Restaurants Targeted by US Labor Department Wage and Hour Division to Prevent Wage and Hour Violations

The US Department of Labor is launching an initiative to enforce wage and hour standards for restaurants in Portland, Oregon, according to a press release from the department on April 5, 2012.

“The restaurant industry employs some of our country’s lowest-paid workers, who are particularly vulnerable to exploitation,” said Jeffrey Genkos, director of the Wage and Hour Division’s Portland District Office.

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“…these employees are reluctant to step forward and complain when subjected to wage violations. Investigators will be making unannounced visits to restaurants throughout the area to conduct investigations, remedy widespread labor violations, and ensure that law-abiding employers who pay their workers full and fair wages are not placed at a competitive disadvantage.”

Because of pressure on restaurants to serve low cost meals and still turn a profit, the food service industry is rife with wage and hour violations. In addition, not all restaurants are in compliance with OSHA safety standards.

Safety Training for California Restaurants

Common wage and hour violations include:

  • Not paying for all hours worked
  • Employees performing work duties “off the clock”
  • Designating employees as exempt from overtime when they are not exempt
  • Paying nonexempt employees a flat salary regardless of any overtime they have worked
  • Paying cash wages off the books
  • Not paying employees proper minimum wage and overtime
  • Illegal deductions from workers’ wages for uniforms, breakages, customer walk-outs, and cash register shortages
  • Child labor violations, such as minors to operating hazardous equipment (dough mixers, meat slicers, trash compactors, etc.) or working excess hours

California is also cracking down on wage and hour violations for restaurants. In a high profile case, Brinker Restaurant Corp is being sued for wage and hour violations. This is a very expensive case for them to try.

Since the crackdown seems to be an emerging trend that will only grow bigger, it is important that you stay up to date with OSHA compliance for restaurants, safety standards, and know all the wage and hour laws for your industry.

It is also a good idea to have Employment Practices Liability Insurance (EPLI) for your restaurant, because if you are sued by your employees, the coverage can mean the difference between your business surviving or going belly up.

Invensure’s “Insurance 4 Food Industry” Program is a one stop solution for your California restaurant. We have industry experts who can assist you with your insurance, OSHA compliance, safety programs, and other risks that can affect your business.

Invensure’s holistic approach will not only help you to protect yourself if a problem occurs, it can actually prevent problems from happening in the first case and can lower the costs associated with risk for the long term.

Call (949) 756-4100 to learn more.
We are happy to assist you.


California Restaurant Fined $239,000 in Wage Theft Violations

A restaurant in San Francisco had to pay 14 employees more than $239,000 for wage theft violations, according to the California Labor Commissioner.

According to California law, employees who work more than eight hours in a day are required to be paid 1.5 times their normal pay rate for the first four hours over eight, and double time after 12 hours in a day. An employee who works more than 40 hours in a week is entitled to receive 1.5 times their normal pay rate for any hours over 40.

However, in the case of the Big Lantern restaurant, employees did not receive overtime pay and some salaried employees did not even receive minimum wage after working overtime, according to attorney David Balter.

Underpaying workers is a large problem in the restaurant industry, and the labor commissioner is getting tougher on restaurants in general. To protect yourself as a restaurant owner, you should get Employment Practices Liability Insurance.

If you are in Southern California, call the restaurant specialists at Invensure to learn more: (949) 756-4100.

Increase in California Restaurant Wage & Hour Violation Citations

Why has there been a recent increase in wage and hour violations for California restaurants?

“It’s a commitment to being more proactive, more aggressive, conducting more meaningful in depth investigations, and having deputies spend more time in the field and getting wages back in workers’ pockets.

“It’s also about letting the good employers who are following the law know that we are there to protect them,” said According to California Labor Commissioner, Julie Su.

Su says most investigations start when workers complain. This may lead to an investigation where the restaurant is visited, employees are interviewed, the restaurant is audited and payroll records are inspected thoroughly.

In many cases, workers receive a payout. If you own a restaurant, it’s a good idea to review the wage and hour laws to make sure you are in compliance. Next, employment practices liability insurance can help protect you financially in the event of a lawsuit.

If you have a restaurant in Southern California and would like to know more about employment practices liability insurance, call the restaurant insurance experts at Invensure, (949) 756-4100.

Another Reason Restaurants Need Employment Practices Liability Insurance: Panda Express Sued by Employees

In yet another employee lawsuit, Panda Express was sued by a former employee because she was not allowed to sit down while she was working as a cashier.

According to California Labor Code and Wage Order 7-2001, “all working employees shall be provided with suitable seats when the nature of work reasonably permits.”

The suit is an attempted class action by all cashiers for the company. Rite Aid and Nordstrom are facing similar lawsuits.

We will be watching this case as it evolves, because there seems to be a bit of ambiguity in the term “nature of work reasonably permits.”

If the employee wins this case, it will mean drastic changes for the entire food service industry.

In the meantime, it is just another example where Employment Practices Liability Insurance could help protect the restaurant financially. Learn more about Employment Practices Liability Insurance for Restaurants or call our restaurant insurance experts at (949) 756-4100 if you have questions.

Brinker Restaurant Corp. v. Superior Court: A case study for wage hour laws and employment practices liability insurance

Brinker Restaurant Corp. v. Superior Court is a high profile case that will set the standards for wage and hour law. While the outcome of the case may benefit numerous employers by clarifying the gray areas of California wage and hour laws, Brinker Restaurant Corp. has been through a nightmare with the class action lawsuit that has been dragging on for years.

Protect your restaurant from lawsuits related to Employment Practices Liability

Protect your restaurant from lawsuits related to Employment Practices Liability

What if this were you?

Brinker Restaurant Corp is no small employer. Best known for its franchise brands, Chili’s Grill & Bar and Maggiano’s Italian Restaurant, Brinker has more than 1,500 restaurants in 32 countries worldwide, and employs over 10,000 people.

Hopefully Brinker’s international success can afford it the lawyers it needs to keep this 3-year case going. The outcome of this lawsuit will clarify the issue of what exactly is an employer’s obligation to provide meal periods to non-exempt employees.

Even though Brinker can afford a team of lawyers and Human Resources specialists, its knowledge of wage and hour law was still fuzzy enough for them to be faced with a class action lawsuit.

The case stems from a law that states, “no employer shall employ any person for a work period of more than five (5) hours without a meal break of not less than 30 minutes . . . .”

Brinker, like many employers, interpreted this to mean employees who work more than 5 hours get a meal period and employees who work more than 10 hours get a second meal period. However, the plaintiffs in the case argue that an employee who works over 5 hours is entitled to a second meal period, and if the employer did not provide one, the employee should be entitled to a one-hour penalty.

Wage Theft Prevention Act of 2011

Fuzzy interpretations of the law is the reality in California. Wage and hour laws are numerous, complicated and ever changing. For the very reason that most employers are not legal experts, 6 out of 10 restaurant owners will face employee lawsuits this year.

Scary, isn’t it?

So what can you do to protect yourself and your restaurant?

The cost of a lawsuit is very high, and we don’t want to even imagine what Brinker’s costs are for the past 3 years of legal defense. An average restaurant owner faced with these types of charges would have to file for bankruptcy.

Employment Practices Liability Insurance (EPLI) provides protection from claims against employees, former employees, and potential employees. It covers discrimination, sexual harassment, and other legal action that arises from employment practices.

You should get an EPLI policy as soon as you intend on hiring an employee. Your restaurant can be vulnerable starting with the pre-hiring process, so it is best not to take the risk. Also, most investors and directors require it since they can be held liable in these types of suits.

If you would like to learn more about Employment Practices Liability Insurance for your restaurant in California, call (800) 331-4700 and ask to speak to our restaurant specialist.

Invensure is here to help. We will help protect you from employee lawsuits, and hopefully you can avoid a nightmare like the Brinker Restaurant Corp. is going through. Call now.