Every Restaurant employer and Restaurant employee should familiarize themselves with the California Labor Code and Industrial Welfare Commission Wage Order No. 5 in order to avoid these TEN Common California Labor Code Violation pitfalls:
1. Employees must be paid at the prevailing minimum wage
California's current minimum hourly wage requirement is $10.50 for Restaurants having 26 or more employees and $10.00 per hour for Restaurants employing 25 or less. Restaurants are not permitted to offset minimum wage with an employee's tips. Tips are considered a bonus, awarded by customers, exclusively for their server's benefit, per Labor Code Section 351.
In California, the prevailing minimum wage will differ depending on the county in which the Restaurant employer operates. Counties depart from the state mandated minimum wage in an attempt to best serve the local community's needs. For example, in July 2016, San Francisco County's required minimum wage was increased to $13.00. However, effective July 1, 2017, San Francisco County's required minimum wage will increase to $14.00.
2. Overtime must be paid at a premium
California law requires non-exempt employees who have worked longer than 8-hours in a single day be compensated at one and a half (1.5) times their normal hourly rate. If a non-exempt employee has worked past 12 hours, they must be paid at two (2) times their normal hourly rate. A non-exempt employee cannot waive or contract away their right to overtime compensation, regardless of any presumed agreement or "contract."
3. Employees working for joint Employers must be paid overtime, if earned
It is a common labor code violation when a Restaurant owner owns two or more restaurants and allows, or requires, an employee to work at both restaurants, resulting in a combined excess of 8-hours without paying a premium rate. A Restaurant owner may mistakenly believe that their two restaurants are separate, distinct companies, operating independently. This belief may result in a non-exempt employee working up to 16-hours in a single day without being provided proper overtime compensation. This scenario is a fact sensitive inquiry and depending on the facts, may be illegal.
4. Meal and rest breaks must be provided and given
Meal Breaks - The California Labor Code requires that an employer provide all non-exempt employees with a 30-minute off-the-clock meal break. This meal break shall be scheduled any time before the end of the non-exempt employee's fifth hour of work, if the workday is longer than 6 hours. An employer, at no point during an employee's 30-minute meal break, shall require or request the employee to engage in any conduct which is for the employer's benefit, such as bussing tables, completing "roll-ups," checking or sending emails, or assessing inventory levels. If, however, a non-exempt employee is to work less than 6 hours, the employee may waive, in writing, their right to receive a 30-minute meal break.
Rest Breaks - All non-exempt employees are entitled to receive a paid 10-minute break for every four (4) hours of work, or "major fraction there-of." The employer should try to provide this rest break as near the middle of the non-exempt employee's shift, as practicable. Courts have found that a "major fraction there-of" is considered 2 hours of work.
Failure to provide breaks - If an employer fails to provide a meal or rest break, the employer is penalized a maximum of one (1) hour of the employee's hourly rate, per violation. An employer shall only be penalized a maximum of two (2) hours per day, one-hour for meal break violations and one-hour for any rest break violations. This penalty shall be provided directly to the employee in their next scheduled pay check.
5. Employers are required to provide prompt payment of wages earned upon termination
The California Labor Code requires employers to promptly pay their terminated, either voluntarily or involuntarily, employee's final wages. The circumstances surrounding the employee's termination will dictate how the employer must provide those wages. Scenario one: If an employer terminates the employee, all wages become due immediately. Scenario two: If an employee gives more than 72-hour notice, the employer must provide the employee's final pay on their last scheduled workday. Scenario three: If an employee quits without notice, the employer has 72-hours to remit the employee's final pay.
*** While not required, if an employer has a policy providing for and authorizing the accrual of vacation pay, this time is considered earned wages and must be paid out in an employee's final pay.
6. Employers must establish a bi-weekly pay schedule and pay all wages due on those dates
Section 204 of Labor Code requires that employers designate two days of every calendar month as its regular paydays. On these scheduled dates, all regular and premium wages earned during that period must be paid.
7. Employers are required to provide Paid Sick Leave
All employees, i.e. full-time, part-time, and temporary, who have worked in California for 30 or more hours are entitled to Paid Sick Leave ("PSL"). Employers must provide an employee at least one hour of PSL for every 30-hours worked. To use PSL, the employee must notify the employer "as soon as practicable" of their intent to take PSL. While an employer may try to mislead the employee, but PSL can be taken to care for themselves or another person, such as a child, parent, spouse, grandparent, grandchild or sibling. Additionally, an employer is prohibited from retaliating against an employee who has either requested or taken PSL.
8. Employers cannot charge employees for register shortages, walk-outs, or uniform cleanings
An employer who requires its staff to wear uniforms, under Labor Code Section 2802, shall bear all costs associated with that uniform's maintenance. Uniform, under the Industrial Commission Wage Order No. 5, is defined as "apparel and accessories of distinctive design or color." While many restaurants have basic wardrobe requirements, such as black slacks, black shoes, black belt, etc., it is not responsible for these basic requirements. Yet, where an employer requires an employee to dress in special "apparel and accessories," it will be responsible for those items. Additionally, any losses incurred by walk-outs, register shortages, and loss or breakages of equipment shall not be deductible from an employee's pay because these occasions, to include uniform maintenance, are considered "the price of doing business."
9. Workers must be paid "reporting wages" in the event of a shift cancellation
When an employer has scheduled and the employee has reported, but the employee is not put to work for more than half of their scheduled shift, the employee is entitled to receive compensation for half their shift's wages. This remains true regardless of whether their shift was cancelled or they were let go early. The employer shall pay no less than two hours, but not more than four hours of an employee's shift. However, an employer may be relieved from this obligation where the Restaurant's daily operations cannot "commence or continue" due to interruptions that are beyond the Employer's control.
10. Employers and managers shall not take an employee's tips
The California Labor Code prevents employers and managers from taking or requesting tips that were paid exclusively to the servers. An employer is also prohibited from charging the employee a transaction fee when the tip was left on the customer's credit card transaction.
However, an employer may institute and monitor a tip pooling arrangement. The Labor Code does not prohibit an employer from pooling tips so that they may be shared between other service providing workers.
If these areas apply to you, or you think they may, contact an employment attorney
If you feel that any of "TEN Common Labor Code Violations Committed by Restaurant Employers" apply to you and your situation, do not hesitate to contact an employment attorney. Most employment attorneys who practice this area of law will offer a free or low-cost consultation.
All materials have been prepared for general information purposes only to permit you to learn more about Lansdown Law, its services and experience. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.
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