Common Legal Issues for Restaurant Owners

November 13, 2021

Owning a business is difficult enough as it is, but running a restaurant comes with unique risks. Every business owner understands that there are laws and regulations which they must follow, however, there are some more common legal issues for restaurant owners specifically. At Wright & Gray, work closely with our clients that own restaurants to understand their needs and fight to protect their legal rights. Call us at 504-688-7330 or visit our website to schedule your free consultation, and ensure your legal and financial rights remain protected. 

Employment Issues

Your people make your business operate smoothly. A restaurant without cooks, servers, and hosts would be doomed to fail. As a business owner, you are responsible for ensuring that your employees are treated fairly and that your employment practices comply with federal, state, and local law. The failure to comply with these laws often become common legal issues for restaurant owners. 

Overtime

The Fair Labor Standards Act (FLSA) is a federal law that requires employers to pay certain types of employees overtime for any hours exceeding 40 hours per week. Under the FLSA, “non-exempt” employees are entitled to time-and-a-half for any hours worked over 40 hours. Non-exempt employees include anyone in a non-professional role, like executive or administrative functions. Many members of a restaurant staff will be considered non-exempt, so be sure to comply with all overtime requirements.

Minimum Wage Compliance

Currently, the federal minimum wage is $7.25 per hour. This happens to be Louisiana’s minimum wage as well. The confusion over minimum wage in the restaurant industry comes from the “tipped employee” provisions of the FLSA. When an employee earns over $30 of tips per week, the employer is only required to pay $2.13 per hour in direct wages. If an employee falls short of minimum wage after tips are included, however, the employer must make up the difference. Restaurant managers must be careful to ensure that their tipped employees are not falling short of minimum wage.

Discrimination and Harassment

Discrimination and harassment can be serious legal risks for restaurant owners. Restaurant staff work in close quarters, and while there is often a collegial relationship between employees, there is a heightened risk that a staff member will make a comment or action that crosses the line. Even if you as the owner did not partake in the discriminatory or offensive behavior, the restaurant can be on the hook in the event of a lawsuit. One step restaurant owners can take to protect their business is to make sure all of the staff members are trained on anti-discrimination and anti-harassment policies, and ensure there is a procedure for staff members to report any complaints. If you are unsure if your policies and procedures follow these laws, consider visiting with an experienced attorney at Wright & Gray today. 

Health and Safety

The Occupational Health and Safety Act (OSHA) sets forth countless workplace regulations for the protection of workers. Especially during the COVID-19 pandemic, restaurants also have to be careful to ensure the health and safety of their employees. By adhering to OSHA guidelines for their staff, complying with health and sanitation codes, and exercising reasonable caution, restaurant owners can minimize some of those legal risks that come with the fast-paced, sometimes messy restaurant environment. In addition to general food and fire safety basics, OSHA also has issued guidance about keeping employees safe during COVID-19. Though some of this guidance is intuitive, it should be taken to heart. For instance,

  • Workers who feel ill should stay home
  • Regularly disinfect surfaces
  • Maintain physical distancing in the restaurant
  • Require workers to wear face coverings at work

Failing to keep the restaurant safe for workers and customers alike can open the business up to mountains of liability. 

Licensing

Commercial properties must comply with regulations at many levels of government, from local zoning rules to liquor licenses. These licenses might also include business permits, safety permits, or health department certifications. One of the most common legal issues for restaurant owners is that they do not know all of the licensing and regulations they need to comply with. As a small business owner, you might not be preoccupied with legal issues from day to day, but if you do not keep up your mandatory licensing, you could find yourself with fines, penalties, or suspensions that can hurt your business in the long term. 

Leases

If you are a restaurant owner, chances are you do not own the building you operate out of. Even if you have rented residential properties for years, commercial leases are a different beast entirely. These are high-value contracts with many terms and conditions, all of which your business needs to comply with to avoid breaching the contract. Failure t adhere to your commercial lease can lead to serious penalties, or even eviction. Whether you are opening a new restaurant, renewing a lease, or moving locations, it may be beneficial to speak with an experienced attorney to ensure you are complying with all of the terms of your lease. Further, know that you have bargaining power in negotiating the lease - if something is not consistent with how you want to operate your business, this location might not be right for you.

Immigration

A large portion of the restaurant industry is comprised of non-U.S. citizens. This means, as the employer, the restaurant may be responsible for confirming that their employees are eligible to work in the U.S., or in some cases, sponsoring work visas. The world of immigration law can be complex, so if you as a restaurant are employing any non-U.S. citizens or permanent residents, consider consulting with an attorney to determine if any additional steps are needed.

Trust Our New Orleans Attorneys

Wright & Gray is one of the most trusted personal injury firms in the New Orleans area, and we strive to give each of our clients the attention and care they deserve. An experienced attorney can talk you through some of these common legal issues for restaurant owners.  If you would like to set up a consultation with one of our trusted lawyers, reach us at 504-688-7330. We look forward to working with you.


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