The Hospitality Journal

The Hospitality Journal WWW. HFTPNYC.ORG CHARTERED CHAPTER THE HOSPITALITY FINANCIAL AND TECHNOLOGY PROFESSIONALS FALL 2007 Letter From the President Dear Colleagues, As President of our organization, I would like to thank the membership of the New York City Chapter for their support during this past year. Being part of an organization that fosters great professional contacts and friendships has been invaluable during my career in the hospitality industry. I am thankful and proud for the opportunity to serve. We have seen increasing attendance at the monthly meetings during the past year, and we hope to see this trend continue. It’s been good to see old faces and welcome some new ones. Special thanks must be extended to our Board for their continued efforts to secure informative, relevant speakers at these monthly events. During our summer break, our Board diligently worked to make our 7th annual golf outing a tremendous success. I am proud to announce the results of our golf outing will net a contribution of $23,000 to the Alzheimer’s Association of New York City. It was a beautiful day at a spectacular course, and I urge everyone to try to participate next year. Watch the upcoming monthly invitations for our check presentation to the Alzheimer’s Association. I am looking forward to my second year as President of the New York City Chapter and the continued support of our dedicated Board of Directors and Officers which I so heavily rely on. I look forward to seeing all of you at our monthly meetings and at the Holiday Social. Sincerely, Clare E. Cella IN THIS ISSUE Network Security Solutions 2 The International Scene 3 The Justice Files 3 Outsourcing Information Technology 4 Avoid Difficult Personnel Decisions 6 The Americans with Disability Act 7 Pension Protection Act of 2006 8 Parting Can be Sweet (and Useful) Sorrow 9 Save the Date! 10 Changes in the Social Security No-Match Letter Program 7th Annual Golf Outing 10 11 Financial Results 13 Page 2 The Hospitality Journal Network Security Solutions Although NVR, DVR and CCTV have become universal tools, the hospitality industry was at the forefront of the security technology wave employing these systems. Hotels and lodging fac il iti es w er e t h e f ir st t o us e surveillance cameras, hi-tech security systems, digital video recording and card access systems on a broad basis. extended period can be identified in minutes, eliminating the hours it takes to review weeks and months-worth of digital video recordings. Other advances in networked systems include mechanical function monitors. For exa m pl e , al ar ms can b e programmed into a system to notify the hotel engineer when there are pr o ble m s i n a bo il er roo m . Mechanical areas may be set up for viewing in real time either from on-site or remote monitors. In the event of boiler malfunctions or leaks, the right resources are then notified immediately. any system is determined by its FPS capacity, i.e., “frames per second,” which should be no less than 120 FPS for recorded data. Although speed is not a criterion for live viewing, it is crucial for reviewing data. Using the16-camera system as the basic standard, the most efficient live viewing occurs at 480 FPS, which breaks down to 30 FPS per camera. With security surveillance systems, the quality of the video resolution is vital. Certain recent events in the news confirm the difference clarity makes in video imaging. Whether the cameras are m on ito r in g fr ont or s e rv ic e entrances, IT rooms, staff rooms or mechanical areas, every figure should be clearly identifiable. The clarity of an image is also contingent upon the broadband connection speed. Today, we have integrated systems that may be viewed remotely, as well as programmable card access systems, biometric access systems, and software that provides instant data reviews. On the horizon are systems that will offer even greater protection of the guests and hotel assets. The changes in security technology are profound and occur so quickly that end-users are hard-pressed to keep up with the advances. The future holds exciting benefits for the hospitality in dust ry , inc lud in g s u rv e illa nc e software that will instantly identify people with criminal records using data derived from basic facial features -- and from the moment they walk into a lobby. Clearly, security technology systems are serving the needs of the hospitality industry better than ever. Yet no matter how advanced the technology b eco me s , i ts pu r pos e re ma in s a constant, to ensure the safety and security of the guests and protect the hotels’ assets. By Jon Ecker, President & CEO Peace of Mind Technologies, Inc. Today’s most efficient systems are integrated and include NVR (Network Video Recordings), which are proving to be of particular advantage for hotels on a number of platforms. In addition to providing security for guests, networked systems monitor infrastructures, staff areas, office areas and egresses. The consummate value of Choosing the Right Security these systems comprises increased System productivity and security. Most integrated security systems They also provide tools that help feature a wide range of options. But ma na ge rs i n t he su p e rv is io n o f any system you choose should be employees. The ability to review and user-friendly and intuitive, which is analyze a video recording can help why we recommend Windows-based eliminate problems, present and operating systems. Windows-based future. Something as rudimentary as syst e ms a r e u b i qu ito us in t h e viewing a front desk will help to ensure workplace and, as such easily integrate with other systems. They are easily proper staffing. programmed for viewing by multiple Protecting Points of Sale users from remote locations or on-site. Wit h a ne tw or k , ba n qu et a nd res t au ra nt m an ag er s a re a b le t o integrate point-of-sale systems so that live transactions are integrated with the video. Actual sales may be viewed in real time or on recorded video to mitigate shrinkage or identify individual mistakes. Because the possibility for error exists anywhere that direct financial transactions take place, e.g.; cocktail lounges, coffee shops and news kiosks, these systems are indispensable for identifying problem areas. For hotels in which sales transactions take place simultaneously in multiple locations, “advanced search” software is recommended. With this software, an operator is able to use such criteria as location, approximate time and date, or transaction type to locate video data. Data recorded over an As with any new system, proper use requires training and responsive customer service. Therefore, it is important to work with an experienced consultant on systems purchased from a reputable manufacturer. We also recommend that any new system or upgrade you choose have an ISO (International Standards Organization) certification. It is a guarantee that you’re getting a quality product, and that usually translates into the longevity of the equipment, as well as overall efficiency. Also important when considering an integrated security technology system is the size of the hard drive. A 500 GB storage system is recommended for most 16-camera systems, providing three- to five weeks of storage. In terms of usage, the effectiveness of Page 3 The Hospitality Journal The Internal Scene Greetings from Jacksonville As I sit here in the Jacksonville airport terminal I’m struck with the realization that I now have to summarize four days of education, networking and fun in just a couple of paragraphs. THE JUSTICE FILES A New York City rule recently adopted now permits unenclosed sidewalk caf es to o pe rat e y ear rou nd b y installing portable natural gas heaters. Un encl os ed s id ew al k caf es a re licensed by the New York City Department of Consumer Affairs. Previously, operation of the outdoor I guess I could start by telling you that a cafes was barred, at least between December 1 and February 8. While record 740 fellow members descended unenclosed sidewalk cafes are now upon sunny, warm and sleepy Jacksonville authorized to operate year round they for this year’s Annual Convention. I could could not practically do so without tell you that our days began at 7:00am using outdoor heaters in cooler with “early bird” seminars that continued weather. However, there are certain throughout the day with your choice of tracks, which focused on Clubs, Hotels, re qu i re m ent s s p eci fy in g t h e Technology, International Issues and Leadership/Personal development conditions under which heaters may be used in such cafes. subjects. Included among the 37 individual sessions and 4 exhibitor tutorials were subjects ranging from Internal Controls, Immigration Issues, Paperless These requirements specify that only Storage, Geekspeak, Network Security, Hotel Spas and Understanding he at in g u n its t ha t co nfo rm to applicable Material and Equipment Yourself and Others. Renowned speakers, Dan Clark, Juliet Funt, Dale Henry standards adopted by the Department and Greg Schwem also treated us to terrific educational and entertaining of Buildings may be used; that such units may not be placed within the presentations during our morning General Sessions. area occupied by the unenclosed sidewalk café until the installation of What I can’t tell you is how much fun I, along with several of our New York th e nec es sar y fue l l in es a nd City Chapter members, had during the Thursday “Casino Night” function or con nect io ns co m pl y w ith t h e of the Buildings about the dancing and the laughter at the Friday’s “President’s Ball”. I also requirements Department, Fire Department and can’t tell you how satisfying it was to see old friends from New Jersey, their installation has been approved Connecticut and the other fifty states and about the new friends that we all in wr it in g b y t h e Bu ild i ng s seem to make from year to year. I couldn’t possibly tell you how rewarding it Department; that the sidewalk café was to enrich our minds and share ideas among one’s peers in an open and licensee has a current open flame comfortable atmosphere. To realize that while you may not have all the permit required for such heaters by the Fire Department; and that a answers there is a willing and qualified source of reference that you can access person holding a Certificate of Fitness throughout the year. issued by the Fire Department is on duty at all times that such heaters are So, since I can’t seem to describe what went on for the past four days perhaps in use. you should do yourself and your employer a favor by attending at least one Annual Conference, it will do your career a world of good. See you in Nashville, y’all. By Humphrey Feliciano, Financial Controller Union Club of the City of New York, Inc. The number of heaters used will depend on the size of the café. The re qu i re m ent s not ed a bo v e a re designed to ensure that the units are placed and used in a safe manner within the unenclosed sidewalk café. By John A. Hyland, Sherry & O’Neill Page 4 The Hospitality Journal Outsourcing Information Technology: Identifying the Advantages and Disadvantages includes computers, ancillary equipment, software, firmware and similar pr oce dur es , se rv ic es (i ncl udi n g su p port se rv ic es ) , a n d rel ate d resources. A term that encompasses all forms of technology used to create, store, exchange and utilize information in its various forms including business data, conversations, still images, motion pictures and multimedia presentations. During the last decade, the competitive t re nd i n i ndu str i es h as s hi ft e d significantly. Whereas traditional information technology concerns of companies were quality, cost effective labor, and whether or not new technology is needed, today the dynamics include enterprise solution and out so urc in g . T h e co n cer n wi t h information technology outsourcing has sparked a debate that is extremely difficult to argue; particularly in the presence of globalization. Should a firm outsource all or parts of its IT needs, and if so, what are the pros and cons of this decision. Further yet, should outsourcing be domestic or offshore? While the pros and cons of outsourcing will vary based on the nature of the fi rm ’s b us in es s , t h e fol lo wi n g represent some of the major categories of advantages and disadvantages of outsourcing IT. Advantages of Outsourcing 1. Outsourcing has become increasingly advantageous as companies seek to expand globally, increasing their market share and spreading risks inherent in many business ventures. By offshoring, the company’s brand recognition will increase tremendousl y, s ecur i n g a m uch lar g er consumer base. In the event of a dom est ic ma r ket do w ntur n , t he operating loss can be cushioned. T he qu est io n o f ho w a com p an y handles its IT can be answered in many ways. However, most choose to provide their IT by one-of-two means; either by employing the right talents internally or contractual agreement with an external provider, referred to as outs ourc i n g. Wh e n th e I T contracted provider is overseas the 2. The contracting firm could reduce process is called outsourcing offshore cost of procurement, both labor and or “offshoring”. material. As globalization heightens, While outsourcing may help achieve companies have added the option of goals faster, one cannot underestimate outsourcing. Offshoring facilitates t h e cost and i n he re nt r is k o f longer operating hours based on varied unc ert ai nty as soc iat ed w it h not time zones. Talented labor can be knowing the true character and secured more readily at lower cost. 3. Outsourcing facilitates efficiency through use of capital and scarce real estate space. Organizations can employ capital that would have been otherwise com m itt ed to I T pro vi s ion fo r in cr eas ed p rod uct io n . Ca p it al investment in expensive hardware and software could increase the overall cost of production and profitability. Outsourcing limits this consideration and re duc es t h e o p er ati n g co st associated with systems implementation and changes. destination of the engineers and conductors. Why would companies allow outsiders access to their valuable To fully appreciate the variables that IT system, which can be shared, when must be considered, let’s examine what the possibilities intentionally or is meant by a company’s information unintentionally are so diverse? technology. Information technology re p res e nts an y e q ui p me nt o r Traditionally, the fundamental reasons interconnected system or subsystem of for outsourcing are cost of labor, equipment used by the organization in capital, topping specialized skills, and the automatic acquisition, storage, in cr eas i ng t h e a b il ity to atta in manipulation, management, moveeconomies of scales. More recently, ment, control, display, switching, outsourcing has evolved to include the int e rc han g e , tra ns m i ssi on , or option of offshoring, arising from reception of data or information. The globalization and desire to increase term information technology, or IT, geographic coverage. F a l l 20 0 7 Page 5 4. Outso urc i ng g iv es a cc ess t o specialists who handle repetitive tasks, as testing newly released software and hardware for bugs, facilitating speed and efficiency where downtime exists. 5. A well negotiated contract for supply of information technology will address changes in features and aspects that is re qu i red to ma i nt a in a fir m’ s competitive edge. These changes could be so frequent that the cost of taking advantage of each would be too great for a company to implement, should they provide IT internally. 6. A company could lose control of IT in no vat io n i n th e p r es enc e of complacent or incompetent internal IT management. Outsourcing could help, not only to mitigate the cost of in no vat io n but al so en a ble t h e contracting firm to remain current on IT as the company grows and their needs change. 7. Outsourcing helps the company overcome its inability to hire talent when lack of internal resources exists. Hiring competent, specialized skill in in for m ati on tec h nol o gy ca n b e extremely difficult and costly. In addition, there may be inconsistent need for IT monitoring, especially where stability exists. The cost of having IT resources that are not fully employed could reduce the firm’s profitability and efficiency. Outsourcin g pro v id es a muc h mor e cost eff ect i ve m et hod of g et t in g experienced, competent labor on demand. An internal IT department could be challenged with new software or innovation that could be quickly handled by an experienced outsourced supplier. scale; to a lesser extent, the suppliers of IT could face lower cost because of their services production volume. The lower cost could be trickled to the outsourcing company. Disadvantages of Outsourcing T he ne xt e i g ht variables capture the essential disadvantages regardless of a firm’s size and if it outsources domestically or overseas. 1. Loss of privacy with respect to proprietary in for m ati on t h at could be divulged and reduce a firm’s competitive edge to others once outsourcing is implemented. The question of what aspect of information technology to be outsourced should also be answered. The contracted companies may have little or no in ce nt iv e to k e e p th ei r cl ie nt technology information private. In addition, the contracting firm could unintentionally employ the same resources in a competitor’s operation that they are also contracted to serve. 3. Contracts locked in agreement can be costly with respect to upgrades, ser v ic e , su p p ort an d a ny o v er all changes in the IT systems. The cost of upgrading could be far greater as the contracting firm acts as a monopoly. The outsourcing company will find it increasingly more difficult to negotiate or compare cost of information technology changes as a result of the strict agreement with the contracted technology provider. Outsourcing could cause a firm to pay for services that are no longer relevant. 4. The legal and economic ramifications of canceling a contract cannot be underestimat ed . S ho uld t h e c ontr act ed technology company face bankruptcy and other unforeseen problems, the contracting company could face added cost, legal or otherwise to engage an alternative provider of this service. 5. Cost of outsourcing could be greater in the long run depending on the company’s size and nature of business. Once information technology needs are outsourced, the outsourcing firm could miss the opportunity to take advantage of promotion, warranties, gua ra nte e , v olu me disco unt s associated with purchases related to furnishing a firm’s IT needs. The cost could be further increased should procurement of information technologies hardware and or software be of low quality or do not fit the needs of that firm. Increased downtime and efficiency in handling service calls could be costly – although many software related needs can be handled remotely, many hardware problems required onsite resolution. (continued on page 6) 2. Heightened risk of having other personnel foreign to the firm’s internal organizational culture, needs and operations could be extremely risky. Sensitivity to the core, critical and strategic information technology may not be accurately evaluated and controlled by a contracting company. A co m pan y’s i nf or mat io n cou ld b eco me o pe n so urc e to no n management employees as well as outsiders to the contracting company. Liabilities associated with securing and use of information technologies 8. Potential windfall benefits from an could be increased as well once IT supplier that achieved economies of outsourced. Page 6 The Hospitality Journal (Outsourcing Information Technology continued from page 5) 6. A firm could lose control of information technologies management. Management participation in decision making and dependency on the contracted technology provider could remove a company’s control over quantity and quality. Once the IT needs are outsourced, the firm looses control in selecting talented labor that fits their specific needs. In order to avoid total loss of control, companies may need to monitor the contracted organization to prevent information system obsolesce as technology evolves; particularly problematic where IT outsourcing is offshore and politics, religion or other local factors must be considered. 7. Inability to predict the information technology impact on shareholders and stakeholders due to loss of controls to contracted provider. In a publicly traded company, shareholders are highly sensitive to information and news regarding a company’s operations. Irrespective of contacting obligations, outsourcing information technologies could lead to leaks on pending problems that could affect the price per share of the outsourcing firm. 8. Arising from globalization, the question of a local economy’s unemployment rate increasing as a result of outsourcing or offshoring cannot be overlooked. Many large firms are faced with the social responsibility question of transferring jobs abroad that could undermine the decision of total or selective outsourcing. The demand for goods and services of the outsourcing company must be considered and the impact outsourcing will have on consumers, shareholders and stakeholders. Handling information technologies internally with a dedicated department increases a company’s flexibility to multitask personnel when information technology needs are stable. An IT division could perform other functions during downtime lowering cost, especially for small firms. Avoid Difficult Personnel Decisions Articulate policies clearly so employees know where the lines are - and the consequences of crossing them. Don’t overrule the decisions of lower-level supervisors. Turn such disagreements into opportuniSpecific guidelines must be established when use of outsourcing is being ties for discussion so that the considered. In addition, the nature of a organization’s business cannot be managerial team ends up on the underestimated with respect to this decision. A firm that has trade secrets same page. fundamental to their business strategies and success should seriously review if any aspect of IT should be outsourced. Not withstanding, the pros and cons of Develop three tools essential to outsourcing remains a very lucrative business strategy that will continue to great managers: a sense of humor, an open mind, and the habit of evolve. taking a deep breath before deciding Among the crucial questions to answer are; should information technology to silence the voices of staffers. outsourcing be selective or total, who will be contracted to handle information technology, can IT be handled more cost effectively internally, what is the Avoid sending mixed messages. opportunity cost, what is the primary reason for contemplating outsourcing, are Recruiting an employee for the there any trade secrets, consumers, stakeholders and shareholders’ reactions. innovation committee and then Another emerging trend is the firm’s desire to have an enterprise solution that pu n is hi n g h im fo r off er i n g provides complete IT needs. It should be interesting to evaluate the long run innovative suggestions is a recipe for impact of this expensive IT solution for contracting and contracted companies. frustration and turnover. Stay tuned for the economics of enterprise solutions, specifically for the Adapted from Communications hospitality industry. Solutions for Today’s Manager By Calvester Legister, CHAE, CFO, Herald Hotel Associates, LP-RMB F a l l 20 0 7 Page 7 The Americans with Disability Act The Americans with Disability Act (“ADA”) has significantly impacted the hotel industry since its inception in 1990. A person is considered to be “disabled” and co v er ed by t h e A DA i f t h e individual; 1 ) ha s a p h ys ical or m ent al impairment that substantially limits one or mo re of t h e m ajo r l if e activities of the individual 2) there is a record of such impairment 3) the person is regarded as having such an impairment Places of public accommodation must provide auxiliary aids and services to ensure that guests with communication disabilities - such as blindness, speech and hearing impairments - are ab le t o pa rti ci p ate fu lly in t h e programs and services unless the entity can demonstrate that taking the steps would fundamentally alter the nature of the benefits or would result in undue burden. be made accessible to people who use wheelchairs, seat a wheelchair-using person at an accessible table. All new facilities and alterations made to existing facilities must be readily accessible to and usable by individuals with disabilities. This will include:  Accessible routes to and from the facility  Accessible entrances  Accessible public and common use areas; all doors and doorways into rooms and bathrooms must be wide enough for wheelchairs  Handrails on stairs/ramps: a percentage of each class of rooms must be fully accessible with grab bars and accessible countertops While there has been some limitation placed by the courts on defining persons with disabilities, the section of the ADA dealing with places of public accommodation will continue to have a serious impact on the hotel industry and cannot be ignored. By John A. Hyland, Sherry & O’Neill Examples of auxiliary aids and services include the hotel’s telephone system and the alarm systems. One-fourth of all public pay telephones in newly constructed buildings are required to have built-in volume control on the T it l e I o f t h e A D A con ce rn s telephones to aid hearing impaired em pl oy me nt of pe rs ons w it h people. Alarm systems need to be disabilities. The general rule is that visual and audible. employers shall not discriminate against a qualified individual with a In new and newly renovated hotels, disability because of the disability in there must be strict compliance with the job application procedures, hiring very explicit requirements: 4% of the or any other term or condition of first 100 rooms and approximately 2% of the rooms in excess of 100 are to be employment. accessible to both mobility-impaired Although the employer cannot inquire and deaf individuals, plus an identical re ga rd in g a di sa b il it y he c an as k percentage of additional rooms must whether the employee needs an be accessible to deaf individuals. In accommodation to carry out the task. hotels with more than 50 rooms, an T he e m ploy e r mu st pr ov id e a additional 1% must be equipped with reasonable accommodation to help an roll-in showers. The accessible rooms otherwise qualified candidate. A must be dispersed among the various reasonable accommodation is one classes of sleeping accommodations which does not impose an undue e.g. luxury to basic. hardship on the employer. Existing hotels have a duty to remove Any identification of a disability by architectural barriers, including inquiry or examination at the pre-offer communication barriers that are stage is prohibited. Employers may ask structural in nature where the removal questions relating to the ability to is readily achievable. This is a lesser perform job related functions, but may standard than undue burden and not as k q ue sti on s in t e rm s o f means easily accomplishable and able disability. to be carried out without much difficulty or expense. Title III of the ADA requires places of public accommodation, such as hotels/ If an entity can demonstrate that motels and restaurants/bars, to make removal of a barrier is not readily their services and facilities accessible achievable, it must make the services to and usable by physically disabled available through alternative methods guests and customers. if the alternatives are readily achievable. For example, if a bar area cannot “Real joy comes not from ease or riches or from the praise of men, but from doing something worthwhile.” SIR WILF RED G RENFELL Page 8 The Hospitality Journal Overview: Pension Protection Act of 2006 Important new legislation was recently passed called the Pension Protection Act of 2006 (the “Act”) which addresses numerous changes relating to pension plans and their beneficiaries. Here are some of the key provisions. Single-employer Defined Benefit Rules Among the changes, the Act:  requires employers to make contributions to their single-employer defined benefit pension plans over the next seven years to make those plans 100% funded. (Formerly, a 90% funding level was acceptable.)  triggers accelerated contributions for “at-risk” plans.  p er m its e m plo ye rs t o ma k e additional maximum deductible contributions.  prohibits further benefit accruals for lump-sum distributions or shutdown benefits from plans funded at less than 60%.  restricts the use of deferred executive compensation arrangements for em pl oy er s w it h s e ve re ly un d e r funded plans. Multi-employer Pension System The Act’s changes include, but are not limited to:  identifying under funded multiemployer pension plans and establishing quantifiable benchma r ks f or m easu r in g a p lan ’s funding improvement.  providing new notice requirements for under funded plans.  requiring plan trustees to improve the health of the plan by one-third within 10 years if a plan is less than 80% funded or will reach a funding deficiency within seven years.  prohibiting benefit increases if the increase causes the plan to fall below 65% funded status. N e w Di scl o su r e R ul es f o r Qualified Plans On e o f t he t he m es of t h e Act i s increased disclosure so that workers, regulators and investors can better ov ers e e th e f ina nc ial hea lt h o f traditional pension plans. To meet this goal, the Act:  requires both single- and multiemployer plans to include more detailed and specific information on their Form 5500 filings.  requires both single- and multiemplo ye r p en s ion pla ns to n ot ify workers and retirees of the funded status of their plan within 120 days after the close of the plan year.  prohibits companies from forcing employees to invest any of their own retirement savings contributions in the stock of the employer.  makes it clear that companies have a fiduciary responsibility for workers’ savings during “blackout” periods, when workers are temporarily barred from making changes to their 401(K) investments.  requires companies to give workers quarterly benefit statements that contain information about accounts, including the value of their assets, their rights to diversify, and the importance of maintaining a diversified portfolio. New Investment Advice Rules The Act’s new rules include: (even if the beneficiary is not a spouse or dependent).  effective for post-2006 distributions, nonspouse designated beneficiaries are allowed to make rollovers of inherited amounts in qualified plans, governmental Section 457 plans, or tax-sheltered annuities to their own IRAs (treated as inherited IRAs).  effective for distributions in plan years beginning after 2006, defined benefit plans can make in-service distributions to age-62-or-older participants. Retirement Savings Provisions Made Permanent The Act makes permanent a number of retirement plans and IRA liberalizations that were added to the tax laws in 2001, but were to sunset after 2010. By ma k in g t he 20 01 cha ng es permanent, the new law preserves the advantages of:  higher employee contribution limits for employer plans  higher IRA contribution limits  more flexible plan rules  portability  a catch-up for those over 50  an increase in employer contribution limits  permanent saver’s credit (which would not have been available after 2006)  permitting qualified “fiduciary advisers” to offer investment advice to help employees manage their 401 (K) and other retirement options.  putting in place fiduciary and disclosure safeguards to ensure that advice provided to employees is Charitable solely in their best interest. Reforms Liberalized Plan Payout and The Act Rollover Rules also The following provisions of the Act conta i ns liberalizing plan payout and rollover a pac k ag e rules include: of provisions to help prevent abuse in the charitable  aft e r 2 007 , ta x pay er s w ill be sector and provide additional tax permitted to make direct rollovers incentives for Americans to give more from qualified plans to Roth IRAs. resources to the charitable community,  for purposes of the 401(K) hardship including: distribution rules, effective August 17, 2006, “hardship” includes hard-  Tax-free distributions from IRAs for charitable purposes. Effective for ship of a beneficiary under the plan two years through 2007, taxpayers can exclude from gross income F a l l 20 0 7 Page 9 cert ai n d ist ri b ut ion s of u p t o $100,000 from a traditional or Roth IRA if made to a tax-exempt organization to which deductible contributions can be made.  Charitable deduction for contributi o ns o f fo o d i nv en t o r y . A n enhanced deduction for donations of food inventory (which was formerly available only to C corporations) is ext en ded t o all t ra d es a nd businesses, effective for two years through 2007.  Basis adjustment to stock of S corporation contributing property. If an S corporation contributes pr o pe rty to a c ha r it y, a n S corporation shareholder only has to reduce his/her basis in stock of the S corporation by his/her pro rata share of t h e adj ust ed b as i s o f t h e contributed property, rather than by the amount of the charitable contribution that flows through to him/her. This provision is effective for two years through 2007. The new rules also:  double the fines and penalties applicable to certain activities by charities, social welfare organizat io ns , pr i vat e fou nd at io ns a nd exempt-organization managers.  require the recapture of any tax benefit derived from the contribution of property with respect to which a fair market value deduction was claimed if the property is not used for an exempt purpose of the donee organization, effective for contributions made after September 1, 2006.  generally prohibit deductions for contributions of clothing and household items unless they are in good used condition or better.  re qu i re t hat in t h e c ase o f a charitable contribution of money regardless of the amount - the donor must maintain a cancelled check, bank record or receipt from the donee organization showing the name of the donee organization, the date of the contribution, and the amount of the contribution. This is effective for tax years beginning after August 17, 2006.  lower the threshold for imposing accuracy-related penalties on a taxpayer who claims a deduction for d onat ed p ro p erty fo r w hi ch a qualified appraisal is required.  require that unrelated business income tax returns of 501(c)(3) organizations be made publicly available. *** Please note: We have provided only the highlights of the more important changes in the new law. Parting can be sweet (and useful) sorrow, if you ask the right questions Ma ny ma na ge rs c ond uct e xi t int e rv i ew s o nly b ec a use HR demands it. Sure, these interviews can b e un co mfo rta b le a nd awkward. But they’re also an opportunity to get a lot of useful information - assuming that you ask the right questions. The next time you sit down with a departing employee, come prepared with a list of questions that may help ensure that exit interviews are fewer and further between:  What is your main reason for leaving us, and why is this significant to you?  Wh at coul d w e ha v e d one dif fe r entl y t hat w oul d h av e persuaded you to stay?  What could you have done better had we given you the opportunity?  What extra responsibility would you have liked but were not given?  How could we have made better use of your skills?  How can the organization gather and us e t h e v ie ws of its employees better?  What would you say about how you were motivated, and how could that have been improved? - Adapted from “Exit interviews and knowledge transfer.” Items in this publication should not be considered official statements of position, nor advice for individuals or organizations without consulting a professional advisor. This information is not intended to be, nor can it be, used by any taxpayer for the purpose of avoiding tax penalties. For more information, please contact Leo Parmegiani, Director of Tax Services. 29 Broadway New York, NY 10006 Tel: (212) 867-8000 Fax: (212) 687-4346 www.pkfnewyork.com E-mail: info@pkfny.com Page 10 The Hospitality Journal SAVE THE DATE! Changes in Social Security’s No-Match Letter Program Have Consequences for Employers November 28, 2007 New York City Chapter Meeting Location: Host: GM: Speakers: Hotel on Rivington Ms. Jing Moore Financial Controller Mr. Jeffrey Felshaw Mr. Leo Parmegiani A recent Department of Homeland Security (DHS) regulation establishing more stringent guidelines for employers who receive the Social Security Administration’s (SSA) “no-match” letters represents a significant change in government policy that dramatically increases employer obligations and liabilities. Form I-9 Every new hire needs to complete an I-9, which requires the employer to verify the person’s identity and right to work in the United States, within 3 days of beginning work. Proof of identity can be a driver’s license, provided it contains a photograph and certain identifying information. Right to work can be certified by a birth certificate or U.S. passport in the case of a citizen, or a “green card” which denotes permanent resident status for an alien. The I-9 form has information on other acceptable documents. Employers may decide whether or not to keep copies of the documents presented by employees. If you keep them, you need to keep them for all employees, to avoid a discrimination charge. I-9s should be retained for 3 years, or 1 year after the date employment is terminated, whichever is longer. If any enforcement proceedings are pending or likely, they should be retained indefinitely. The forms may be stored either on paper or electronically. Employers should accept any documents that meet the requirements for completing the I-9 form and should never ask for more or different documents than are minimally required. To do otherwise would leave the employer open to claims of discrimination based on national origin. No-Match Letters When the Social Security information you’ve sent to the government doesn’t match what’s in Social Security’s files, the agency issues a no-match letter. Some 8 million of these letters are sent out each year. The mismatch can be triggered by many things, including a name change or clerical errors. It also may signify that a worker is not authorized to work. In any case, the letter can’t be ignored. These are the steps that should be taken: Take no adverse action against the employee, but do recheck your files to be sure the information you submitted is what the employee gave you. Ask the employee to look at the submitted information as well, but do not again demand to see the employee’s documentation. December 17, 2007 Annual Holiday Dinner Dance Celebration The Century Association 7 West 43rd Street, New York TOYS FOR TOTS DRIVE NOV. 19 - DEC. 17 If the information was correctly submitted, ask the employee to try to explain or find out why the no-match situation exists. Give the worker time to resolve the problem, but ask for progress reports along the way. If, in the course of making inquiries, you do reliably learn that the worker is not authorized to work in the United States, the law requires immediate termination. Because this step involves legal risk, it is recommend consulting with counsel before taking any such action. Finally, send your response to the SSA. The attorneys outline three possible ways of doing so: Report that (1) the employee has left the company, (2) you’ve found an error and here is the correct information, or (3) you and the employee have verified the submission and you simply cannot explain the discrepancy. Adapted from HRDailyAdvisor.com For more information on how you can participate, please contact committee chairpersons, Elena Mitronich or Ramy Nasser at 212-333-6004. Fall 2007 Page 11 7th Annual Golf Outing HFTP New York City Chapter’s Annual Charity Golf Outing was held on September 18, 2007 at the St Andrews Country Club in Hudson, NY. A total of $23,000 was raised to benefit the Alzheimer’s Association of New York City. Fall 2 BOARD OF DIRECTORS HOSPITALITY FINANCIAL AND TECHNOLOGY PROFESSIONALS NEW YORK CITY CHAPTER Profit & Loss as of July 2007 Totals OFFICERS President Clare E. Cella, CPA PKF, CPAs, PC Vice President Yousef Iskander, CHAE Denihan Hospitality $19,397.00 $12,650.00 $44,820.00 $200.55 $3,520.00 $80,587.55 Treasurer Joseph Delgado Warwick New York Hotel Secretary John Hyland, Esquire Sherry & O’Neill DIRECTORS Nabil Fahmy The Penn Club Expenses Dinner Meetings Golf Tournament Alzheimer Disease Association (donation) Education Day Donations PO Box Rental Officer Trips & Expenses Website Maintenance Advance Payment Golf Outing 2007 Good Will Postage and Mailing Bank Charge NASBA Membership Total Expenses Excess Income over expenses Closing Balance Citibank Operation Account $18,335.00 $25,408.00 $16,500.00 $2,614.00 $650.00 $92.00 $5,113.00 $242.00 $5,000.00 $142.00 $849.00 $2.18 $600.00 $75,547.18 $5,040.37 $24,900.87 The Hospitality Journal Revenue Dinner Meetings HFTP International Assoc. Membership and Event Stipend Golf Outing Interest Education Day Total Revenue Humphrey Feliciano, CHAE The Union Club Chuck Harris Jetcom Communications Inc. Calvester Legister, CHAE Herald Hotel Associates, LP Elena Mitronich The Cornell Club Dan Neumann, CPA The Leading Hotels of the World, Ltd. LEGAL COUNSEL Robert P. O’Neill, Esq. John Hyland, Esq. Sherry & O’Neill Publisher The Hospitality Financial & Technology Professionals Editors Yousef Iskander and Fabiola Compres The hospitality Journal is published by HFTP, Inc. a chartered member of the Hospitality Financial and Technology Professionals. HFTP is not responsible for any inaccuracies contained in material supplied to us by contributors of the newsletter. WWW. HFTPNYC.ORG Closing Balance Citibank Scholarship Account $9,349.79 Total Cash $34,250.66 Hospitality Financial and Technology Professionals PO BOX 3432  New York, NY 10163 Tel: 212-465-3758  Fax: 212-465-3812