Question:

I own a franchise restaurant, and my workers are non-union. I spend most of my time trying to keep my customers and employees happy. I have 6 managers who I rely on a lot to deal with the employees. I have heard rumors about “raids” of restaurants by some agency that enforces labor laws, and I am concerned about that. What can I do to protect my business?

Answer:

The agency you are referring to may be the Economic and Employment Enforcement Coalition (EEEC). The EEEC is a part of California’s Department of Industrial Relations. The EEEC is a multi-agency enforcement program consisting of investigators from the Division of Labor Standards Enforcement, Division of Occupational Safety and Health, Employment Development Department, Contractor’s State License Board, and US Department of Labor. The primary emphasis of the EEEC is to combine the enforcement efforts of the agencies and put as many investigators into the field as possible. One of its stated goals is to “conduct vigorous and targeted enforcement against labor law violators.”

There have been reports that the EEEC has focused its investigations on employers in the agriculture, car wash, construction, auto body repair, real estate, courier/messenger services, garment manufacturing and restaurant industries. Recent restaurant enforcement actions in Los Angeles and Woodland identified numerous violations, including failing to carry workers’ compensation insurance, provide itemized pay stubs, and provide meal and break periods. According to the EEEC, these investigations are not the result of random inspections, but stem from reports or complaints to the coalition’s agencies.

One step you can take to protect your business is to do an internal audit of your company’s employment practices to be certain you are complying with California law. Some of the areas to review include:

  • Classification of workers as exempt or non-exempt from overtime regulations. An employee’s title, or the fact that an employee is paid a salary, are not determinative is properly classifying the employee as exempt or non-exempt. The job must meet a duties test and a salary test in order to be properly classified as exempt. The exemptions are described in the California Wage Orders, at www.dir.ca.gov/iwc/WageOrderIndustries.htm. Wage Order 5 covers most restaurants.
  • Proper payment of overtime. In California, overtime obligations begin when an employee works more than eight hours in a day or forty hours in a week.
  • Records of wages and hours worked. Employers are required by law to keep time records showing the beginning and end of an employee’s shift, and the beginning and end of the employee’s meal period.
  • Pay stub rules. At the time wages are paid, you must provide each employee with written statement with the following information: gross wages earned, total hours worked (except salaried exempt employees), all deductions, net wages earned, the inclusive dates of the pay period, the name of the employee and his/her Social Security number (by January 1, 2008, all employers will be required to print no more than the last four digits of an employee’s Social Security number on check stubs, or to substitute some other identifying number), the legal name and address of the employer, the hourly rate in effect during the pay period and the number of hours worked at each hourly rate by the employee, and piece rate units and rate, if applicable.
  • Compliance with meal and rest periods. California law requires employers to provide non-exempt workers with a 10 minute rest period for every four hours worked. If a non-exempt employee works a five hour shift or longer, the employee must take a minimum thirty minute unpaid meal period during which the employee is relieved of all duty. The penalty for failure to comply is payment of one hours’ wage to the employee for each meal period that is missed or interrupted, plus one hours’ wage for any day the rest period is not provided.

This is a partial list of areas to review to protect your business. Review your employment policies, and make sure your managers are trained to consistently apply and enforce your restaurant’s policies.

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