Chicago’s City Council passed the “One Fair Wage” Ordinance on October 6, 2023, which will gradually phase out the City’s “tip credit” regulations over a five-year period until they are eliminated completely by June 30, 2028. What does this mean for restaurant owners? Chicago employers will be required to increase employee minimum wages by a fixed percentage over the next five years and will not be able to offset wages by tips earned.
What is the potential impact on consumers? That remains to be seen, but impacts may include restaurants and bars passing along blanket service charges or increasing food and beverage prices. It may also result in layoffs or closures as owners struggle with increased labor costs.
Employees may see a widening of the pay gap between front end and back of the house workers as all workers will receive the same minimum wage, but tipped workers may still receive gratuities. For more information, visit here.
The US Department of Labor Enters a Consent Judgment Requiring Newport, R.I. Restaurants to Pay $554,000 in Back Pay and Liquidated Damages
The DOL (Department of Labor) issued a press release announcing the consent judgment reached with the owners of several Newport area restaurants, including Stoneacre Brassier, Stoneacre Gardens, Stoneacre Tapas and individual owners Christopher Bender and David Crowell. The federal lawsuit alleged that owners violated the Fair Labor Standards Act by: (i) improperly included managers and owners in tip pools and failed to pay the front-of-house employees participating in tip pools the minimum wage; (ii) failed to pay employees the correct overtime rate; and (iii) did not maintain adequate records of working hours for employees. The judgment included a back pay award of $283,061, a liquidated damages award of $270,519 and $11,419 in civil money damages. As a reminder, individual owners can be personally liable for wage violations even though the restaurant may be owned by a corporate entity.
Mandatory Workplace Protection Prevention Act Required in California: A First-of-its Mandate That will Impact Nearly Every Industry Open to the Public California employers may wish to start preparing to implement Workplace Violence Prevention Plans (WVPP) and to train employees on workplace violence. California passed SB (Senate Bill) 553, which was signed by the Govenor and becomes effective on July 1, 2024. The new law will be administered by CAL/OSHA and has extensive requirements. It requires employers to train employees on workplace violence hazards, to maintain records of violent incidents, and to conduct periodic reviews of the effectiveness of the WVPP. It applies to all employers in California unless they are already covered by California’s Workplace Violence in Healthcare standard, or have employees that telework from a location that is not under the employer’s control, or whose workplace is not open to the public and the employer has 10 employees or less, or the workplace facility is operated by the California Department of Corrections or law enforcement agencies. For detailed information on the new law and its requirements, visit here.