Top 10 Employment Law Violations Every Food and Beverage Employer or Employee Should Know

Posted on December 18, 2011 | 44 comments

Top 10 Employment Law Violations Every Food and Beverage Employer or Employee Should Know

The restaurant, bar and food service industry continues to be one of the most highly abused industries when it comes to complying with California Employment law.  Restaurant employees are often cheated out of their hard-earned wages, and employers are constantly subjected to costly wage-and-hour litigation which undermines the successes of the business. Whether you are an employer or employee, you should familiarize yourself with the rules of the game.  The following is a list of top ten California labor laws that food and beverage employers frequently violate: 

1.  Employers must pay at least a minimum wage rate.

The minimum wage rate in California is $8 per hour. Paying anything less is a violation of California minimum wage law. This is true even if an employee personally agrees to a lesser hourly rate. In addition, an employer may not use tips earned by an employee (e.g. waiter, bartender, busser, or food runner) as a credit to satisfy the minimum wage requirement.

Each county has its own minimum wage rate; therefore, California employers must refer to their county’s minimum wage ordinance to determine an applicable rate. For example, San Francisco County has the highest minimum wage rate in the nation, which is now $9.92 and will become $10.34 as of January 2012.

Damages for violating California minimum wage law are considerable and include unpaid minimum wage with interest, statutory penalties, cost of litigation, and attorney fees.

2.   Employees must be paid for all hours worked.

California Labor Code requires employers to compensate workers for all hours worked. Specifically, employers must pay for all job duties that constitute an “integral and indispensable part of the principle activities” for which employees are employed.  These principle activities include training, attending pre-shift meetings or workshops, preparing a work station, doing side-work, and checking-out.  Some restaurant managers require their staff to clock-out before taking a 10-minut rest period. Such practice is illegal under California labor law.

3.  Overtime work must be paid at a premium rate.

In California, every non-exempt employee who works beyond normal hours is entitled to overtime. Waiters, bussers, food-runners, hostesses, and cooks are non-exempt employees and as such they are entitled to get paid one and one half times of a regular pay for all overtime hours.  (To learn more about California overtime law, read the following article).

Oftentimes restaurant owners misclassify their floor and kitchen workers as managers or assistant managers, which allows them to bypass California overtime laws. To classify a worker as a manager, an employer must demonstrate that worker’s job responsibilities and duties meet all of the requirements of executive exemption.

4.  Restaurant owners and managers are not allowed to take tips.

Section 351 of the California Labor Code prohibits employers and their agents from taking tips from employees serving customers. All tips left by customers belong exclusively to an employee who earned them. Restaurant owners, managers, supervisors or their assistants are not allowed to collect or receive tips. However, California labor law does not prohibit employers from having a tip polling policy that requires employees to share tips with other workers who provide services to customers.

Furhermore, employers who allow tips to be paid by credit card may not deduct from the tips any fees or cost associated with the credit card transaction.  All credit card tips must be paid not later than the next payday after the date the customer authorized the credit card payment.

A wait staff should keep in mind that California courts distinguish between tips and service charge. While a tip is property of an employee, service charge belongs to an employer. This distinction is crucial, because it allows employer to do with service charges whatever he or she wishes and employer is not required by law to distribute service charge to the company’s wait staff. The rationale behind it is that tips are voluntarily left by the customer, but service charge is a mandatory fee that customers have to pay to the house.

5.  Employees are not responsible for customer walk-outs, register shortage, order mistakes and other business related losses.

Industrial Commission Wage Order No. 5 Section 8 prohibits an employer from making any deduction from the wage or requiring any reimbursement from an employee for any cash shortage, breakage, or loss of equipment. Cash shortage, loss or breakage of equipment, customer walkouts, waiter’s mistakes are considered to be business expenses that cannot be passed onto the employee. The only time when employers are permitted to make such deductions is when it can be shown that the shortage, breakage, or loss is caused by a dishonest or willful act, or by the gross negligence of the employee. In other words, if a cashier makes an honest mistake while handling a cash register, he or she is not responsible for shortage. However, if the register is short because the employee did not follow his employer’s instructions and refused to use a calculator, such act or omission would be equivalent to the gross negligence and the employee may be held liable for shortage.  Most importantly, mere allegations that an employee steals money from the register are not sufficient; employer needs to present clear evidence of dishonest conducts or gross negligence.

6.  Employer must pay for uniform and its maintenance.

If employers require their workers to wear uniforms as a condition of employment, employers must pay for and maintain such uniforms. Industrial Commission Wage Order No. 5 defines the term “uniform” as any “apparel and accessories of distinctive design or color.” However, employers are not required to pay for  “basic wardrobe items which are usual and generally usable in the occupation.” For example, if an employer requires all wait-staff to wear jeans and pastel color shirts of no specific design, it would be responsibility of an employee to purchase and maintain those clothing items. However, if an employer requires workers to wear  the same jeans and pastel color shirts, but with the company’s logo, then the  employer would have to pay for them.

7.  Employer must provide meals and rest periods.

Meal Periods. All non-exempt employees are entitled to at least a 30-minut meal break for every five hours worked.  Such breaks must be scheduled at any time before the end of the fifth hour of work. If during this 30-minute meal period, an employee is relived from all work duties and is allowed to  leave work premises, then  the meal time itself does not count as part of the hours worked and is not compensable (“off-duty”). However, If an employee  is not permitted to leave the workplace during the meal period due to a nature of work, the meal time counts as part of hours worked  (e.g. overtime) and is compensable (“on-duty”).  In addition if employee’s work shift is six hours or less,  the employee may voluntarily agree to waive his or her right to a 30- minute meal break. Due to the nature of hispitality industry, most of the employees (e.g. servers, bartenders, bussers, and food runners) are not permitted to leave their workplace  during the meal break. In such cases, the employer may not require its workers to clock out before taking the meal breack and,  must pay their time.

Rest Periods. For every four hours of work, all non-exempt employees are entitled to at least a 10-minut rest break.  Employer must make sure that rest breaks are provided in the middle of a 4-hour work period, if practicable. Unlike meal periods, rest periods are  counted as time worked and therefore, the employer must pay for such periods. Since employees are paid for their rest periods, they can be required to remain on the employer’s premises during such periods.

If an employer fails to provide meal or rest periods, such employer must pay the employee one additional hour of pay at the employee’s regular rate of pay for each work day that the meal or rest period was not provided.

8.   Employers must preserve all employment records.

Under the federal law, the following records must be maintained for at least three years from the last date of entry: payroll records, including each employee’s name, address, occupation, hours worked each day and week, wages paid and date of payment, amounts earned as straight-time pay and overtime, and deductions, etc. In addition, employers are required to keep the following records for at least two years: time and earnings cards; wage rate tables; work schedules; order, shipping and billing records; and records of additions to or deductions from wages.

Any employee, including former employees, may request  copies of his or her payroll records. An employer has  21 days to provide the records, or permit the inspection.  If an employer fails to comply, he is subject to  a $750 fine, and the employee may sue to obtain the information and recover costs and fees.

9.  Employer must disclose certain information on each pay stub.

Employers are required to include the following information on the pay stub when wages are paid:

·         Employer’s  name and address;
·         employee’s name and last four digits of social security number;
·         inclusive dates for which the employee is being paid;
·         gross wages earned;
·         the applicable hourly rate and total hours worked for hourly employees;
·         all deductions; and
·         net wages earned. (statement listing regular and overtime hours)

10.  Employer must pay wages twice each calendar month.

With a few exceptions, California Labor Code Section 204  requires that all non-exempt employees  must be paid twice each calendar month. Specifically, wages earned between the 1st and 15th of the month must be paid between the 16th and 26th; and wages earned between the 16th and the end of the month must be paid between the 1st and 10th of the following month.

San Francisco Paid Sick Leave

San Francisco County requires employers to pay for employee’s sick leave. Specifically, under the San Francisco Paid Sick Leave Ordinance 12W, qualified employees (i.e. those who worked for the company 90 days and more) are entitled to one hour of paid sick leave for each 30 hours worked. Depending on the size of employer, certain hour caps may apply. For example, if the company employs less than 10 workers, the maximum number of paid sick leave hours an employee can earn is 40 hours. Employers with more than 10 employees are subject to a 72-hour cap.

Legal Assistance

The foregoing list of labor law violations is not exhaustive and there are many other wage-and-hour requirements that each employer must follow. The legal consequences of Labor Code violations are severe and cost of defending a labor suit is costly. Whether you are an employer or employee, you must familiarize yourself with the above rules. If you are an employee and your wage-and-hour rights have been violated, you may be entitled to recover damages, including back pay, overtime, statutory penalties, and cost of the suit. However, if you are an employer and you are not sure whether your business practice is in full compliance with California Labor Code, feel free to contact the author of this article, who is a San Francisco employment law attorney, for a free consultation.

Print Friendly


  1. Thanks for this great article!

    • my boss makes us work 11hr shifts and reprumands us if we sit for more than 5minutes and we never get a 30minute break im tired of this but i need this job i dont know what to do

      • Start looking for a different job, Hector; then when you get one, go to the Labor Commission and file a claim. You could get LOTS of money back, and it is very easy to file a claim (the Labor Commissioner will provide you with an interpreter if you need it, and will help you with any questions you have about the claim).

      • This is how to report a labor violation;hope this helps I know it’s pretty late of a reply. Good luck.

      • Find a wage and hour lawyer in your area. You don’t pay up front and the employer will likely have to change its policies.

  2. I work 140 hrs every 2 weeks it’s that over time cuz I ask my boss I get pay over time and she pretend like nothing happen it’s been like that for mor that 1 year I know I work more that 40 to 45 hrs over time
    I star @in the line prepping 9:00 – 4:00 take a break for 1 hr and come back @ 5:15 – 11:00 p.m 5 days a week it’s that count like over time

    • i only get paid 65 hours every two weeks and i really work like 97 every two week i complain to the manager and he says is better for me and he gets mad but hey what to do he gets mad

  3. Buffalo Wild Wing has fired employees when they refuse to pay for a customer walk out

  4. My daughter was fired by a restaurant after she did her side work, infront of people. On the spot. We also have to pay for walk outs. We also get a little over 2$ anhour.. We have to pay for our meals. We didnt save the checks we paid for when she had a walk out. The boss also grabbed her arm. Is there anything we can do?

    • Almost everything you described is unlawful. A minimum wage rate in California is $8. You are likely entitled to liquidated damages for minimum wage violations. I strongly recommend that you consult with an experienced employment law attorney.

    • Debbie, “if you reside in San Francisco, California”, you can also go to organizations, like Young Workers United or the Progressive Workers Alliance, who will be happy to help you with no fees to get your daughter’s money back.

    • quit that crappy job.

  5. “Restaurant owners, managers, supervisors or their assistants are not allowed to collect or receive tips.” What if the owner, manager, or supervisor is the one who provides the service? In some Mom and Pop restaurants, the owners actually wait tables.

    • I am looking for the same answer to that question, in a ma and pa operation what makes someone management when they are not making salary?

  6. The country club my daughter is a server for now has her painting walls. Is that legal?

  7. Nobody should go into the restaurant industry. It is set up for the owners to lose.

    Instead, get a 4 year degree in English or History (Anything Liberal Arts).

    Make a 3.8 GPA.

    Go to Law School for 3 Years and act like you are smarter than the lord. Get a license to squeal and steal.

  8. At this job we do cashier(take food orders)
    Make the food orders

    Basically multitask. When we are left alone we have to do it all by ourselves and of course it can get overwhelming because we, as a pizza restaurant, should have items ready to go.

  9. oh and I forgot. we are a restaurant owned by a larger company. We are at times, left alone to worl.for more than 3hours.

    • My boss is a jerk. whenever he feels like to blame you for something he takes shifts away as punishment. We worked every shift about 6 to 8 hrs and never get breaks . If he caught you talking or socializing he yells at you saying is this what I paid you for? He is very arrogant I was just wondering can I do something?

      • Titiana, I am sorry to hear about your problems at work. It looks like your employer is violating Labor Code section 512 and applicable Wage Order which require all employers in CA to provide meal and rest breaks to each employee. If you have any further questions, feel free to call us. Sincerely, Alexei

  10. can employer classify a server as a contract employee to not paythem an hourly wage? we basically work for our tips only. and are required to do side work clean and even prepare meals with no compensation please help

    • If you work in CA, then this practice is illegal. With the exception of a few highly isolated instances, each employee is entitled to at least minimum wage. The tips cannot be credited by the employer to satisfy the requirements of minimum wage laws. Clearly, your employer owes you compensation.

  11. The employer I worked for never paid us over 50 hours a week, when I would work over 70 hours some weeks. They never deducted anything we tipped out. We tipped 6% of our sales and got taxed on the 6% that we tipped out. We were not allowed to report our wages at the end of the night, being told we had to claim $0.00. Ex: Our bus boys would have almost no income at the end of the year on their W2 (their only income was from servers and bartenders) while receiving money back and all the servers would owe upwards of 2,000-3,000 in taxes because they were paying their taxes essentially.

  12. My restaurant scheduled servers ” on call ” shifts which means the server has to call the restaurant at 3:00 that day to see if they need an extra server that night depending how busy it is .
    If a server does not call in for an ” on call” shift can the manager fire the server?
    Should the manager be paying the server to be “on call” even if they don’t end up needing the server that night?
    Is an ” on call” shift technically a shift that’s supposed to be paid for?
    The server has to wait all day and cannot make plans and has to be available in case the restaurant needs them. Shouldn’t the server me paid for that like an hourly minimum wage?
    Thanks for your help

  13. I know this is about the state of California but is it the same laws in Missouri? More specifically the law about bar owners not being able to take tips does that apply in the state of Missouri? I’d greatly appreciate to hear your answer thank you so much.

  14. It says that managers are not allowed to take the tips that were earned by other employees, but what if the manager is actually taking tables in their own section, like picking up extra shifts as a server, not a manager, even though she is on salary. Is this still a violation?

  15. If a customer leaves her phone on the table, and the server drops something on it, who is liable for the damage? Can the server be made to pay for repair or a new phone, if the restaurant refuses? Or is it the customer’s fault for leaving it out on the table?

    Just happened to a friend of mine (a server), and I don’t think he should have to pay for an honest mistake, which should have been foreseeable to the customer in a busy bar/restaurant.

  16. How is it ok to be hired as a dining room server in restaurant who used their restaurant staff to do room serviced because they refuse to hire seperate staff for that service?
    And if this is ok that they do this should I expect to be paid more?

  17. What about foodserver rights in Las Vegas,Nv?

  18. My manager asks me to take my break after 6 hours work without being paid, even if I am still on duty. Also, our managers get tips from servers. What can I do?

    • Meal breaks generally need to be provided without the first five hours of work and they must be uninterrupted and off-duty. It sounds like your managers are not in compliance with California Labor code sections 512 and 226.7. You definitely need to bring this into attention of your management and ask them to correct their policies. If the company refuses to make changes, you can always contact the Labor Commissioner in your area or a private attorney. If you are located in the Bay Area, you can contact our office to discuss your problem further.

  19. I am server at an ihop restaurant, I was terminated for not paying for two dine n dash customers that did not pay for their food during our busiest time of the night.
    In addition to the restaurant being understaffed there wasn’t enough food prepared for a busy night

  20. My daughter in-law is a waitress and her boss (owner) prohibits all employees from clocking in until customers show up. They are required to do all set ups off the clock, including cleaning up after a shift has ended.

    Recently he told her that she owed him 3 hours of work off the clock for paperwork he had to complete on her behalf for Medi-Cal. Since he does not offer insurance Medi-Cal was trying to verify her employment period.

    From what she has told me all of his employees have being doing this for years .. they are afraid of retaliation & getting fired if they complain.

  21. I’m a server and we can’t take brakes due to short in staff but the time clock automatically deducts 30min just resentful that we have found out that the time clock does this… The bookkeeper resently has added the 30 min back but has not added into the right spot preventing us to get paid overtime.what can I do about this, I’ve worked there over 10 years?

  22. Who can we take our problems to? To help us? As I am in a tough situation with work, and I need something to be done?

  23. I work for a restaurant that does catering on the side. as caterers we are paid an hourly wage, but on the bill that each business we cater to receives, it has a ‘gratuity’ bill, however that gratuity goes to the owner of the restaurant. is this legal?

  24. I work split shifts what this restaurant calls doubles. My employers deduct 30 of time on the clock on one of those two shots and deem it unpaid! Is this legal cuz I’m basically paying to wor!? $ plz hel

  25. My question is in relation to the new sick time regulations in CA. As a waiter, is this sick time payable at the minimum wage level or is it payable at the actual level of income in the way disability or unemployment is calculated?

  26. My wife is a waitress at a internationally known 50’s diner. She is recognized as the best server in the diner along side with one other co-worker. She never misses a day of work unless she is unable to perform due to sickness or other means. (In this case her car broke down on freeway) She called in to tell her manager that her car is down and that she couldn’t make it to work (40 miles away) cause she had to get it towed and to a mechanic in order to fix it. Well her manager was really upset that this happened to her. So when my wife went to work the next day and viewed her work schedule for the next 2 weeks, my wife’s hours were cut drastically and her days off were the days she makes the most money in tips which is Friday’s, Saturday’s and Sundays. No servers or hostesses get the weekends off ever. So as a punishment for calling out her hours were cut and work days were scheduled on the days that business is the slowest and on top of that her manager put her to work in the section of the diner where almost nobody is seated. The same thing happened again as my wife was sick and called out. She had sick time for both instances and was treated like carp for it. As compared to the other employees which always call out/ always late and are never punished for their irresponsibility. We are now in jeopardy of losing our apartment and her car is on the verge of repossession. Is this kind of action illegal for her manager take out on my wife or any employees for this matter?

  27. I have been working at this restraint for over 10 years and last year my boss asked me to do him a favor and work the night shift until he could find someone to do it.Which basically means I got a pay cut. Since then he has hired two people to work but has put them on days.I Keep Asking Him When. I will be put back on days and he says he is trying .Both of the new hires are Spanish speaking men. I would like to believe tha the this has nothing to do with my situation but I think it might because all the other servers except for one are Spanish speaking

  28. If my employer charges a guest a fee of $150 for “chef attendant” for a carving station and I am sent to work that station for 2 hrs. am I entitled to any of the $150 as part of my wage for the time I was in the room? Or, should I be included in the “service pool” for all the Banquet servers that worked the event and were part of the tip?

  29. I’m looking for an answer to my question if a manager hires family members and is effecting other employees what should the employees do

  30. The restaurant I work at will have us work shifts more than 6 hours, and then go into the computer system and edit are hours so that it appears we worked 3 hours, took a 30 minute break (which we didn’t), and clock us on for another 3 hours. I have evidence that I’ve worked the 6 hours straight through.
    I hear you when you say, “discuss this with management”, but we all know that this will surely lead to consequences.
    What compensation can be expected at a minimum for taking action? I’m not doing anything until I’m in a position to leave this job, because I’ll surely be “let go” if I try to bring this up.

Leave a Comment

Your email address will not be published. Required fields are marked *

(415) 693-9107