4 Best Practices to Maintain your Restaurant’s Compliance with US Labor Laws and Regulations

Oct 18 2016

Restaurant Management Labor Compliance

Just as you would trust your health with a doctor, the government trusts restaurant owners with labor integrity. Did you know, in a recent article released by Restaurant Business Online, 95% of Restaurants in Austin, Texas, that were audited were not in compliance with the federal government’s wage and hour regulations during an 8-month period in 2015-2016?

Only 5% of restaurants in this study were accurately accounting for wages owed to employees in cases such as tipped minimum wage. Imagine the magnitude of restaurants outside of Austin that are in violation. This creates a potential catastrophe for the reputation of the restaurant industry.

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So how do you ensure your restaurant is in compliance with U.S labor regulations?

  1. Know the difference between Labor Laws and Labor Rights.

Labor Laws- These laws originated to protect employees from unethical work and compensation correlations. Labor laws vary around the world in complexity and amount. The industrial revolution and its uncanny working conditions were the main ingredient to the tough U.S labor laws that exist today. Key labor laws address items such as number of hours an employee can work, ages for employment, medical leave acts, and minimum compensation. Additional state and local labor laws may also exist that pertain to particular wages and working conditions.

Labor Rights- Labor rights are similar to labor laws; however, labor rights provide employees with security. These rights include the right to breaks, the right to report unhappy working conditions, the right to timely pay and, most importantly, the right to unionize. Thus, allowing for the democratic voice of workers to their employers. Labor rights are a necessity to ensure labor laws are being obeyed.

  1. Be aware of the Laws and Rights.

Labor laws and rights are constantly evolving and multiplying. Stay on top of these. Knowing these laws and rights will be the key to avoiding violations such as the ones our friends in Austin received. The United States Department of Labor website is a great resource in aiding in this knowledge. Keep updated prints of the labor laws and rights posted throughout your restaurant. Have your team and managers review these so that they can discuss them with employees.

  1. Listen to Your Employees.

No one will pay more attention to laws being obeyed and rights being addressed than your employees. Wouldn’t you want to make sure you were receiving the right pay, benefits, and breaks that you were entitled to from your work? If an employee voices concern, take the time to investigate their claim. It is best to identify the error and correct it. Even if the claim turns out to be erroneous, it is better to investigate the claim than it is to be out of compliance.

  1. Audit yourself.

There are many different auditing platforms out there you can use as a resource to ensure compliance during the year, such as software programs, consultants, and third party labor contractors. These platforms may come with a sizeable expense; however, in relation to the cost of violations and back pay, this expense can be microscopic.

U.S Labor laws and rights are vastly complex and at times rather tedious. However, without our employees, we would have no business. To keep our employees, we must compensate them according to their work. The government recognized this when they created the modern labor laws in the 19th century. Now we are trusted to protect our employees with these laws and rights. In return, our employees can trust us.

Still worried about Labor Compliance? Ensure that labor compliance policies are properly enforced in your restaurant with Ctuit Software's Special Pay Module.

Amanda Wilkening

Amanda Wilkening

Amanda has over 10 years of restaurant experience ranging from Serving, FOH Training to bookkeeping. More recently, Amanda was a member of the client services department at Ctuit where she trained new clients on RADAR and assisted restaurant management and executives in their day to day reporting and operational questions.