only makes $8hr. If you work as a host any hours over 40 combined, you must be paid the $13 + OT for those hours. This was the case in Illinois and Georgia back in the 80's and 90's but I'm not certain if the rule still applies. I mention this because of two places I worked, several employees filed lawsuits against a couple restaurants regarding back pay and improper OT payment procedures and won huge settlements.

If the owners are paying you cash for any hours below or above 40, they're required to file a 1099. If you receive that cash, you are also required to file a 1099. If one or the other doesn't then that will come out in an audit. Trust me, I have seen these done on an entire restaurant because of the payment and tip declaration practices and I promise you never want to be caught without having filed your proper documentation. If you haven't, the IRS pretty much owns whoever hasn't.

I'm not going to turn this into a tax discussion and have only a short statement regarding the subject. Taxes suck. There's no doubt about that but they are also a necessity in a civilized society. Think about it. What would it be like if when you flushed your toilet, it just emptied onto the street? Simply put for owners and employees alike.........pay your taxes, file your proper documentation and keep straight records. So......when the audit happens, and it will sooner or later for the owner, staff or both.......just rest well knowing you have done what needed to be done and you won't be subject to the horror of paying back-debt to the IRS. They will garnish everything and you will lose everything! Right or wrong with the IRS isn't the case here. If you didn't follow the rules, you were wrong to start with. If following this is too difficult or you outright don't like the Owners procedures, then it's time to find a place where you're comfortable with practices and just let it be. No threats or anything else. Their day is coming.


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## sherman452 (Apr 21, 2013)

Oldschool1982!  Perfectly stated!


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## chefwd (Sep 26, 2014)

@oldschool1982 It is interesting to hear that Houlihan's pays their AKM's and AM's an hourly overtime pay. I remember back in the mid ninety's, the restaurant company I was working for was sued by a Sous Chef on a little known law that if your position required more than 55% of the day doing "manual labor" the employer was required to pay hourly and overtime, and it didn't matter that we had signed paperwork that we had accepted our salary and were required to work 55 hours per week (per normal).

The employee won the case, then the Department of Labor did an audit and required that the company go back five years and retro pay everyone who had worked as a sous chef during that period. I remember the owner coming the the store to give each one of us the check that had held the position. He was very gracious, apologetic even, and I remember him stating it wasn't the money that bothered him, it was the fact that he even had to pay an employee that they fire due to embezzling money from them. The employee had been convicted, but the DOL required the company to pay him to. Any monies that could not be paid out due to not being able to find them after a couple of years, was paid directly to DOL.. I'm curious to know if that is the reason why Houlihan's does it that way.

I do not know if the law has been changed since....


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## grande (May 14, 2014)

Here's an interesting follow up for everyone that was reading this thread: Beloved seattle cuban sandwich joint Paseo announced it was closing it's doors with zero notice. Although nothing official has been announced, it seems that they were being sued by former employees over unpaid overtime, alleging in the lawsuit that they were paid cash at their regular rate after 40 hours. They also said they didn't get breaks, were treated differently because they were latino, and were fired without cause. A few facts about Paseo: It was the number one rated restauranton seattle yelp, number 2 on yelps top 100 places to eat, cash only, sandwiches ran about 9 bucks, and it was owned by a cubano who supposedly made the beans himself every morning so no one could steal his recipe.


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