While there are several labor laws for employees in any field, there are also specific labor laws and restaurant laws for employees in the food industry. In addition, there are often different restaurant labor laws by state depending on where your business operates or is headquartered.
Here we’ve created an in-depth guide to help restaurant owners and restaurant employees understand regulations established by the department of labor, the Fair Labor Standards Act, OSHA, and various state laws. As you can imagine, there is a wide range of information relevant to helping you understand restaurant labor laws and covering everything from hourly wage to overtime pay, tip credit, recordkeeping, health and safety, and much more. While not exhaustive, this resource page should provide you with a valuable resource on restaurant laws for employees, labor laws for servers, OSHA restaurant regulations, and much more.
Minimum Wage Laws in Restaurants
At present, the Federal minimum wage established for tipped employees (including food service roles such as waitstaff, etc.) is $2.13 per hour. However, if the combined amount of $2.13/hr. and an employee’s tips does not reach the minimum wage amount for all workers ($7.25/hr.), then the employer must make up the difference to ensure that each employee’s wage is equal to at least the full minimum wage.
Many states also have their own minimum wage standards which are higher than the current Federal amount, and which apply to restaurants and employees working in each of those states.
For example, in Florida the current minimum wage (as of Sep. 30, 2023) is $12.00/hour. As a result, the required cash wage for tipped employees is $8.98/hour. Florida employers are allowed to take a tip credit of $3.02 per hour which, when combined with the hourly cash amount, reaches the State’s minimum wage requirement.
Other states have different rates and standards established as well. In California, the minimum wage is $16.00 per hour. This is the legally required minimum and does not include any tips that the employee may receive.
Minnesota establishes two minimums based on the size of the business, where large employers (those with a gross annual revenue of at least $500,000) are required to pay $10.85 per hour, while small businesses (those generating less than $500,000 in annual revenue) have a minimum wage requirement of $8.85 per hour.
In any state where you operate a restaurant, the higher of the two numbers (state or Federal minimum wage) is the one that applies. And beyond this, there may also be specific city or county minimums that apply to your establishment.
For example, servers and bartenders in Florida are required to be paid the full minimum wage amount if and when they have to perform more than 30 continuous minutes of side work (setting tables, folding napkins before shift starts, rolling silverware, etc.).
For additional resources, the U.S. Department of Labor has established a Restaurant Employment Toolkit with numerous resources, fact sheets, and pages to provide valuable information about several questions you may have. There may also be different employee rights and restaurant labor laws by state, such as those in New York, Illinois, and so on.
Overtime Pay
One common question that comes up for new and existing restaurant operators is “how many hours is full time in a restaurant?” And here, too, there are federal and state standards that are established to define the workweek, restaurant overtime laws, and other labor laws for restaurant employees.
The most important thing to know is that restaurant overtime laws under federal employment law establish the same employee rights for restaurant workers as other non-exempt workers.
Under the FLSA, the Federal government considers a full-time workweek to be 40 hours, and requires workers to be paid an overtime amount of 1.5 times their regular rate of pay for any time worked beyond 40 hours in a given week (overtime). Many states adhere to this same structure and amount, requiring workers to be paid 1.5 times their hourly wage if they work more than 40 hours in a week. Ohio, Pennsylvania, Virginia, and Oregon are just a few examples.
Scheduling Laws
As far as scheduling, at present, there are no federal laws specific to the restaurant, hospitality, or food service industries.
However, some states, cities, and municipalities have begun to enact “predictive scheduling” laws or regulations in recent years. There are several different schedule formats commonly found in restaurants, and some make adhering to these laws easier.
In 2017, Oregon became the first state to pass local laws regarding scheduling. Since then, other cities have followed suit. Among labor laws for servers, waiters, and retail workers in Oregon, the following are some of the provisions in place:
- Provide employees with their schedules 14 days in advance
- Pay employees a penalty for shift changes that are made without sufficient notice
- Employees have the right to decline shifts that are not on the written and posted schedule
- Employees are allowed at least ten (10) hours between shifts when working back-to-back days
These are just a few highlights of the restaurant laws for employees in Oregon, and many other cities or counties have considered similar regulations in recent years.
Chicago, New York, Philadelphia, and others currently have some regulations in place regarding predictive scheduling, as well as other worker protections that vary depending on the size of the business.
Even those restaurants and employers in states that do not currently have scheduling laws or regulations have begun to consider these factors in their scheduling practices.
As you can imagine, these requirements can make the already difficult task of scheduling somewhat more challenging. Adhering to common best practices for scheduling can help make the process go more smoothly. There are also technological tools like auto-scheduling.
For those who are already used to developing a schedule manually, there are also tools and resources including this restaurant work schedule template which offers a head start and a quick way to see how these legal requirements may impact your business.
Tips and Tipped Employees
Labor laws for waitresses and other tipped employees under the “Tip Regulations Under the Fair Labor Standards Act (FLSA)” include:
- Employers cannot keep employees’ tips for any reason
- Employers that collect tips for a mandatory tip pool must distribute tips within the pay period
- Employers who pay the full minimum wage (take no tip credit) may allow non-tipped employees to participate in the tip pool
These are in addition to the wage regulations mentioned earlier, which include the minimum wage requirements for tipped employees, overtime pay, and so on. This includes the federal minimum hourly rate of $2.13 per hour for tipped employees.
The FLSA also lays out rules regarding tips made with credit cards. Specifically, where the credit card company charges a percentage of a transaction as a fee for processing the card, restaurant owners may deduct that same percentage from the tip amount (1.9%, for example).
Service charges that a restaurant might charge for large parties (“A 15% service charge for parties of 20 or more,” for example) are not considered tips under the FLSA. But these amounts can be used to satisfy minimum wage rate and overtime pay requirements and must be included in the regular rate of pay when calculating overtime amounts.
Individual states or cities may have specific laws regarding tipping, but most of them are related to the minimum wage requirements we discussed above. However, it can be helpful to seek legal advice if you have additional questions about specific tipping laws and policies in your state or county.
Breaks and Meal Periods
Under the FLSA, there is currently no law defining breaks, rest, or meal periods for employees. Instead, many states have defined their own break and meal period standards, generally based on number of hours worked and length of shift. A few examples of state statutes regarding breaks and meal periods for employees include:
- California: ½ hour if work takes place for more than 5 hours per day
- Connecticut: ½ hour at some point after the first 2 hours and prior to the last 2 hours of a shift for employees who work 7 ½ consecutive hours or more
- Illinois: At least 20 minutes of break no later than 5 hours after the start of the work period
- Maryland: 15-minute break for 4-6 consecutive hours or a 30-minute break for more than 6 consecutive hours
- Nebraska: ½ hour, off premises, for lunch in each 8-hour shift
These are just a few examples, but they show some of the variability in laws regarding break time and rest or meal periods for employees. The full list of states and their specific requirements is here.
Child Labor Laws
The Fair Labor Standards Act does establish several guidelines, regulations, and requirements in regards to youths and minors being employed at businesses.
Some of the most important child labor laws relevant to restaurants include:
- Minors 13 years of age or under are NOT allowed to be employed unless under an approved exception
- 16 and 17 year olds may be employed in any occupation that has NOT been declared dangerous by the Secretary of Labor.
- Employees under 18 years of age may not operate power-driven meat or poultry processing machinery
- Employees under 18 years of age may not operate motor vehicles on the job, with some exceptions for 17-year-olds
- 14- and 15-year-olds may be employed in restaurants, fast food establishments, and other quick service businesses outside of school hours, for limited periods of time, and under specified conditions
The U.S. Department of Labor’s Wage and Hour Division has even established a special page with resources on young workers’ rights, which you can review here.
There may be additional state requirements depending on where your business operates, so refer to the Department of Labor in your state for additional resources.
Health and Safety Standards
There are several health and safety standards established both by the Federal government and state governments, and all of them must be adhered to in order to maintain your business in good standing.
At the Federal level, OSHA establishes safety rules for fast food restaurants and all types of food service establishments, especially since restaurant work is considered potentially hazardous in many conditions. OSHA guidelines and regulations are put in place in order to help restaurants prevent debilitating injuries, illnesses, or deaths, and to protect both employees and customers. Some of the OSHA restaurant regulations include:
- Periodic examination or inspection of workplace conditions to ensure adherence to OSHA standards
- Ensure access to appropriate safety tools and equipment as required (including aprons, head coverings, gloves, tools for handling hot equipment or supplies, etc.)
- Personal protective equipment (PPE) and apparel to avoid slips, trips, falls, burns, or other possible hazards (such as floor mats and slip-resistant footwear, etc.)
- Proper hazard communication, including labeling of hazardous materials, safety data sheets, and employee training programs
- Fire safety equipment and proper maintenance (this includes access to fire extinguishers, commercial fire suppression systems for commercial kitchens, open access to fire exits and clearly visible signage, etc.)
- Electrical safety requirements for proper grounding, overload protection, shutoffs, and employee training
- Proper reporting of injuries and incidents
- Clearly posted and visible notices
You can view some of the most commonly cited OSHA standards here on the Osha.gov website, and review the training requirements in OSHA standards in this resource document.
Non-Discrimination Laws
Restaurant employees, like employees in most industries, are also protected by a number of non-discrimination laws, many of which are enforced by the U.S. Equal Employment Opportunity Commission (EEOC).
Several pieces of legislation apply to restaurant employees, including:
- Title VII of the Civil Rights Act of 1964 - bars discrimination based on race, color, religion, national origin, or sex
- The Equal Pay Act of 1963 - ensuring equal pay among men and women if they perform the same work
- Title I of the Americans with Disabilities Act (1990) - makes it illegal to discriminate against a qualified applicant or employee because of disability
- Pregnancy Discrimination Act of 1978 - prohibits discrimination due to pregnancy, childbirth, or medical conditions related to childbirth
- The Age Discrimination in Employment Act (1967) - Protects individuals aged 40 and over against discrimination based on their age
- The Genetic Information Nondiscrimination Act of 2008 - Prevents individuals from being discriminated against based on genetic information which may disclose disease information, disorders, or conditions in a family’s medical history
There are other federal statutes, including the Immigration and Nationality Act, which also apply to restaurant and food service establishments. These are important to be aware of because they are also enforced, as in the case of a Florida Restaurant which was determined to have violated the INA.
The EEOC has created a page that centralizes many resources including specific discrimination legislation, legal requirements, and more. And in addition to these statutes, several states have laws to prevent discrimination against employees for these and other factors.
Leave Laws
The Family and Medical Leave Act (FMLA) provides 12 weeks of job-protected leave to many employees, which can be used in the event of a pregnancy or childbirth, caring for a spouse or family member with a serious condition, military family leave, and so on. The requirements to quality for FMLA, however, mean that many restaurant industry employees are not covered.
Eligibility requirements for FMLA coverage include:
- Working at an employer’s site with at least 50 employees within 75 miles
- Have worked at the company for 12 or more months
- Have worked 1,250 hours in the last 12 months
Given that many restaurants are small, privately owned businesses, they may not employ a total of 50 people, and are unlikely to have multiple locations within 75 miles (franchises and chains being an exception). Additionally, given the variability of demand and scheduling for restaurant employees, many employees (especially part time) may not qualify based on the hours described above.
However, many states have also enacted leave requirements and laws. For example, Arizona requires that employees be allowed to earn paid sick time (at least one hour for every 30 hours worked).
Arkansas requires that leave be provided for voting, jury duty, organ donation, public service, and bone marrow or organ donation.
Colorado requires a number of different types of leave be made available to employees, including family and medical leave that is similar to the FMLA but with additional provisions.
Connecticut requires that employers with at least one (1) employee must provide unpaid family and medical leave to their employees, which is much more widely applicable than the 50+ employee requirement in the FMLA.
Posting Requirements
The regulations for restaurants discussed here, and several other state and federal employment regulations, are required to be posted in plain view for all employees to see. Fortunately there are a number of labor law posters for restaurants available from the U.S. Department of Labor’s website for workplace posters, as well as from state agencies and certain industry organizations as well.
Common Federal posters available at the link above that you should post in your restaurant include:
- Federal Minimum Wage poster
- Family and Medical Leave Act poster
- Job Safety and Health poster
- Know Your Rights: Workplace Discrimination is Illegal poster
At the main link above there are also posters available in several different languages as needed. The Department of Labor has also created a page on workplace posters which can help you understand which specific statutes and regulations require the posting of notices.
Finally, there is also the FirstStep Poster Advisor which can guide you through the poster requirements for your specific business or industry.
Recordkeeping
Under the FLSA, employers must keep certain records for non-exempt workers, including identifying information about the employee, their hours worked, and their wages earned. These are important for a number of reasons, including to avoid fines and to provide an accurate record of employment and compliance with state and Federal regulations. These employment records must include information such as:
- Employee's full name and social security number
- Address, including zip code
- Birth date, if younger than 19
- Sex and occupation
- Time and day of week when an employee's work week begins
- Hours worked each day
- Total hours worked each work week
- Basis on which employee's wages are paid (e.g., "$9 per hour," "$440 a week," "piecework")
- Regular hourly pay rate
- Total daily or weekly straight-time earnings
- Total overtime earnings for the workweek
- All additions to or deductions from the employee's wages
- Total wages paid each pay period
- Date of payment and the pay period covered by the payment
Payroll records such as these are required to be maintained and kept for at least three years. These records are also in addition to the records required by the IRS, such as purchases, sales, etc. For example, the FDA also has recordkeeping requirements for retail food establishments, and OSHA has rules regarding injury and illness recordkeeping.
Immigration Compliance
As mentioned above, the Immigration and Nationality Act applies to all employers, including restaurants and fast food establishments. Additionally, the Immigration Reform and Control Act and the Immigration Act of 1990 added further provisions that employers need to be aware of.
Compliance begins with properly maintaining employee information, including Form I-9, the Employment Eligibility Verification. The government has also created an E-Verify site with a tremendous amount of resources and information about I-9 requirements, tools for employers and employees, and an online portal to upload and e-verify required documentation.
There is also an Employment Law Guide available to provide additional information about work authorization for Non-U.S. Citizens.
State-Specific Laws
In addition to the Federal standards and requirements, many states have established their own labor laws and compliance requirements to protect both employers and employees. A few of the key states and examples of their different requirements are provided here, but be sure to explore more in-depth information about your specific state(s) requirements for your business.
California
- California minimum wage - $16/hour ($20/hour for fast food workers)
- Employees cannot waive their right to overtime pay
- Credit card processing fees on tips CANNOT be charged to the employee
- Employees must receive owed wages within 7 or 10 days of the last pay period (depending on existing pay schedule)
- Employees are entitled to a 30-minute unpaid meal break after every 5 hours worked
New York City
- New York City minimum wage - $10.65 with $5.35 tip credit, $16/hour for non-tipped workers
- Only front-of-house employees may participate in tip pooling
- On-call hours count toward an employee’s pay
- Employees CANNOT be charged for breakages, cash shortages, etc.
- Employees must be given a 30-minute break if they work six or more hours and are scheduled to work at noon
- New York paid family leave offers up to 12 weeks of leave time to new parents
Illinois
- Minimum wage is currently $14/hour (increasing to $15/hour in 2025)
- Tipped employee minimum wage is $8.40 (increasing to $9 in 2025)
- Illinois labor law requires that each employee has at least 24 hours of rest in each calendar week
- Employers CANNOT deduct from an employee’s pay for uniforms, cash register shortages, or broken equipment
Georgia
- Minimum tipped wage is the same as the Federal amount ($2.13/hour)
- Tipped employees must be paid the Federal minimum wage ($7.25/hour) for any time workers spend on non-tip-generating activities or tasks
Ohio
- Minimum wage in Ohio is $10.45/hour
- Employers may take a tip credit equal to up to $5.20/hour for tipped workers
- Employees under the age of 18 must be provided with a 30-minute, uninterrupted break when working more than 5 consecutive hours
- Break time is not required for employees over 18 years of age
- Employees must be paid at least twice monthly
Nevada
- Minimum wage in Nevada is $8.75/hour for employers who provide health benefits, and $9.75/hour for employers who do not provide a qualifying health benefit
- Tipped employees CANNOT be paid a lower hourly amount than non-tipped employees
- A break of at least 30 minutes must be provided for employees working a continuous period of 8 hours
- Employees that work at least 3.5 hours are permitted at least one 10-minute rest period
- Businesses with more than 50 employees must provide paid leave hours (with a minimum per-hour accrual amount)
Pennsylvania
- Pennsylvania minimum wage is the same as the Federal level ($7.25/hour)
- Minimum wage for tipped workers in Pennsylvania is $2.83/hour
- Minors may not work more than three hours in a day or 18 hours in a school week
- Employers in Philadelphia with more than ten employees must provide one hour of sick leave for every 40 hours worked
- Employers must pay all earned monies to any employee who has quit, been laid off, or been fired by the next scheduled payday
Common Legal Issues in Restaurants
While there are a number of regulations that any restaurant owner or employer needs to be aware of, there are some common legal issues that occur in the restaurant industry. For instance, the Chipotle labor law violation case forced the chain to pay a six-figure settlement in 2023 as a result of violating Washington, D.C.’s child labor laws. These violations included requiring employees under the age of 18 to work more than 8 hours in a day, more than 48 hours in a week, and more than 6 consecutive days in a work week.
Other common issues that restaurateurs should be aware of and diligently avoid include:
- Overtime violations (failure to pay due overtime, failure to keep accurate records, etc.)
- Minimum wage violations (especially for tipped employees)
- Predictive scheduling violations (advance notice of schedules, clearly posted schedules, etc.)
- Wage equality and equal pay violations
- Non-discrimination violations
- Health and safety (OSHA) violations (food handling, sanitation, etc.)
- Permits and licensing being up to date
Ensuring Compliance: Best Practices for Restaurants
To ensure your restaurant’s compliance with the numerous laws and regulations impacting the restaurant industry, there are a few steps you can take and some practices that you should make part of your operation.
First and foremost, keep accurate records of everything. Just as you would with your inventory and costs, keeping accurate employment records, payroll records, and scheduling records is key to ensure that you are in compliance with any and all regulations.
Another tip is to employ scheduling software, especially one designed to handle auto-scheduling for restaurants. From avoiding overscheduling and labor law violations to ensuring you have coverage for the busy times of day, these solutions can offer multiple benefits and keep you in compliance with any and all scheduling-related regulations.
Lineup.ai has several tools to help restaurants with scheduling. Using artificial intelligence and machine learning, Lineup.ai takes important factors like historical sales, local weather, and events, and produces sales and labor forecasts. These forecasts are the basis for building schedules that meet demand without exceeding labor goals. Users can take their forecasts and build their own schedules or use the auto-scheduling feature to save hours each week.
Additionally, ensuring that your employees are in compliance with necessary rules is critical. This is best achieved by offering regular employee training, whether in person or virtually. You can also provide regular assessments and ensure that new hires are offered the same training and learning opportunities.
Conclusion
Understanding and complying with regulations in the restaurant industry can seem to be a daunting task, but thousands of restaurant owners and employees provide food and service for millions of people each day. So it is certainly possible to operate a successful business that meets the needs of a community while also meeting the requirements and expectations of local, state, and federal regulators. Taking each piece of the puzzle one at a time, and consulting with experts, is the best way forward.
While there is a wealth of information in this resource guide, there are many other questions and guides that we are not able to provide here. Be sure to follow the links provided here, and reach out to our team for additional information.
Frequently Asked Questions
Do Restaurants Pay Time and a Half On Holidays?
In the United States, there is no federal requirement for restaurants or any other businesses to pay employees time and a half for working on holidays. The Fair Labor Standards Act (FLSA), which governs wage and hour laws in the U.S., mandates overtime pay for hours worked over 40 in a workweek at a rate of no less than one and a half times the employee's regular rate of pay.
In the United States, there is no federal requirement for restaurants or any other businesses to pay employees time and a half for working on holidays. The Fair Labor Standards Act (FLSA), which governs wage and hour laws in the U.S., mandates overtime pay for hours worked over 40 in a workweek at a rate of no less than one and a half times the employee's regular rate of pay. However, it does not require any special pay for work performed on holidays, weekends, or regular days of rest, unless overtime is worked on such days.
That said, the decision to pay employees extra for working on holidays is often left to the discretion of the employer.
Is It Illegal To Make Servers Pay For Walkouts in Texas?
In Texas, as in the rest of the United States, it is considered illegal under federal law to require servers or other tipped employees to pay for walkouts, if doing so would reduce their earnings below the minimum wage. This is outlined by the Fair Labor Standards Act (FLSA), which sets the federal standards for wages and labor practices.
Can a Restaurant Make a Server Pay For a Walkout in Virginia?
According to the FLSA, employers are generally prohibited from making deductions from an employee's wages if such deductions would bring the employee's earnings below the federal minimum wage. This includes deductions for walkouts, broken merchandise, cash register shortages, and similar losses.
Important Notice: The information in this article is not legal advice nor does it guarantee legal accuracy. It is up to you to consider whether the information is appropriate to your needs. Legal and other matters referred to in this article are of a general nature only and are based on Lineup.ai's interpretation of laws existing at the time the article was written. This article should not be relied on in place of professional legal advice. Lineup.ai is not responsible for the content of any site owned by a third party that may be linked to this article, and no warranty is made by us concerning the suitability, accuracy, or timeliness of the content of any site that may be linked to this article. Lineup.ai disclaims all liability (except for any liability which by law cannot be excluded) for any error, inaccuracy, or omission from the information contained in this article and any loss or damage suffered by any person directly or indirectly through relying on this information.
