Modern Restaurant Management

Jim Coleman authored an article published by Modern Restaurant Management on April 30, 2018, providing insight on 10 wage and hour best practices for employers in the restaurant industry, which should be a priority focus to avoid litigation in the form of costly FLSA collective actions or class actions under state wage and hour law. These best practices for restaurants include:

  1. Do not forget that there is no federal preemption of state or local wage and hour laws, with some states, cities and counties passing minimum wage requirements that are higher than the FLSA.
  2. Best practice number one also applies to tip credit regulations – many local and state laws have lower tip credit maximums per hour than the FLSA or even prohibit a tip credit of any amount.
  3. Understand the specific conditions that the FLSA, state and local minimum wage laws have on taking tip credit.
  4. Beware of the applicable overtime requirements. For example, the FLSA generally requires overtime pay for work weeks over 40 hours.
  5. Employ a robust time keeping system that accurately tracks and records all hours worked.
  6. Prohibit all “off the clock” work. Employees must be clocked-in during any time spent working so they can be properly compensated.
  7. Avoid classifying too many managers or assistant managers as “exempt” from FLSA and state minimum wage and overtime requirements. Carefully consider the unique factors in each restaurant and seek competent legal advice.
  8. While the FLSA does not require that they be provided, do not forget about meal and rest breaks. Also keep in mind that the FLSA does regulate whether break time must be paid when breaks are provided.
  9. Understand the FLSA and state child labor restrictions since many restaurant employees tend to be under 18. This includes restrictions on hours worked and the occupations underage employees can have.
  10. Provide easy means for employees to bring forth questions or concerns about their paycheck. Answering all questions and resolving concerns internally is easier, quicker and cheaper than a lawsuit.

Ensuring wage and hour compliance in advance is vital to avoid high costs associated with litigation under the FLSA and state wage and hour laws. “Remember, wage and hour compliance can be a tedious task, but it sure beats defending class or collective action litigation,” explained Coleman.

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