Overtime: Overtime must be paid at a rate of at least one and one-half times the employee's regular rate of pay for each hour worked in excess of 40 hours per week. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement. Employees must be informed of the provisions of FLSA section 3(m) in advance if the employer elects to use the tip credit. Tips: Tipped employees are those who customarily and regularly receive more than $30 a month in tips. However, the employer cannot take credit for discounts given employees on food (menu) prices. This typically is an hourly deduction from an employee's pay. Tips may be considered as part of wages, but the employer must pay not less than $2.13 an hour in direct wages and make sure that the amount of tips received is enough to meet the remainder of the minimum wage.įood Credit: The employer may take credit for food which is provided at cost. Deductions made for items other than board, lodging, or other recognized facilities normally cannot be made in an overtime workweek. Deductions made from wages for items such as cash shortages, required uniforms, or customer walk-outs are illegal if the deduction reduces the employee's wages below the minimum wage or cuts into overtime pay. Wages are due on the regular payday for the pay period covered. Minimum wage: Covered non-exempt workers are entitled to a federal minimum wage of not less than $7.25 per hour effective July 24, 2009. For example, a waitress or cashier who handles a credit card transaction would likely be subject to the Act. Also, any person who works on or otherwise handles goods that are moving in interstate commerce is individually subject to the minimum wage and overtime protection of the FLSA. Restaurants/fast food businesses with annual gross sales from one or more establishments that total at least $500,000 are subject to the FLSA. The restaurant/fast food industry includes establishments which are primarily engaged in selling and serving to purchasers prepared food and beverages for consumption on or off the premises. This fact sheet provides general information concerning the application of the FLSA to employees of restaurants and fast food establishments. Proposed revisions include increasing the standard salary level and the highly compensated employee total annual compensation threshold, as well as providing an automatic updating mechanism that would allow for the timely and efficient updating of all the thresholds to reflect current earnings data. The NPRM proposes to update and revise the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional employees. NOTICE: On August 30, 2023, the Department of Labor (Department) announced issuance of a Notice of Proposed Rulemaking (NPRM), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. Fact Sheet #2: Restaurants and Fast Food Establishments Under the Fair Labor Standards Act (FLSA) For the most up-to-date information on tips and tipped workers under the FLSA, please see Fact Sheet #15 and Fact Sheet #15A. This publication is under revision in light of rulemakings involving tips and tipped workers.
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