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October 18, 2022

Everybody has their own snapshot of what “normal” is supposed to look like. For me it is the parking lot to access at my local LIRR train station. Or it might be the restaurant at which I met clients for dinner last Saturday evening did not have a single table open. The combination of those two makes it safe to assume that things we saw as pre-pandemic life are slowly creeping back to some kind of normal. 

People are busy again and the hum of the industry’s wheels is gaining momentum as an increasing number of workers return to their offices. This reality also means that litigation affecting the restaurant and hospitality industry is increasing.

It’s no secret that the pandemic has led to a serious labor shortage in the foodservice industry, and the workers the industry has managed to secure or retain are now arguably better informed than ever about their rights. A fact reinforced by the judicial system. Consequently, our company, Meister Seelig & Fein LLP is seeing an increase in payroll filings, both inside and outside the restaurant industry, from weekly pay issues to issues with inappropriate tips and overtime failure. We are faced with the whole gamble of wage and hour claims. Plus, there is definitely an option where people are taking advantage of the courts again.

This means that restaurateurs have to make sure that all their ducks are neatly lined up. There are several practices that should just become second nature. Those non-negotiable matters always include issuing wage rate and payday notices. Your pay stubs must be in accordance with the state. Employees must be paid weekly. Time must be tracked accordingly to properly allocate overtime pay and ensure that you apply the tip credit correctly and only take the tip credit for those employees who qualify.

In several ways, I see where the pandemic has created a new level of confusion. With the growth of the past two years in Takeout & Delivery operators must ensure that tipped employees are not busy packing and preparing takeout orders. Only the employee without a tip is allowed to handle all the preparations for the delivery, in addition to the side work in the restaurant. Take steps to prevent your tipped employees from potentially exceeding the threshold for doing too much non-tipped work by adhering to the 80-20-30 rule instead of just the 80-20. It certainly helps relieve the pressure associated with the restrictions on your tipped employees doing unpaid work.

In case the “30” has confused you, what that means is that there’s now the 30-hour continuous restriction that you now have to struggle with. Where previously the 80-20 rule provided that tipped employees could do no more than 20 percent of their work without tipping, federal law now prohibits employees from doing untipled work for more than 30 continuous minutes.

The easiest way to avoid these pitfalls is to make sure your payroll company has experience with the hospitality professional. Plus, you really want your attorneys to check and make sure everything is verifiable, because we’ve seen countless cases where payroll-generated paychecks comply with New York’s general laws, but don’t follow the intricacies of the law.

catering industry.

From a legal standpoint, we are also seeing an increase in discrimination cases related to both sexual harassment and racial prejudice. We also see cases stalling at government agencies that were flooded during COVID. These cases that have not been dealt with in the past two years are being picked up and re-arrested. We currently have a case that has gone on for three years and nothing has been done and suddenly they have filed a hearing on it.

So, for those operators dealing with discrimination lawsuits, make sure you have a sexual harassment prevention policy that complies with national regulations. Annual sexual harassment training should be part of your operational agenda. There should be clear communication about reporting discrimination claims. If you haven’t already purchased employment practices liability insurance, do the research to see if it’s something that would make a difference to your team and your facility. We are aware that the pandemic has sidelined some inherent practices. But, of course, restaurants are personal and this training is paramount to the success of your operation.

There are two more remnants of the pandemic that I believe will continue to be part of our existence in the future. The first is the proliferation of takeout and delivery services that we have highlighted and the second is the future of outdoor dining.

Once an oasis of solace for the pandemic tired diner, these buildings have now evolved into a thorn in the side of vermin slums in some cases. Be proactive to ensure you are aware of the ever-changing rules regarding these outdoor dining options. Make sure that you have the proper permits and that you maintain these structures so that they do not fall into disrepair. Local residents are already expressing their disgust and some have even filed complaints against their continued target. It will look bad if you don’t maintain your exterior structure and it has fallen into disrepair. Customers will use them as a benchmark to measure the cleanliness of your establishment and assume that hygiene in your restaurant is also compromised.

So as we take a different turn and get closer to what I like to call the End-emic, I’d also like to see the industry get a little more leeway from policymakers. That they will continue to operate restaurants within reasonable limits with as few restrictions as possible. The industry will of course do its part by maintaining health and safety. But we also want our operators to be able to focus on the day-to-day aspects of their business, rather than being limited by fear of punitive action and bureaucracy.

In recent years, many restrictions and laws have been imposed on our operators. For many of you, the over-regulation has been so restrictive that you’ve become more concerned about making sure you’re following the laws. To this I say, get organized. Be compliant. Then focus on creating the best possible product that will ensure a great guest experience.