Legal Issues to Consider as Restaurant Employees Return to Work

    Employers may face difficulty with workers on unemployment insurance.

    Table of different restuaarant dishes.
    Unsplash/Go to Court Cook
    Other than health and safety, one of the biggest concerns for restaurants is a scenario in which employees refuse to come back to work because of enhanced unemployment benefits under the CARES Act.

    More than a dozen states have allowed restaurants to reopen dining rooms, meaning some furloughed employees are being asked to return to work.

    Liz Washko, an employment attorney and shareholder in Ogletree Deakins’ Nashville office, says clients have called with a variety of questions to ensure they are meeting legal guidelines as workers return.

    Washko says there are several matters to keep in mind. For health and safety, she says the CDC and OSHA provide the best federal guidance on cleanliness standards, even if they are modified frequently. It’s also important to pay attention to any state and local guidelines from health departments.

    AS RESTAURANTS REOPEN, THE CHALLENGE TO REHIRE EMPLOYEES BEGINS

    “One of my drum beats is for employers to document decisions they make,” Washko says. “That’s one thing to consider here. If you’re relying on a particular piece of guidance at a particular point in time, it might be worthwhile to print that guidance off with the date and document that this guidance is what you were relying on when you were making these decisions.”

    Other than health and safety, one of the biggest concerns for restaurants is a scenario in which employees refuse to come back to work because of enhanced unemployment benefits under the CARES Act. In some cases, employees are actually making more through unemployment insurance.

    Washko says she hasn’t had a client encounter this directly, but her firm is preparing employers for instances where someone doesn’t want to come back to work. The enhanced benefits run through July 31, but the attorney says there are expectations that those benefits will be extended.

    In response, employers should let those specific workers know that the job won’t remain open, Washko notes. It’s also important to consider that under most—if not all—state laws, employees have to actively search for jobs while on unemployment insurance. If an employer recalls a worker and that person refuses to return, Washko says it may undermine his or her unemployment benefits.

    However, given the pandemic, that situation would be difficult to monitor.

    “It’s going to be very difficult to enforce that just because of the resources,” Washko says. “They’re just struggling to keep up with the applications for benefits. I think there are a lot of folks that are waiting longer than they usually would have to even get their benefits. … I think states will to some degree, even if they had the resources, might be more lax than they usually would. But at some point, they’re going to pay more attention to it.”

    While dining rooms are reopening, strict capacity limits are in place. For example, in Texas, stores may only open 25 percent of their dining room. In Georgia, the rule is no more than 10 people per 500 square feet.

    Less capacity means lower sales. That could potentially trickle down into the wallets of employees who may have their wages reduced after returning.

    Washko says that for nonexempt employees, pay can be reduced as long as it doesn’t dip below the federal minimum wage, which is $7.25. For employees who receive tips, pay can’t go below $2.13 per hour. Some states have higher minimum wages.

    For exempt employees, Washko says employers should make prospective changes to their salary. She explains that these employees typically have to be paid the same salary each week, so you can’t make intermittent changes. An employer can reduce the pay as long as it doesn’t go below the federal minimum of $684 per week. 

    “One of the things to consider, especially with the exempt employees, is if you make a mistake, you could end up negating the exemption and have that person reclassify as nonexempt,” Washko says. “You just want to make sure you’re making a good business decision and that you are making that change prospectively for a period of time. You don’t want to be reducing their salary for these two weeks and then putting it back up for another two weeks and then reducing it for the next two weeks. That kind of fluctuation will not be looked upon favorably by the Department of Labor and will be looked at as a way to potentially avoid the salary requirements.”

    Washko also notes that if employers aren’t bringing back everyone at the same time, they may be exposed to the risk of someone claiming discrimination or retaliation.

    At the beginning of the process, she recommends looking at the decision objectively. Operators should first think about business-related issues before they think of the employees. More specifically, they should consider what positions need to be filled and what skill sets are needed to resume business under unprecedented conditions.

    Criteria should be applied consistently, Washko notes. Seniority is an easy example, although it may not be the best method in terms of skill sets. But it’s a choice that’s difficult to argue against.

    “Once you identify those criteria that are important to the decision, then you come up with a plan of how you’re going to align those with the employees that you have to bring back,” Washko says. “Again, trying to be as objective as possible, which is difficult. You have a lot of subjective understanding of your employees. But the more objective you can be, the more you’re able to support those decisions if you’re called upon to defend yourself.”

    Washko says employers want to bring back top performers and those who are going to contribute the most. However, her firm often finds that if an employee was or wasn’t brought back because of top performance, the decision contradicts a performance evaluation.

    “So if you’re an employer who uses performance evaluations, some restaurant employers do and a lot don’t, but it’s very difficult for you to say ‘Well we didn’t hire this person back because they’re a poor performer’ when all of their performance evaluations in their personnel file say they’re great,” Washko says.

    Regarding effective communication between employer and employees, Washko says it’s unique to the workforce. Having the right message can be challenging given that everyone isn’t in the same place, but Washko recommends operators utilize technology such as email and text message. And if possible, virtual meetings are a good way to present employees with up-to-date information.