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.

Protect your business from employee lawsuits. Invensure offers Employment Practices Liability Insurance at great rates.

“…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.

Restaurant Business Insurance

Restaurant business insurance is a lot like insurance for other businesses with the addition of coverages that are specific to the food industry. However, don’t fall into the trap of thinking that any old insurance agent can help you get the right policy. As a restaurant owner or manager, you should only work with an agent who specializes in restaurant insurance. That way you can be confident that you have the right coverage to protect you financially.

A common problem in the food industry is that restaurant owners go through an insurance broker (or agent) who does not have any food industry experience. They use a friend of the family or some other broker and wind up in a mess of trouble when something goes wrong.

Recently, there was a case where a restaurant owner allowed a general business insurance agent look into policies for them. When it was time to renew, the agent promised them low rates, and managed to lower the premium. The restaurant owner was happy about this until two loss events occurred. When these losses happened and the owner went to the insurance company, it turns out the restaurant was not covered because the agent had dropped the coverages on renewal! An agent with restaurant would have never dropped these coverages, which ended up costing the owner over $100,000!

A few basic things you should know about California Restaurant Business Insurance:

Employment Liability Practices Insurance
In California, about 60% of restaurant owners will face employee lawsuits this year. In the restaurant industry, the hours that wait staff works can be irregular and unpredictable. California has tough wage and hour laws and new rules make them even more confusing. Restaurant owners need Employment Practices Liability Insurance to protect themselves financially against employee lawsuits.

Food Specific Insurance Coverages
Several types of insurance coverages are made specifically for the food industry. Depending on the type of restaurant you have and the volume you sell, your insurance agent will help you get the appropriate coverage:

  • Food Product Liability
  • Food Spoilage Coverage
  • Food Contamination Coverage
  • Food Product Recall Coverage

A qualified agent can help you determine exactly which policies you need to help protect your business.

Insurance for the Restaurant Building and Equipment
Like other business insurance policies, you will need insurance coverage for your building and equipment, as well as

California Workers’ Compensation Insurance
All employers in California are required to carry workers’ compensation insurance for their employees.

Other Types of Business Insurance
Business interruption coverage, valet coverage, auto, liquor liability, bailee coverage, and cyber crime insurance policies are just a few of the other products available. Work with your agent to determine which insurance you need for your business.
In sum, speak to an expert who works with restaurants in California for their insurance. You want someone who knows your industry inside and out who can help you best protect your business.

Invensure specializes in insuring restaurants in Southern California. Restaurant business insurance experts are available.
Call (800) 331-4700

Food Liability Insurance. What is it and why do you need it?

When you are producing food for the public, it doesn’t matter if you serve it in a restaurant, a café, or plan to sell it in stores or at a farmers’ market. If someone gets sick from the food you make, you could be liable for the cost of their medical expenses, or worse, if you get sued on a mass scale by a number of individuals who became ill.

To protect yourself, food product liability insurance is a must. There are several different forms of this type of insurance including product liability insurance, food contamination coverage, and food recall coverage, to name a few. These forms of coverage would be in addition to your regular liability or umbrella insurance policies.

Even if you do not have your own restaurant, kitchen, or bakery, and are producing food in a facility that you rent, most commercial kitchens will require you to have insurance. Also, if you are manufacturing food for distribution, most major retailers will require that you have suitable insurance before they will make a deal with you. Farmers’ markets generally require vendor liability insurance.

Food liability insurance is relatively inexpensive, and will vary depending on the type of food you are producing and how you plan to distribute it. For example, most baked goods and items that do not require refrigeration are generally considered lower risk. On the other hand, food products that are considered specialty health products (gluten-free, organic, etc.) can be a higher risk.

In general, the cost of your insurance will be related to the risk you are assuming and will be affected by the following factors:

• the amount of products you sell or supply
• quality control and safety measures in the manufacturing process
• where the manufacturing is located
• type of product and the specific market for that product
• your insurance history and any loss claims

Food product liability is a complex subject and you should only work with an expert who has a lot of experience in the food industry. A common mistake made by food producers is to try and find the insurance they need for themselves, or worse yet, use a friend who has little experience insuring for the food industry.

Invensure has a complete program for the food industry in Southern California. Call (800) 331-4700 and ask for Vicki, the food industry specialist.

4 Risks Restaurant Owners May Not Have Considered

Restaurant owners have expanded their operations to help increase their bottom lines. Along with some of these creative additions to combat the recession  come increased liabilities they may not have considered.

Some things they may have done to bring in more revenue are delivering meals, start a catering business, sell new trends of food such as gluten-free or organics, and accept non-traditional forms of payment via smart phone.

While these creative methods of expanding your business may have improved your bottom line, restaurant owners may not have considered the extra liability they have assumed in doing so.

Delivery Services

If you have recently added delivery of meals to your customers, did you hire drivers with their own cars? If so, there are several considerations you must address. If you should face a lawsuit because of a vehicle accident with one of your drivers, these items can halp you reduce your liability.

Did you know that regular commercial auto coverage does not cover liability for drivers who use their own cars? That is what hired and non-owned auto coverage is for. You should also make sure you have adequate umbrella coverage to cover awards for injuries from vehicle accidents.

In addition to insurance issues, you should also implement special hiring screenings to check the DMV records of your drivers. Your new drivers should have minimal tickets, no at-fault accidents, and no DUIs. This ensures you have a driver with safer driving habits. You should also make sure that the driver has the necessary insurance coverage and their policy does not exclude business operation.

Another thing you should do is make sure that you develop strong employment policies for your drivers. These policies should outline safe driving and liability reducing practices for while they are on the job, including no cell phone use, obey all speed limits, no drinking on the job, no passengers while on the job, proper vehicle maintenance, and other restrictions you deem as necessary to ensure minimal liability.

Catering

There are several important aspects regarding catering and offering food off-site that a restaurant owner should consider as liabilities. These include workers’ compensation, liquor liability, and the delivery driver considerations mentioned above.

When employees are delivering food off-site, they may face additional chance of injury. First, they may be lifting heavy trays and moving them from a delivery truck to a location. Next, they are in a foreign environment and not as familiar with the terrain. This combination of factors makes them more prone to injuries such as back strain and slip, trip and fall injuries. You should make sure your workers’ compensation policy includes events outside your restaurant, as not all do.

The next consideration is liquor liability. Make sure your policy includes off-premises liquor liability. Staff should also be trained to limit serving guests who have had too much, and avoid serving minors.

If you cater a lot of events, your insurance should cover that. If you only cater a few events a year, it may be more cost effective to get individual coverage for each event. Talk to a qualified agent when making these types of considerations.

Specialized Ingredients

There are definite trends in the food industry considering types of foods. Such trends include organic, raw, local, and gluten-free food, just to name a few. As times change and certain foods fall in and out of fashion, you may want to consider your liability that comes with each new trend.

While health considerations are a main driver of these types of trends, it does not exclude them from the risk of contamination. While large retailers have strong food recalls in place, smaller local farmers may not have as much experience of control. You should ask to see their proof of liability insurance when making a deal with them. In addition, it is a good idea that they are insured with a reputable insurance carrier and that your restaurant is added as an additional insured.

Customer Credit Protection & Cyber Security

Every day there are more and more ways for customers to pay for their meals. An increasing trend is to accept forms of payment over a website or on a customer’s smart phone. With more ways to accept payment comes more potential liability.

To protect themselves, restaurant owners should consider cyber liability insurance. This will protect them in the event they are hacked into and customers suffer from credit damage as a result.

Restaurant Workplace Liability: Slips, Trips, and Falls

In the restaurant and food industry in Southern California, slip, trip and fall injuries are some of the most common Workers’ Compensation claims.

According to OSHA, “Slips, trips, and falls constitute the majority of general industry accidents. They cause 15% of all accidental deaths, and are second only to motor vehicles as a cause of fatalities.”

Employers are responsible for the safety and health of their employees. In addition to OSHA requirements, employers who follow a good safety program will benefit from the reduction in the cost of their workers’ compensation insurance premiums over time.

To help prevent slip, trip, and fall injuries, OSHA requires that restaurants do the following:

  • Keep all places of employment clean and orderly and in a sanitary condition [1910.22(a)(1)].
  • Keep floors clean and dry [1910.22(a)(2)]. In addition to being a slip hazard, continually wet surfaces promote the growth of mold, fungi, and bacteria that can cause infections.
  • Provide warning signs for wet floor areas [1910.145(c)(2)].

Invensure offers industry specific safety programs and insurance for the food industry and restaurants in California. There is a special Workers’ Compensation Cost Reduction Program specifically geared to the food industry that is designed to lower risk and associated costs.

Call (800) 331-4700 to learn more.

Insurance for California Restaurants

Invensure is pleased to announce a new program that is specifically designed for the restaurant industry in Southern California.

Many restaurant owners make the mistake of using a friend of the family or just shopping around on their own for restaurant insurance. However, in our experience, we have seen disasters strike because of the inexperience these insurance agents have with the restaurant industry in California.

California restaurants have different insurance needs than other businesses, and only a broker who is familiar with the unique risks that face the restaurant industry will provide the best protection for a restaurant owner.

Also, an independent broker works with many different insurance companies and can find a policy that best suits YOUR needs.

So, if you own or manage a restaurant in Southern California, give Invensure a call. Our restaurant insurance specialist will take care of you and protect your business better than anyone else can. Speak to a restaurant insurance and risk management specialist (800) 331-4700.