Executive Summary: For a foodie, there’s no
greater place to be than in New York. Owning or managing a New York restaurant,
however, has never been so complicated. With ever-changing state wage-and-hour
regulations specifically geared toward the restaurant industry, a simple
employee misunderstanding or a minor employer omission can lead to costly
litigation. One way to limit liability, or to avoid it altogether, is to create
an employee handbook. Below are five reasons why every New York restaurant
should have one.
1. Creating a Handbook Allows for
a General Check on Compliance with Current New York Wage and Hour Laws. For established restaurants,
creating an employee handbook is a great opportunity to ensure that your
current time record and pay practices comply with New York law. For instance,
owners may wish to review the accuracy and reliability of their time-keeping
systems, including an assessment of whether such systems comply with New York’s
call-in minimum wage rule for workers who are sent home early during a slow
shift. Creating a handbook also enables restaurant operators to reinforce an
employee’s agreed-upon rate of pay and reaffirm whether that rate is subject to
a tip credit, in addition to the various wage and tip notices New York law
already currently requires. Owners of certain fast food establishments, in
particular, need to be sure they are complying with the recently enacted minimum wage rates, which are set to rise on
December 31, 2016 to $12 and $10.75 for qualifying fast food establishments in
New York City and New York state, respectively.
2. A Handbook Can Help Limit
Potential Damages in a Wage-and-Hour Suit. New York’s onerous tip credit
requirements have long been a boon for the plaintiffs’ bar, especially with
respect to tipped restaurant employees who may spend a portion of their shift
performing non-tipped work. Under New York law, if a front-of-the-house worker
spends a certain portion of his or her shift performing non-tipped work, the
restaurant-employer is not entitled to take the tip credit for that employee on
that day. This issue becomes problematic in the litigation context because
there are often no records to support what tipped or non-tipped work was
performed in a particular day by any one employee. An employee handbook might
alleviate some of a restaurant’s exposure in this instance by requiring tipped
employees to self-report in the event that they perform excessive non-tipped
work during a shift.
3. A Handbook Can Provide Clarity
on Uniform Maintenance Pay and Tools of the Trade Reimbursements. Beyond the minimum wage and
overtime obligations under New York law, there are other costs that a
restaurant-employer might be responsible for, including uniform maintenance and
any tools required for work. With certain exceptions, New York law mandates
that restaurant-employers pay and/or provide for the maintenance and cleaning
of any uniform required to be worn on the job. For an employer who wishes to
provide laundry service to its employees in lieu of providing payment, the
employer must give written notice of such service to its employees. An employee
handbook is a great opportunity to set forth a clear and comprehensive policy
regarding whether a uniform is required and what laundry service is available
for employees. A handbook can also provide guidance with respect to a
restaurant’s reimbursement policy for tools or equipment required on the job.
4. A Handbook is Often a
Prerequisite to Obtaining an EPLI Policy. Employer Practices Liability
Insurance (“EPLI”) is becoming increasingly more common as a way to help
employers limit their exposure for claims brought by their employees. Often, a
prerequisite to obtaining an EPLI policy is having an employee handbook.
5. A Handbook Helps An Employer
and Employee Foster a More Transparent Relationship. At the end of the day, it is
in the employer’s best interest if an employee who feels that he or she may
have been improperly paid brings the issue to the employer’s attention, rather
than an attorney. To this end, an employee handbook that sets forth a precise
procedure for the submission and review of employee wage complaints could be
extremely helpful in resolving matters quickly and on an individual basis. An
employee handbook should also provide reassurances that any employee making a
wage complaint will be not be subject to any retaliation and provide steps for
an employee to report any resulting retaliation.
Bottom Line: An employee handbook is a
useful tool for restaurant-employers to clearly communicate their pay and
timekeeping practices and to provide employees who have wage-and-hour
complaints with an alternative to litigation. By creating a transparent process
for employees, employers have a greater chance of resolving any pay
discrepancies without the expense and uncertainty of litigation.
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