human resourcesLabor Laws

A Restaurant Owner’s Employment Law Compliance Checklist

Remaining legally compliant in an ever-evolving industry can be tough. Especially when most of the regulations that govern the restaurant industry live on the state level.

For business owners that have multiple franchises spread out across the country, this can create a litigious nightmare where what’s legal in one state can get you in trouble in a neighboring one.

However, there is some good news to share: a lot of regulatory compliance for restaurants can be boiled down to overarching themes that are present in multiple states.

Here is a checklist of items every restaurant owner needs to be aware of as the calendar turns to 2020, and beyond.

  1. Correct Employee Classification

How many of your employees are classified as Exempt? This classification can have huge implications on your business if some employees who qualify as exempt are not classified as such. For an employee to be classified as exempt—meaning they are exempt from federal overtime laws—they must be in a decision-making role and make at least $455 per week for at least 50 percent of the year. This definition basically includes all management, administrative, and executive employees. However, some hourly employees can also fall into this classification if they are considered a “shift lead”. A semi-painless way of ensuring you stay compliant with employee classifications is to do a semi-annual audit to ensure all your employees are classified correctly.

  1. “Off-the-clock” Work

Under no circumstances is it acceptable or legal to ask or require a non-exempt employee to work “off-the-clock”, meaning perform job duties for which they are not being compensated. This includes performing menial tasks like sweeping after they’ve clocked out for the night. If a manager asks (or requires) a non-exempt employee to perform job duties either before they clock in or after they clock out, that manager is making the business vulnerable to claims that it isn’t paying employees the federal minimum wage. Be sure all managers are trained on this law because it can save you a lot of money in the long run.

  1. Public Accommodations

Title III of the American’s With Disabilities Act requires businesses to provide equal public accommodations to people with disabilities as they would for the general public. Those accommodations include seating in assembly areas, removing physical barriers to enter the place of business, and providing paths to travel within the place of business. Oftentimes, ADA compliance “testers” will enter a place of business to ensure they are following the law. If not, the tester will file a lawsuit, which can end up being very costly.

  1. Ban the Box

Multiple states have passed laws making it illegal for an employer to ask an applicant about their criminal history during the application or interview process. Businesses can still run background checks and rescind employment offers if any negative information turns up, but these laws have required employers to revise the way they go about hiring. Make sure your application doesn’t mention or imply that an applicant needs to reveal their criminal history to be considered for a position. Otherwise your business becomes vulnerable to employment discrimination suits which are very costly and very time consuming.

  1. Marijuana Use

There are now more states that have legalized marijuana use for either medicinal or recreational purposes than those that have not. This can create hazards for employers who make the choice to not hire people who use the substance. All businesses must comply with the laws of the state they reside in, but that doesn’t mean that a restaurant owner must hire someone who uses marijuana over someone who doesn’t. Restaurant owners should evaluate their drug testing protocols to make sure they follow state laws. They should also seek advice from a competent counsel when revising these protocols to ensure they are not opening themselves up to employment discrimination lawsuits.


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