AAIAC

The Alliance of Alcohol Industry Attorneys & Consultants is a select organization of alcoholic beverage licensing and compliance professionals.

Flaherty-O’Hara at the National Conference of State Liquor Administrators’ annual Central-Western Regional Conference

Flaherty & O’Hara is pleased and honored to attend and be an invited panel member at the National Conference of State Liquor Administrators’ annual Central-Western Regional Conference in Portland, OR, September 9-11, 2019. Our partner R.J. O’Hara participated on a panel discussing the character of possible future alcohol operations as they evolve over the next […]

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Tennessee passes plethora of new liquor laws in 2019

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Tennessee passes plethora of new liquor laws in 2019

Aug 26, 2019

Here are this year’s highlights from the 2019 legislative session when it comes to liquor laws.

College Sports Sales. P.C. 99 amended the alcohol code’s definition of “sports authority facility” to include “any facility on the campus of a public institution of higher education that is designed and used for school-sanctioned sporting events.” In effect, the law allows the lawful selling of wine, beer, and other alcoholic beverages at more collegiate stadiums and arenas. This is a major jump from last year’s related legislation, which defined “sports authority facility” narrowly and only allowed alcohol at MTSU and TSU. P.C. 99, on the other hand, applies to all counties.

This legislation comes at an opportune time, as the SEC lifted its ban on stadium-wide alcohol sales and allowed individual schools to decide if hooch could be sold at college games. The University of Tennessee’s concessionaire was recently approved for beer and wine sales at Thompson-Boling Arena, Neyland Stadium and Regal Soccer Stadium. The Alice Cooper show at Thompson-Boling will be the historic first show at UT with booze.

We understand that Vanderbilt University is currently debating whether to fall in line with other SEC schools that allow alcohol sales.
FOR MORE INFORMATION

Alcohol Sales at the Zoo. P.C. 300 may bring out your inner party animal. As of this May, it became legal for the Nashville and Knoxville Zoos to sell alcohol during regular hours. You can now take your kids to zoo … and enjoy it even more. P.C. 300, which can be found here, amends a law that explicitly prohibited the sale of wine, beer, or alcoholic beverages during regular operating hours outside of special fundraising events.

FOR MORE INFORMATION

Premier Type Tourist Resorts. The following premier-type tourist resorts received approval, which will allow on-premises alcohol consumption:

Hermitage Golf Course in Davidson County Legacy Farms in Lebanon Weir Park in Clay County Center for the Arts in Murfreesboro El Fogon Restaurant in Hixson Lebanon Theater in Lebanon The Blake at Kingsport in Kingsport Legacy Farms in Lebanon Flat Hollow Marina in Campbell County The 121 Hotel in Nashville Central Park in Livingston Sip-n-Scoop in College Grove 

Server Permits. P.C. 435 reduced the training time to 3.5 hours. Previously, the ABC required five hours of training.

 FOR MORE INFORMATION 

Wine and Wineries. This year’s legislature enacted a slew of laws about wine. 2019 saw the creation of the Tennessee Wine and Grape Board, to support the growth of Tennessee’s wine industry. P.C. 444 gives the Governor the job of dubbing five individuals (of the seven that compose the board) to certain positions, including one grape producer and two members who are involved in the production, marketing, sales, journalism, or education of the industry. Among the Board’s goals will be to increase winery numbers and improve wine quality.

FOR MORE INFORMATION 

Conjures up the overplayed tune Brandy by one-hit wonder Looking Glass:

Brandy, you're a fine girl (you're a fine girl)

What a good wife you would be (such a fine girl)

Yeah, your eyes could steal a sailor from the sea

We’re going to need a bottle of fine Tennessee wine to get that song out of our heads and forget those sexist lyrics.

P.C. 74 further erodes the three-tier system for wine. The bill eliminates wholesalers for distribution to satellite facilities for wineries that pay taxes on 50,000 gallons or less of wine during a calendar year. For larger wineries, the law is now permissive, allowing wineries that produce more than 50,000 gallons to self-distribute to satellite facilities, at the option of the wholesaler.

FOR MORE INFORMATION 

What’s in a name? P.C. 263 renamed the “direct shipper’s license” in Tennessee’s Code’s alcohol licensing provisions to “winery direct shipper’s license.” Was anyone confused about not being able to ship spirits?

WIGS. P.C. 136 removed a pesky requirement for food store retailers. Before this bill’s time, grocery stores were required to obtain a new certificate of compliance from the local government every two years. Now, the certificate will remain legit unless a change of ownership or location occurs. The catch? It doesn’t apply to liquor stores.

The bill does make life a bit harder for retail food stores selling wine: now, each retail food store has to include the first and last name of all clerks for purposes of Tennessee’s responsible vendor training program. Before amending this provision, retail food stores were only required to pay a fee corresponding to however many certified clerks the store had. Now, stores will have a few more hoops to jump through.

Speaking of clerks, P.C. 136 reduced training time for WIGS and responsible beer vendor clerks from 2 to 1 hour. Now, WIGS clerks responsible beer vendor applicants can become certified with only one hour of training.

FOR MORE INFORMATION 

Distilleries & Manufacturers. A parity bill passed this session, extending the hours a distillery can sell its products on Sundays and abolishing a relic from pre-ABC days. Now, distilleries are able to sell on Sundays during the same hours as retailers (10 AM until 11 PM).

The bill also did away with a sunset provision that would have precluded distilleries from having interests in restaurants through a trust. Distilleries can continue to have a direct or indirect interest in a restaurant that has a license for on-premises consumption -- so long as the interest is held in an irrevocable distillery trust.

Distilleries can now allow open carry of beer, wine and spirits from an adjacent LBD and have common premises under Section 4 of P.C. 435. 

FOR MORE INFORMATION

No more Revenue Manufacturing License.  This year’s legislature did away with another pre-ABC artifact via P.C. 301. The law abolished the $1,000 privilege tax that distilleries, wineries and high gravity brewers were obligated to pay to the county.

FOR MORE INFORMATION 

Beale Street.  P.C. 435 allows bars and restaurants in the Beale Street Historic District to serve customers seated at tables along the outside wall of the establishment, provided Memphis allows the practice.  Note that this section does not specifically impact the service of beer, just wine, high gravity beer and spirits.

FOR MORE INFORMATION

Scooters and Booze. Scooters are now considered motor-driven vehicles for the purposes of DUI laws. Previously, Tennessee’s Motor and Other Vehicles laws did not specifically include scooters. Seeing as scooters have become Nashville’s newest Millennial plague – the Hot Tub Party Bus may be a close second – and caused numerous tragic accidents, it is no surprise that the legislature has now targeted scooters directly.

The Tennessee Code’s Rules of the Road chapter now includes a new definition – “electric scooter” – and with it comes a host of liabilities for those who decide to take one of those death traps for a spin. The definition includes a requirement of having a maximum speed of no more than twenty miles per hour.

In enacting P.C. 388, this year’s legislature tacked on scooters to a law concerning electric bicycles. The new section of the electric bicycle law indicates that, although scooters are not subject to the Tennessee Financial Responsibility Law, the Uniform Classified and Commercial Driver License Act, and Title 55’s chapters regarding title and registration, they are subject to the laws that apply to bicycles and electric bicycles.

That means DUI laws now apply to scooters.

Another section added by this year’s legislature is worded like a threat. The newly enacted section states that, although scooters are excluded from certain chapters of the Code, nothing precludes counties, municipalities, or metropolitan forms of government from regulating, controlling, or banning the use and operation of scooters within its boundaries. The quasi-threat is subject only to a limitation that ordinances must be reasonably related to promoting and protecting the health and safety of riders, operators, pedestrians, and other motorists. We see this as part of an effort to combat safety risks, as Nashville Fire has reported over 70 scooter-related injuries in the past few months.

A failed wine bill bears mentioning. If enacted, the bill would have expanded the ability of art galleries to serve wine to gallery patrons by lowering from 90 percent to 80 percent the amount of revenue a gallery has to receive from artwork sales in order to serve wine free of charge. Certain versions of the amendment sought to allow galleries to also serve high alcohol content beer as well. Lawmakers certainly had the Nashville and Front Street Art Crawls in mind.

FOR MORE INFORMATION

RIP. A host of bills never saw the light of day.

- A law designed to expand the amount of wine an individual could have shipped to their residence dies in committee. Were those Goose or Rooster fingerprints on that bill …

- A bill allowing publicly-elected officials to own a retail liquor store or wholesaler died this session. You know what they say. Don’t mix business with pleasure …

- Alcohol delivery apps like Drizly might have lost its Nashville presence if a bill unintentionally directed at the popular application had not died. The bill would have required alcohol delivery apps to apply for and obtain a delivery service license. We aren’t sure if this was a caption bill, but we do know that it failed.

- A bill to allow stronger wines in grocery stores was unsuccessful. It would also have permitted grocery stores to sell a wider variety of wine coolers.

- There must be a rumor going around that vaping and inhaling alcohol is quite popular in the Volunteer State. A bill extending the time a license is suspended (from 60 days to 90 days) for engaging in such activity came before the Tennessee legislature this year … again. Our question is this: does this doodad even exist in Tennessee? Of course, if it did, it would certainly have dangerous implications – especially for those who are calorie-conscious and could use the device to get drunk without the guilt. But we’ve found no evidence of these devices being used in Tennessee or any other state for that matter.

- An effort to deliver more money to local coffers by raising beer application fees failed this session. The now-deceased bill would have brought the cost of a beer permit more in line with liquor licenses, whose fees are generally much higher.

- High Gravity gets higher … Among this year’s failures was a bill that redefined “beer.” If this had passed, a beer with an alcohol content of 18% by volume or less would be regulated by counties, while beer with alcoholic content greater than 18% would be regulated by ABC.

- Although wineries are permitted to self-distribute in limited circumstances, an attempt to expand self-distribution to Tennessee breweries died in session this year.

- A bill increasing DUI penalties proved unsuccessful. The bill, which sought to increase the penalty for second and third DUI convictions to a Class E felony, would have prevented a large group of Tennesseans from holding liquor licenses or from obtaining server permits. Safe to say this is a death some in the industry aren’t grieving over.

Go Elizabeth!  A huge shout out to Summer Associate and Vanderbilt law student extraordinaire Elizabeth Boston for her assistance researching and writing this post.

Click here to learn more about Waller’s alcoholic beverage team.

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Are Certificates of Compliance headed for extinction in Tennessee for liquor and grocery stores?

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Are Certificates of Compliance headed for extinction in Tennessee for liquor and grocery stores?

Aug 19, 2019

The Tennessee legislature recently eliminated the Certificates of Compliance requirement for renewal of wine in grocery store (which we affectionately call “WIGS”) licenses.  However, all new WIGS applications still require the dreaded Certificate of Compliance.

A recent rule change by the Tennessee Alcoholic Beverage Commission eliminated the newspaper notice requirement for retail liquor stores to file Certificates of Compliance.  Like a tree falling in the woods, why bother if you don’t tell anyone about a new store.

Makes us wonder if the days of Certificates of Compliance might be numbered.

Beware: a handful of cities have local ordinances that require newspaper ads for Certificates of Compliance, including Metro Nashville.

Makes us want to play Jerrod Niemann’s overly auto-tuned hit Drink to That All Night:

Everybody knows, its gonna be one of those

I can drink to that all night

That’s the stuff I like

That’s the kind of party makes you throw your hands up high

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Flaherty & O’Hara Joins Women of the Vine & Spirits as a Corporate Member

Flaherty & O’Hara is proud to announce they have joined Women of the Vine & Spirits as a Bronze Corporate Member. Partners Kaitlynd Kruger and Chris O’Hara and Associate Ellen Freeman have joined as Member Employees. Women of the Vine & Spirits (WOTVS) is the world’s leading organization dedicated to empowering and advancing women in […]

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Flaherty & O’Hara at the National Conference of State Liquor Administrators

Flaherty & O’Hara partners R.J. O’Hara and Kaitlynd Kruger, along with associate Ellen Freeman, attended the National Conference of State Liquor Administrators. The event was held at the Seelbach Hilton in Louisville, Kentucky from June 16th – 19th. R.J. O’Hara was invited to participate in one of the panels, “Facing the Reality of the ‘New […]

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Spirits and Soul Fest puts the whiskey back into Memphis

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Spirits & Soul Fest puts the whiskey back into Memphis

May 3, 2019

Old Dominick Distillery and the Tennessee Whiskey Trail hosted the first Tennessee whiskey festival in Memphis since at least Prohibition.

On Friday, April 26, more than 20 Tennessee distillers from across the state poured samples and educated consumers about Tennessee spirits at the South Main Trolley Night in Memphis’ Historic Arts District. 

Spirits & Soul festivities concluded with a block party outside Old Dominick, while industry experts conducted two educational seminars:

Stories from pioneers of the TN Whiskey Trail and its economic development impact Fundamentals of classic cocktail class

We snapped a few photos of this historic occasion for your enjoyment. 

You can read more about the Fest hereThis email address is being protected from spambots. You need JavaScript enabled to view it. if you would like full-size copies of our photos.

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Alexa: Play Tennessee server permit training

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Alexa: Play Tennessee server permit training

Apr 11, 2019

With next to no ado, the Tennessee ABC has been quietly approving online courses for server permit training. A list of approved courses is provided here.

Although not quite ready for prime time on your smart speaker, online training is for real in Tennessee.

“With online training, everybody gets the correct information, every time,” notes Kim Pouncey at Top Shelf, an ABC-certified online training course. “Servers can now take training on their own schedule, on their own time, even pausing the training as needed.”

In order to obtain an on-line server permit, servers must:

Create an RLPS account. Former ABC Assistant Director, Zack Blair offers a tutorial for obtaining an RLPS ID in the video above. Log into your RLPS account. Under licenses, select permits and proceed with your Server Permit Application. You will need to upload an ID. We suggest photographing your driver’s license and emailing it to yourself. You will need a credit card to pay the $20 application fee. Once your application is complete, the system generates your RLPS ID#. You will be required to enter your RLPS ID# before you can take the course.

Former Director Blair has detailed instructions for the On-line Server Permit Application in this video.  

You must complete your Server Permit Application within 30 days. If you take more than 30 days, you have to start over and pay the $20 fee again.

Certified online courses will collect your RLPS ID in connection with your online training. If the system functions properly, the training company enters this number into the RLPS, enters your score and the course information will automatically be added to your RLPS account.

Brownsville Station’s one-hit wonder “Smokin' in the Boy’s Room” is on point:  

   Sitting in the classroom, thinking it’s a drag

   Listening to the teacher rap, just ain’t my bag

   The noon bells rings, you know that’s my cue

   I’m gonna meet the boys on floor number two

   Smokin' in the boy’s room

Once the TABC verifies all of your course information and approves your application, the TABC will send you an email telling you to log into your RLPS account to download a copy of your Server Permit.  State law still requires that all servers keep a copy of their server permit card on them. If you are like us and tend to misplace things, take a picture and keep it in your phone.

Servers should email or deliver a copy of their Server Permit card to their employer. ABC rules require that licensees maintain a copy at the restaurant or bar. The ABC audits server permit compliance and having copies on file in the office makes this process much simpler.

If you do it the old-fashioned way and take a class in person, your RLPS# is required before you can attend the class so your instructor has your information to enter into the RLPS. As with online courses, once the TABC approves everything they will send you an email telling you to log in to your RLPS account and download your permit.

We understand that John Pallas and Hayword Reed at the ABC have been reviewing online programs, which require a $700 fee, staff review and approval by TABC legal. Programs are required to be tied to a TABC Certified Instructor.

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Is there an ABC citation in your future for that cute can of cabernet?

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Is there an ABC citation in your future for that cute can of cabernet?

Apr 9, 2019

Single-serve cans of champagne and wine are popping up everywhere. We see them being served at trendy restaurants, bars, hotels, nightclubs and even movie theatres.

They’re so cute – but also a tad trashy. Sipping bubbly with a straw out of a can kinda reminds us of swilling tallboys of PBR. But we digress …

State law prohibits serving a bottle of wine unless it is opened and poured in a glass. This includes champagne.

Think about how wine by the bottle is served at a fancy restaurant. Your hand-picked selection is carefully displayed by the sommelier. With a practiced pull on the cork, vintage vino is splashed in your glass for a sniff and a sample. After teasing your pallet with a sip, the sommelier pours a full glass of wine and leaves the opened bottle on the table.

The same concept applies to single-serve cans and bottles of wine. State law requires that at least some of the wine be poured into a glass before the container is delivered to the customer.  It is illegal to serve a customer with a full bottle or can of wine.

We find ourselves singing Beck’s infectious “Where It’s At”:

Pulling out jives and jamboree handouts

Two turntables and a microphone

Bottles and cans and just clap your hands

Just clap your hands

If you want to avoid an ABC citation, pour those cute little cans into a cup before you hand them to your customer.

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Comment on Tennessee Residency Law for Liquor Stores in Beer Marketer’s Insights

Our partner, R.J. O’Hara, felt compelled to comment during the recent NABCA Legal Symposium, in response to a panel discussion on the pending Supreme Court decision in the Tennessee Retail Association case and, much to his surprise and delight, Eric Sheppard at Beer Marketer’s Insights picked up on it and mentioned R.J.’s comment in his […]

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Second-in-command selected for Tennessee ABC

Will Cheek - Waller Law Will Check - Waller Law

Tabitha Blackwell was named Assistant Director by the Tennessee Alcoholic Beverage Commission at its regular meeting on March 28.

She was interviewed and hired on the spot. According to recently minted ABC Director Russel F. Thomas, she was among 50 candidates for the position.

Blackwell is an attorney and most recently served as Assistant Director of the Division of Charitable Solicitations and Gaming at the Tennessee Secretary of State. Blackwell is a double alum of the University of Memphis, earning a B.A. in 2004 and a J.D. in 2007.

According to the job posting, “The Assistant Director is responsible for reviewing applications and permits issued by the agency,” as well as violation hearings and server training. We have personal experience with Ms. Blackwell’s professional prowess as a regulator at charitable solicitations and welcome her to the ABC.

For no particular reason, we find ourselves humming Jean Shepard’s Grand Ole Opry Classic:

I'm tired of playin' second fiddle to an old guitar

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Tennessee Alcoholic Beverage chairman Bryan Kaegi resigns

Tennessee ABC puts the smack down on Jell-O shots

Dead again: Court strikes down Tennessee residency requirement for liquor store owners

Can I bring my own wine into a restaurant in Tennessee?

Gov. Haslam taps newest ABC Commissioner

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Second-in-command selected for Tennessee ABC

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Second-in-command selected for Tennessee ABC

Mar 28, 2019

Tabitha Blackwell was named Assistant Director by the Tennessee Alcoholic Beverage Commission at its regular meeting on March 28.

She was interviewed and hired on the spot. According to recently minted ABC Director Russel F. Thomas, she was among 50 candidates for the position.

Blackwell is an attorney and most recently served as Assistant Director of the Division of Charitable Solicitations and Gaming at the Tennessee Secretary of State. Blackwell is a double alum of the University of Memphis, earning a B.A. in 2004 and a J.D. in 2007.

According to the job posting, “The Assistant Director is responsible for reviewing applications and permits issued by the agency,” as well as violation hearings and server training. We have personal experience with Ms. Blackwell’s professional prowess as a regulator at charitable solicitations and welcome her to the ABC.

For no particular reason, we find ourselves humming Jean Shepard’s Grand Ole Opry Classic:

I'm tired of playin' second fiddle to an old guitar

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NABCA 26th Annual Legal Symposium

We are excited that one of our partners, Stan Wolowski, was an invited panelist at the 2019 NABCA Legal Symposium earlier this week at the Crystal City Marriott in Arlington / D.C. Stan, a former liquor violation prosecutor, presented a well-received presentation on the manner in which the PLCB and State Police Bureau of Liquor […]

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Manager questionnaires: Did the dreaded pink slips get a 'pink slip'?

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Category: alcohol, ABC

03.13.19

It’s official: manager questionnaires are dead.

Well, not quite official, but according to reliable sources at the Tennessee Alcoholic Beverage Commission, there are no plans to resurrect the pink form or require liquor by the drink license holders to file manager questionnaires.

Seasoned restaurant, bar, venue and hotel owners are intimately familiar with the infamous pink form, required to be filed for each person supervising the sale and service of alcoholic beverages. With the ordinary churn of personnel in the industry, owners were frequently cited for hundreds, if not thousands of dollars, for failure to file manager questionnaires for new hires.

With the advent of RLPS, the ABC’s fancy on-line filing system, we have been anxiously awaiting news of the electronic successor to the dreaded pink paper form for manager questionnaires.

The wait is over, and we have good news.

The ABC has permanently scrapped the manager questionnaire concept. Because all managers –  at least in theory – hold server permits, managers have already disclosed disqualifying crimes and involvement in manufacturers and wholesalers. Instead of the pink form, or its electronic brethren, license holders must disclose the following for every manager:

first and last name date of birth copy of driver’s license

It’s that simple.

Does anyone hear Florida Georgia line singing:

It's like one, two, three

Just as easy as can be

We encourage folks to go online soon and update their list of managers. Fields have been added to RLPS to make manager disclosures.

We suspect the ABC will allow a grace period for licenses to be updated with current manager information. At some point, however, failing to disclose a list of current managers is fair game for citations.

What are you waiting for? Log in and disclose those managers.

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Tennessee Alcoholic Beverage chairman Bryan Kaegi resigns

Tennessee ABC puts the smack down on Jell-O shots

Dead again: Court strikes down Tennessee residency requirement for liquor store owners

Can I bring my own wine into a restaurant in Tennessee?

What to Expect During Alcoholic Beverage Recalls

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Manager questionnaires: Did the dreaded pink slips get a 'pink slip'?

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Manager questionnaires: Did the dreaded pink slips get a 'pink slip'?

Mar 13, 2019

It’s official: manager questionnaires are dead.

Well, not quite official, but according to reliable sources at the Tennessee Alcoholic Beverage Commission, there are no plans to resurrect the pink form or require liquor by the drink license holders to file manager questionnaires.

Seasoned restaurant, bar, venue and hotel owners are intimately familiar with the infamous pink form, required to be filed for each person supervising the sale and service of alcoholic beverages. With the ordinary churn of personnel in the industry, owners were frequently cited for hundreds, if not thousands of dollars, for failure to file manager questionnaires for new hires.

With the advent of RLPS, the ABC’s fancy on-line filing system, we have been anxiously awaiting news of the electronic successor to the dreaded pink paper form for manager questionnaires.

The wait is over, and we have good news.

The ABC has permanently scrapped the manager questionnaire concept. Because all managers –  at least in theory – hold server permits, managers have already disclosed disqualifying crimes and involvement in manufacturers and wholesalers. Instead of the pink form, or its electronic brethren, license holders must disclose the following for every manager:

first and last name date of birth copy of driver’s license

It’s that simple.

Does anyone hear Florida Georgia line singing:

It's like one, two, three

Just as easy as can be

We encourage folks to go online soon and update their list of managers. Fields have been added to RLPS to make manager disclosures.

We suspect the ABC will allow a grace period for licenses to be updated with current manager information. At some point, however, failing to disclose a list of current managers is fair game for citations.

What are you waiting for? Log in and disclose those managers.

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Direct to Consumer Sales of Wine, Beer, and Distilled Spirits Committee

Flaherty & O’Hara, PC partners R.J. O’Hara and Stan Wolowski are excited to have been invited to participate in the Uniform Law Commission’s Study Committee on a possible model law for the direct shipment of spirits to consumers. A diverse group of Study Committee members representing a wide array of interests in the alcohol industry […]

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Should States be Allowed to Discriminate Against Nonresident Liquor Business Owners?

R.J. O’Hara attended the U.S. Supreme Court’s oral argument in the Tennessee Wine & Spirits Retailers Association v. Zachary W. Blair, Tennessee Alcohol Beverage Commission on January 16, 2019, and is pleased to have had to opportunity to write an article on his thoughts on the arguments presented and issued examined by the Court during […]

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The complete guide to paying tipped employees in Tennessee

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Category: restaurants, bars, tips, tipping policy

03.07.19

If your restaurant, bar, club or hotel employs tipped staff, this post is for you. Guest blogger and employment law guru Casey Duhart gives the lowdown on avoiding seriously expensive lawsuits for wage and hour violations.

Casey asks: “Why are tipped employees bringing so many wage and hour lawsuits these days?” Casey’s answer is simple: “Too many employers are not using the tip credit correctly.”

Read Casey’s advice for avoiding tip credit pitfalls.

What is a Tipped Employee?

A tipped employee is an employee who customarily and regularly receives more than $30 per month in tips. An employee does not meet the “customarily and regularly” requirement if the employee only receives $30 or more monthly during the holidays or special events.

What is the Fair Labor Standards Act?

Wage-related rules for tipped employees who receive money from customers are governed by the Fair Labor Standards Act (“FLSA”).

What is the Tip Credit?

Under the FLSA, employers can claim a tip credit toward the federal minimum wage. This credit means that an employer can pay tipped employees a lower wage than the federal minimum wage.

The current federal minimum wage – and the minimum wage in all of Tennessee – is $7.25 per hour.

An employer can claim a maximum tip credit of $5.12 per hour and pay tipped employees $2.13 per hour.

Notice Requirement

Before you can claim a tip credit, you must provide the following information to each tipped employee:

the amount of cash wages the employer is paying a tipped employee. The minimum wage for tipped employees is $2.13 per hour; the additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (the difference between the minimum required cash wage of $2.13 and the current minimum wage of $7.25); that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee; that all tips received by the tipped employee are to be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips; and that the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.

If you fail to provide this information to a tipped employee, you will be required to pay the tipped employee at least $7.25 per hour in wages and allow the tipped employee to keep all the tips.

Here is a simple rule: provide this information in writing to all employees, when they are hired.

Overtime Compensation

If you claim a tip credit, overtime is calculated on the full minimum wage of $7.25; not the lower direct (or cash) wage payment of $2.13.

Example: A tipped employee works 60 hours in a workweek.

            Step 1: Use the minimum wage to calculate the overtime rate.

            $7.25 x 1.5 = $10.88

            Step 2: Subtract the tip credit from the overtime rate to achieve the adjusted rate and multiply by overtime hours worked that week.

            $10.88 - $5.12 = $5.76

            $5.76 x 20 overtime hours = $115.20

            Step 3: Add the employee’s straight pay plus the overtime pay to calculate the pay for that week.

            40 hours x $2.13 = $85.20 straight time

            $85.20 + $115.20 = $200.40

Uniforms

You cannot require a tipped employee to pay for their uniform out-of-pocket if the cost would reduce the tipped employee’s wages below the minimum wage of $7.25 per hour.

Example: If a tipped employee is paid $2.13 per hour and worked 40 hours in a workweek and received $205 in tips (total compensation of $290.20) charging the employee $15 for a uniform shirt would cause the employee’s wages to fall below the minimum wage for that week.

Keep in mind that “street wear” such as ordinary shirts and/or pants of a standard style is not considered a uniform. As a rule of thumb, the more specific your requirements for employee clothing, the more likely it is that it will be considered a uniform.

You may be financially responsible for the cost of cleaning the uniform if the uniform requires daily washing, special commercial laundering, ironing or other special treatment (such as dry cleaning).

Tip Pooling

The FLSA requires that tipped employees keep their tips. However, you can require tipped employees to share their tips with other employees who customarily and regularly receive tips. People who don’t normally receive tips, such as cooks, dishwashers, janitors, and chefs, cannot be included in the tip pool.

Have a clear tip pooling policy. Although not required by law, you should ask all tipped employees participating in the tip pool to sign a tip pooling agreement.

Service Charges

A charge for service, for example, 20 percent of a bill, is not a tip! A compulsory service charge is part of the employer’s gross receipts, which means that the employer may choose to retain the gain or distribute all or part of it to employees. Therefore, service charges are not counted as tips. Unlike tips, you must collect and pay sales tax on service charges.

Credit Card Fees

Customers who pay by credit card usually write in their tip. However, with each credit card transaction, you are charged a transaction fee by the credit card company. You are allowed to pay the employee the tip, less that transaction fee. For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA. However, the charge on the tip may not reduce the employee’s wage below the required minimum wage.

Walkouts

Deducting a tipped employee’s pay for walk-outs or cash register shortages is illegal if the deduction reduces the employee’s wages below the minimum wage.

Not Making up the Difference

An employer must make up the difference if a tipped employee’s wages does not reach the minimum wage when you add their tips to their cash wages. Double and triple check that tipped employees make at least minimum wage.

Example: If a tipped employee is paid $2.13 per hour and worked 40 hours in a workweek and received $75 in tips (total compensation of $160.20) the employee’s compensation is below the minimum wage ($7.25 x 40 hrs = $290) and the employer must make up the difference of $129.80.

Record and Pay for all Time Worked

Be sure that you have a timekeeping and payroll system that captures all time worked by tipped employees and all tips received. Even a simple sign-in sheet or iPad app is better than nothing.

Be Diligent

Restaurants and hospitality employers are easy targets for wage and hour lawsuits and audits. Because the tip credit laws can be tricky, make sure you are diligent about compliance and accurate record keeping.  If in doubt, contact an attorney that practices employment law to help evaluate your tip credit policies and procedures.

You can reach Casey at This email address is being protected from spambots. You need JavaScript enabled to view it. or 615.850.8872.

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Can I bring my own wine into a restaurant in Tennessee?

Restaurants and hotels get the green light to give away alcohol

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Tennessees carding conundrum: A simple fix for our obsession with carding everyone

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Category: ABC, alcohol

02.28.19

Why do we have to show our IDs every time we purchase alcohol at bars, restaurants, grocery stores, convenience markets, retail liquor stores and seemingly every other place we want to buy alcohol in Tennessee? Confusion over carding reigns supreme in the Volunteer State, even among educated industry insiders.

We recently heard from a group of card-carrying AARP members about being carded at a local brewery. When these silver-haired gentlemen inquired why the server was carding everyone, the server replied:  “It’s state law.  We have to card everyone.”

Not true.

Tennessee law does not require on-premise purveyors of alcohol to card everyone.  In fact, state law does not require that a bar, restaurant, hotel or other liquor-by-the-drink establishment card anyone. Consistent with many other business-friendly laws in Tennessee, bars and restaurants have the discretion to decide whom to card.  For a restaurant or bar, it is your business.  You can card everyone, only folks that appear under a certain age, or no one.

Here’s the rub. All beer and liquor license holders are strictly liable for sales of alcohol to minors. If a waiter accidentally sets a Bud Lite in front of an ABC confidential informant that is under the age of 21, the license holder is responsible and will be cited by the ABC.

We hear the Beatles singing: 

They say it’s your birthday.

We’re gonna have a good time …

We blogged about Tennessee ABC Sales To Minor Stings Spooks Industry and Leads to Carding Old Folks way back in 2015.  Although there has been some recent relief – a change in state law allowing the ABC to impose larger fines in lieu of suspensions and a general decrease in enforcement – the pressure from suspensions and significant fines for sales to minors remains intense.

Problem is, universal carding is, in our humble opinion, a panacea for keeping alcohol out of the hands of folks under 21.  Why should servers and clerks spend time carding old geezers, when the real problem is identifying and refusing service to teenagers and 20-year-olds?

We see more than our fair share of citations for sales to minors.  The tickets tell a consistent story:  servers and clerks either fail to read – or misread – the date of someone that is clearly under the age of 21.  Even with Tennessee’s Red Box IDs, which clearly brazen a scarlet letter on minors, employees are either too busy, too careless or too indifferent to refuse service to minors.

We understand the rationale behind universal carding. Why give a busy server or clerk discretion to determine who to card, and more importantly, who not to card, before serving alcohol?  Universal carding takes discretion out of the hands of the server and clerk. 

There is one thing that would make a huge difference to the industry and effectively cut down sales to minors. The Tennessee Legislature should fix the defective under 21 driver’s license. 

Last year, with much fanfare, lawmakers unveiled a new vertical driver’s license for under 21-year-olds. Problem is, the driver’s licenses do not expire when the driver turns 21, meaning that thousands of folks present under 21 driver’s licenses for alcohol. Servers and clerks are jaded by the under 21 driver’s license. Read more at our blog post here.  

We encourage the legislature to make a simple change to state law. People with an under 21 driver’s license should not be able to purchase alcohol. There is no need to force everyone to get a new driver’s license when they turn 21. Just make the folks that want to drink get a new ID.  There is absolutely no cost to the state to fix this problem and the results would be enormous for the industry.

How hard is it to get this right?

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Tennessees carding conundrum: A simple fix for our obsession with carding everyone

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Tennessee’s carding conundrum: A simple fix for our obsession with carding everyone

Feb 28, 2019

Why do we have to show our IDs every time we purchase alcohol at bars, restaurants, grocery stores, convenience markets, retail liquor stores and seemingly every other place we want to buy alcohol in Tennessee? Confusion over carding reigns supreme in the Volunteer State, even among educated industry insiders.

We recently heard from a group of card-carrying AARP members about being carded at a local brewery. When these silver-haired gentlemen inquired why the server was carding everyone, the server replied:  “It’s state law.  We have to card everyone.”

Not true.

Tennessee law does not require on-premise purveyors of alcohol to card everyone.  In fact, state law does not require that a bar, restaurant, hotel or other liquor-by-the-drink establishment card anyone. Consistent with many other business-friendly laws in Tennessee, bars and restaurants have the discretion to decide whom to card.  For a restaurant or bar, it is your business.  You can card everyone, only folks that appear under a certain age, or no one.

Here’s the rub. All beer and liquor license holders are strictly liable for sales of alcohol to minors. If a waiter accidentally sets a Bud Lite in front of an ABC confidential informant that is under the age of 21, the license holder is responsible and will be cited by the ABC.

We hear the Beatles singing: 

They say it’s your birthday.

We’re gonna have a good time …

We blogged about Tennessee ABC Sales To Minor Stings Spooks Industry and Leads to Carding Old Folks way back in 2015.  Although there has been some recent relief – a change in state law allowing the ABC to impose larger fines in lieu of suspensions and a general decrease in enforcement – the pressure from suspensions and significant fines for sales to minors remains intense.

Problem is, universal carding is, in our humble opinion, a panacea for keeping alcohol out of the hands of folks under 21.  Why should servers and clerks spend time carding old geezers, when the real problem is identifying and refusing service to teenagers and 20-year-olds?

We see more than our fair share of citations for sales to minors.  The tickets tell a consistent story:  servers and clerks either fail to read – or misread – the date of someone that is clearly under the age of 21.  Even with Tennessee’s Red Box IDs, which clearly brazen a scarlet letter on minors, employees are either too busy, too careless or too indifferent to refuse service to minors.

We understand the rationale behind universal carding. Why give a busy server or clerk discretion to determine who to card, and more importantly, who not to card, before serving alcohol?  Universal carding takes discretion out of the hands of the server and clerk. 

There is one thing that would make a huge difference to the industry and effectively cut down sales to minors. The Tennessee Legislature should fix the defective under 21 driver’s license. 

Last year, with much fanfare, lawmakers unveiled a new vertical driver’s license for under 21-year-olds. Problem is, the driver’s licenses do not expire when the driver turns 21, meaning that thousands of folks present under 21 driver’s licenses for alcohol. Servers and clerks are jaded by the under 21 driver’s license. Read more at our blog post here.  

We encourage the legislature to make a simple change to state law. People with an under 21 driver’s license should not be able to purchase alcohol. There is no need to force everyone to get a new driver’s license when they turn 21. Just make the folks that want to drink get a new ID.  There is absolutely no cost to the state to fix this problem and the results would be enormous for the industry.

How hard is it to get this right?

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Consignment Sales Result in Multiple Permit Suspensions

Well over a year ago the TTB received a two-year, multi-million dollar budget to conduct Tied House / Trade Practice investigations. Last week, after being out of operation for almost two months as a result of the government shutdown, the TTB flexed a little muscle in California, but suspending / penalizing several California wineries and […]

The post Consignment Sales Result in Multiple Permit Suspensions appeared first on Flaherty & O'Hara.

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