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Operating a Restaurant within the Law: A 101 in Compliance (Part 1)

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Operating a Restaurant within the Law: A 101 in Compliance (Part 1)

By Caron_Beesley, Contributor
Published: April 21, 2009 Updated: December 5, 2011

From a customer perspective, it’s easy to imagine how extensive the laws and regulations are for governing restaurant operations - and you would hope so, since you are trusting this establishment with your nourishment and, subsequently, your health.

Now just imagine what life is like behind the scenes!

For busy restaurant owners, the legal and regulatory requirements associated with running their business is a big part of their daily lives.

From labor laws to food safety laws and new regulations such as no smoking laws, understanding and achieving compliance with legal and regulatory requirements can have a big effect on the success of a restaurant operation.

If you are in the process of opening a restaurant, or are already in the business and need to stay abreast of dynamic changes to the law, below you’ll find part one of a two-part overview of the federal regulations that impact restaurateurs and links to where you’ll find more guidance.

Minimum Wage, Tips, and Overtime

Full-time and part-time restaurant employees are entitled to certain wage standards. These requirements, regulated by the Fair Labor Standards Act (FLSA,) cover minimum wage, tips, food credits, and overtime:

  • Minimum Wage - Currently the federal minimum wage for non-exempt workers according to the Department of Labor (DoL) is $7.25 per hour. 
  • Food Credit - As an employer, you can take credit for food provided at cost. This is typically in the form of an hourly deduction from an employee’s pay. If you just want to give your employees a discount on menu prices, you can’t deduct this as a credit from their wages.
  • Tips - If your employees receive more than $30 a month in tips, then they are considered by the Dol as a  'tipped employee'. Some employers can take a credit for a certain amount of tips earned by their employees and apply it to the payment of the minimum wage. The laws on this vary by state. If you do this, you must tell your employee in advance, and you must be able to provide evidence that your employees are receiving the applicable minimum wage (at least) when wages and tips are combined.
  • Overtime - If you require your employees to work any time over a 40 hour work week, you must pay overtime at a rate of at least one and one-half times the employee’s hourly rate.

This is just a glimpse at restaurant wage-standards law. To find out more, visit SBA.gov here.

The second part of this two-part overview of the laws and regulations that impact restaurateurs business will focus on the laws that pertain to youth labor, immigration, food safety and taxes.

 

About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

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I have friends in the restaurant business and these are great considerations. I would also consider the other aspects to setting up and purchasing a restaurant. Some restaurant equipment just dies out after a while like any other piece of equipment. Frank Washington ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
I have friends in the restaurant business and these are great considerations. I would also consider the other aspects to setting up and purchasing a restaurant. Some restaurant equipment just dies out after a while like any other piece of equipment. Frank Washington ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
This is a good start for any restaurant owner. Mike GDaytona--------------------------------------Daytona Beachside Restaurant for Sale - http://daytona-restaurants-for-sale.info
Wow, excellent guide for starting a resteraunt. Makes following regulations easy and bearable. I'm forwarding this to a friend who owns a small restaurant. Omer A.MMORPG Game List , RPG Music and Game Wallpaper Site OwnerVG Alliance LLC (New Jersey)Message Edited by NicoleD on 09-30-2009 11:28 AM
Hi DavidP - This was a two parter, part 1 and part 2. Is that what you are referring to when you say it has already been written? Thanks. Caron
article on this topic has already been written,anyway, thanks for the useful resource_________________Custom essay writingMessage Edited by NicoleD on 09-30-2009 11:28 AM

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