Happy Fourth of July holiday! Except for many restaurant workers…

July 4, 2012

Fourth of July FireworksAs the nation celebrates the Fourth of July holiday on Wednesday, many people will have the day off to relax, enjoy a picnic or barbeque, and watch fireworks displays.

But for most restaurant and service industry workers, the Fourth of July and other holidays are a full eight-hour work day or evening, and sometimes even longer.

Most waiters, waitresses, dishwashers and other hospitality staff can accept this arrangement as a part of working in the service industry — as long as they are fairly compensated for their time and efforts.

Now some state and federal labor authorities are cracking down on employers that violate wage and hour or overtime requirements.

State agencies and feds heat up the kitchen on restaurant owners

In the past six months, several state agencies and the U.S. Department of Labor have taken enforcement actions against restaurant owners in food meccas like L.A., San Francisco, and New York City — as highlighted by an article in InsideCounsel.com.

In April, the U.S. Department of Labor began campaigning on wage and hour and overtime requirements for restaurants in San Francisco, Portland, and L.A.

In March, the California Department of Industrial Relations announced that 14 San Francisco restaurant workers would receive nearly a quarter of a million dollars in an award compensating them for overtime worked but not paid. New York officials also fined a restaurant in New York City about $200,000 for violations of state and federal wage laws and allegations that it attempted to silence employees during the investigation.

The federal courts have also proven amenable to employee claims for unpaid wages and overtime under the Fair Labor Standards Act (FLSA).

A Kansas federal court awarded monetary damages of $200,000 to workers for claims including back wages after a Wichita restaurant was held in contempt of court order for failure to comply with the FLSA (slip copy available on WestlawNext and Westlaw at 2012 WL 1059876).

Restaurant workers that worked for the restaurant group owned by Mario Batali and Joseph Bastianich settled with workers for in excess of five million after a New York federal court conditionally certified all tipped workers employed by the restaurant group’s eight restaurants as a class in 2011(unreported opinion available on WestlawNext and Westlaw at 2011 WL 1770827).

Wage and hour and overtime laws and regulations can be complex and many agencies take an interest in compliance.

Federal and state labor authorities have obviously stepped up enforcement. A third player not mentioned in any of these enforcement actions and litigation, the Internal Revenue Service, may also have a role in employee wage issues. Given this complex brew, restaurateurs and other business owners as well as their legal departments need to pay attention to the laws and regulations that govern relationships with employees.