Labor Law And Waitresses: What's The Verdict?

Waiters and waitresses are subject to labor laws, including those related to wages, tipping, uniforms, scheduling, breaks, and overtime pay. These laws vary based on location and the size of the restaurant's staff, and they are enforced by the U.S. Department of Labor's Wage and Hour Division. For example, the federal minimum wage is $7.25 per hour, but it is higher in California, at $14 per hour for businesses with 26 or more employees and $13 per hour for those with 25 or fewer. In addition, labor laws outline rules for tipped employees, who may be paid a lower cash wage as long as their total earnings, including tips, meet or exceed the minimum wage. These laws also address issues such as tip pooling and credit card processing fees. Understanding and complying with labor laws are crucial for restaurant owners and operators to ensure fair compensation for their staff and avoid legal issues.

Uniforms: who pays?

The Fair Labor Standards Act (FLSA) does not require employees to wear uniforms, but it does allow employers to mandate them. If an employer requires a uniform, the cost and maintenance of the uniform are considered a business expense. This means that the employer must pay for it, and they can deduct it as a business expense. However, if employees are required to pay for their uniforms, the cost of the uniform cannot bring their wages below the minimum wage.

Some states don't allow for uniform deductions at all, and others have additional requirements. For example, some states prohibit employers from charging employees for uniforms with a company logo or that cannot be worn as streetwear.

In the case of uniforms that are also Personal Protective Equipment (PPE), employers must pay for them if they are required by the Occupational Safety and Health Administration (OSHA). If OSHA does not require it, employers can charge their employees for the cost.

It is important to note that the Department of Labor (DOL) does not consider tips when determining whether the uniform cost would drop an employee's wages below the minimum wage. As many employees working in restaurants earn at or below minimum wage, it would not be permissible to charge these employees for a uniform.

To avoid potential wage and hour violations, it is recommended that employers provide required uniforms for employees instead of having them purchase their own or deducting the cost from their paycheck. Another option is to require employees to wear a more general outfit that the DOL does not consider a uniform, such as dark jeans and a generic white shirt.

Predictive scheduling laws

These laws are complex and vary by location, requiring nimble timekeeping and payroll systems. For example, in San Francisco, employers must provide schedules at least two weeks in advance and make no changes with less than seven days' notice. Seattle also requires two weeks' notice and compensation for any changes made after the schedule has been posted.

Other requirements under predictive scheduling laws include record-keeping, notifying employees of potential on-call shifts, allowing existing employees to take on hours before hiring new workers, and penalties for last-minute schedule changes.

While predictive scheduling can lead to confusion due to the lack of uniformity across jurisdictions, it offers benefits to both employees and employers. Employees gain a degree of certainty around their work schedules, enabling them to better manage childcare and other commitments, leading to improved job satisfaction and engagement. Employers may benefit from increased productivity and reduced employee turnover.

To comply with predictive scheduling laws, employers should understand their legal obligations, develop compliant business practices, provide training on these laws, and use scheduling apps to efficiently create and share employee schedules.

Meal and break laws

Number and Duration of Breaks:

• The number of breaks an employee is entitled to depends on the duration of their shift. For example, in California, a shift longer than 3 hours and 29 minutes warrants at least one 10-minute break, while a shift between 6 and 10 hours requires at least two rest breaks.
• Meal breaks are mandatory for shifts longer than a certain duration, typically 5 hours. This meal break should be at least 30 minutes, and employees should be free from any work-related tasks during this time.
• The duration and frequency of breaks may vary depending on the state and local regulations. For instance, in some states, employees working 8 or more consecutive hours are entitled to a 30-minute break and an additional 15-minute break for every additional 4 consecutive hours worked.

Payment During Breaks:

• In certain states, such as California, short rest breaks (e.g., 10-minute breaks) are paid, and employees should not be forced to clock out. However, employers can have unpaid meal breaks.
• In other states, employees must clock out before taking a break, and employers are not required to pay for those breaks.

Compliance and Enforcement:

• Compliance with meal and break laws can be challenging in the fast-paced restaurant industry. It is crucial for restaurants to have written policies regarding breaks and ensure that managers are trained to enforce these policies and encourage employees to take their breaks.
• Non-compliance with meal and break laws can result in daily penalties for employers. Employees who feel they are not receiving adequate breaks can seek legal advice or file complaints.

Tipped wages and overtime pay

Waitresses and waiters are generally paid a "tipped" hourly rate of pay, which is less than the minimum wage. This tipped minimum wage is the lowest amount an employee can earn per hour, including both a basic cash wage paid by the employer and a tip credit made up of tips. Federal law in the U.S. sets the minimum base wage at $2.13 per hour, but many states mandate a higher level. For example, in California, the minimum wage for tipped employees is $15.64 per hour, which includes a minimum cash wage of $14 and a maximum tip credit of $1.64.

When it comes to overtime pay, because waitresses and waiters are often paid a "tipped" hourly rate, calculating the correct overtime rate can be challenging. If a tipped employee is paid using the tip credit, the correct overtime pay is calculated by taking the minimum wage, multiplying it by 1.5, and then subtracting the tip credit (the difference between the legal minimum wage and what restaurants are allowed to pay tipped employees). Where restaurants often go wrong is by simply multiplying the tipped employees' hourly rate by 1.5, which results in underpayment of overtime wages.

Another tricky area for calculating overtime is when dealing with a service charge or auto-gratuity. Normally, employers do not need to include tips when calculating overtime pay, but service charges are an exception. Employers are required to include the service charge when determining the employee's regular rate of pay, which will effectively increase the employee's overtime rate.

Employee classification

For example, an employee with a managerial title, such as "Manager on Duty," may not actually have the responsibility of managing other employees and thus may not meet the requirements for exemption. To avoid potential lawsuits, it is important for employers to holistically evaluate an employee's primary duties, including their ability to hire, discipline, and terminate other employees.

Additionally, when it comes to tipped employees, such as waiters and waitresses, there are special rights and restrictions that vary by city and state. These employees often have a complex "tipped" rate of pay, which can impact their eligibility for overtime pay. It is the employer's responsibility to ensure that tipped employees are declaring enough tips to earn at least the minimum wage, and to make up the difference if they are not.

Furthermore, in certain states, employers are allowed to pay a "tipped" rate that is less than the minimum wage to employees whose duties and earnings qualify them for this type of pay. However, this can lead to complexities in calculating the correct overtime rate. For example, if a tipped employee is paid using the tip credit, the correct overtime pay is calculated by taking the minimum wage, multiplying it by 1.5, and then subtracting the tip credit.

In summary, correctly classifying employees as "exempt" or "non-exempt" and understanding the specific laws related to tipped employees are essential for restaurants to comply with labour laws and avoid potential lawsuits and financial penalties.

Frequently asked questions