Employment Law and Restaurant Workers in California

Restaurant workersFederal Laws That Apply to Restaurant Workers

Restaurant workers have always been treated differently under federal employment laws such as the Fair Labor Standards Act (FLSA). For example, under this law, tips can be included in the hourly pay (the tip credit), but an employer cannot pay less than $2.13 an hour. This provision of the law alone can lead to confusion and problems between employers and restaurant workers. How the amount of employee tips would be determined is just one of many unanswered questions.

The issue of tips needs to be handled carefully by employers governed by federal law (or state law that is the same as federal law). By law, employers must inform workers about the way they intend to use the tip credit provision of the law. An employer must ensure that an employee receives at least the federal minimum wage of $7.25 an hour. If it can be shown that an employer is not paying at least minimum wage, he or she is in violation of the FLSA.

Employers must also pay overtime (time-and- a-half) for any hours worked over 40. Moreover, they must pay that overtime using the prevailing minimum wage, not the restaurant wage of $2.13. Other problems include how uniforms are paid for. If an employer requires workers to buy their own uniforms through payroll deduction, that employer cannot deduct the cost at a rate that would leave the employee below the minimum wage. In short, employers cannot try to recoup the cost of the uniforms it bought for employees all at once but must do it gradually to keep workers at or above minimum wage.

California Law for Restaurant Workers Is Different From Federal Law

The FLSA is federal law. California employment law is different. For example, the minimum wage in California is $9 an hour. On January 1, 2016, it will increase to $10 an hour. 2015. However, some cities, such as Sacramento, already have higher minimum wage rates.

Other provisions of California labor law prohibit using the tip credit to get to the minimum wage amount, as is possible in most other states. In fact, California is among a handful of states prohibiting the tip credit; these include Washington, Alaska and Oregon. However, an employer can require a tip-pooling arrangement so that all customer-facing employees such as wait staff and hosts share equally in tips. Employees who do not interact with customers, such as cooks, dishwashers and other kitchen employees, may not participate in tip-sharing arrangements.

Federal law does not require a break period; California law does. In this state, employers cannot charge restaurant workers for required uniforms or deduct the cost of uniforms from employees' pay. If an employee reports for a regular shift and is sent home, the employer is required to pay at least one hour of regular pay even though the employee did not work. Provisions such as these in California employment law provide protections to employees that are not available to workers in other states.

Threats to California Restaurant Workers

However, despite the more forward-leaning employment laws in the state, restaurant workers in California still face challenges. For example, if Governor Jerry Brown does not sign recently passed legislation outlawing mandatory arbitration requirements, restaurant workers with complaints about labor law violations will continue to be required to give away their right to a day in court. If the governor signs the bill into law, it will be a victory for restaurant workers and other traditionally low-paid employees. If he does not, restaurant workers will continue to face the hard choice of remaining employed vs. seeking justice through the courts.

Another challenge to California employment law is an effort in Sacramento to eliminate the so-called carve-out, which refers to the practice of not counting tips in paying restaurant staff minimum wage. However, local labor advocates point out that the city would be in violation of state law prohibiting tip credit if they enacted such a provision. In fact, other California cities have considered this change, but have dropped it for fear that they would be violating state law. How the governor responds is like the outcome of the Sacramento proposal - it remains to be seen.

The California Restaurant Association is behind proposals such as this one and has lobbied extensively to dissuade the governor from signing the pending legislation, contending that it will add to operating costs, increase restaurant prices and reduce jobs.