Four Key Areas to Address Before 2020

Compliance, especially for restaurants with multi-state operations, must be a top priority to ensure you are aligned with federal, state, and local laws. We want to counsel our clients and friends in the restaurant industry to be vigilant and avoid breaking the law.

Four Areas to Review Now:

1. Working Off-the-Clock

Non-exempt employees that work when they are not ‘clocked in’ are a huge risk creating minimum-wage and overtime liability. The Fair Labor Standards Act (FLSA) requires every employer to pay employees at least federal minimum wage ($7.25/hour). Many states have raised the minimum wage requirements above the federal amount. If the state amount is higher than the federal amount, employers are required to pay workers the higher amount. If a lawsuit is filed, employees who provided services for a restaurant while not clocked in can claim the restaurant failed to pay them minimum wage or overtime. That can quickly become expensive to defend.

2. Employee Classification (or Misclassification)

Restaurants usually have a blend of exempt and non-exempt employees. Exempt employees (must be paid a salary and perform certain qualifying duties) are exempt from overtime obligations outlined in the FLSA. They do not receive overtime when they work more than 40 hours in a work week. Typically, a restaurant’s manager-level employees qualify as exempt. However, almost all other employees of a restaurant are treated as non-exempt and qualify for overtime pay if they work more than 40 hours each week. Restaurants should audit their current employee classifications to ensure compliance with appropriate wage and hour laws.

3. Child Labor Law Restrictions

It is not uncommon for restaurants to employ minors throughout the year. There are some guidelines to be aware of to help restaurants avoid penalties and fines. Federal and state laws restrict the type of work minors can perform, the number of hours they can work, and when the work can be performed. The amount of allowable work hours depends on if school is in session or not and the minor’s age. It is important to review your scheduling practices, especially during the school year, to avoid scheduling violations. Restaurants should review applicable child labor laws, make sure their managers are clear on the guidelines, and provide training if necessary to ensure compliance.

4. Sexual Harassment Prevention Policy and Training (Especially for The District of Columbia)

The District of Columbia recently passed a law requiring employers of tipped employees to implement sexual harassment policies and prevention training. For example, the law requires publicly posting and distributing to employees a compliant sexual harassment prevention policy. The law also requires restaurants to:

  • File their compliant sexual harassment prevention policy with the D.C. Office of Human Rights
  • Document all instances of sexual harassment
  • Complete annual reporting requirements
  • Complete training requirements by December 12, 2020

Four Steps to Take Now.

  1. Update Employee Handbook.
  2. Monitor Regulations.
  3. Optimize iSolved.
  4. Review Employee Classifications.

Can Payroll Network help with these action items? Yes! Payroll Network now offers HR Advisor in addition to the iSolved platform.

Adding HR Advisor is like hiring a part-time HR executive who happens to be an expert with the iSolved platform. Your HR Advisor will audit your HR systems and data, recommend goals, and work with your team to develop and execute an action plan. This will help keep your organization compliant and on top of new developments as they arise. We partner with you and help address the areas above as part of our relationship with you.

To learn more about HR Advisor, contact us and we’ll set up a 15-minute HCM tune-up see if this is a fit for you.

Let’s connect! Contact me at or 301-339-6005.

Kyle Wade