Dine & Dish | Restaurant Employment Law: Legal Mistakes That Could Cost You Thousands | Doug Plass

Stephen: V Vs real quick and then I'll be right back in like five minutes. Just gonna check on them. So MIchele N DiMeo: Okay. But it should start to record.

I shouldn't have an issue, right? Stephen: I just hit record, you guys are good, so MIchele N DiMeo: Okay. And Doug, I'm just gonna start all over again like we never even met. Take two.

Doug Plass: Sounds good. Let's reset. Stephen: All right, cool. All right, good to go.

MIchele N DiMeo: All right. Well, welcome back for another episode of Dine and Dish. And boy, it seems like the last couple shows we've had a lot of technical challenges. ⁓ you can definitely tell that my aura is shutting down technology.

⁓ for anybody that knows me knows that ⁓ anything I'm around kind of shuts down. So we've had those issues in London with Jimmy, now today with Doug. So with further ado, we're gonna get started before I shut down another platform, but My guest today is super cool, very timely in terms of what we're going to talk about since summer is coming to an end and everybody's going to ramp up in hiring. ⁓ so we're gonna talk employment law, hiring mistakes, and how to survive hiring for the holidays.

So welcome, Doug. I can see you and hopefully I can hear you. Doug Plass: ⁓ good. Hopefully we straightened everything out.

Good to be here. MIchele N DiMeo: ⁓ I know. Well, I'm glad to see you and you're not frozen, so that's a good start. So welcome to Dine and Dish.

And ⁓ before we get started talking about your expertise and what we're gonna talk about today, why don't you introduce yourself? ⁓ I'm gonna hand over the mic to you so you can talk a little bit about who you are, what you do, and then we'll jump right into the show. Doug Plass: Okay, sounds good. ⁓ so I am an employment lawyer here in Boise, Idaho.

⁓ I've not always been an employment lawyer. Actually, I've only d been doing this for about four years or so. ⁓ I spent ⁓ a couple of decades in the restaurant industry. I was first a, you know, started off as a line cook, as people do, and then I ⁓ got into catering, did a a few years of ⁓ of catering with a with a partner of mine, and then ⁓ Eventually went back to school and got my degree and then I stayed in the restaurant industry.

⁓ opened a few restaurants for a couple of other people and then ⁓ had my own baby. I started a a little restaurant up in the mountains in Stanley, Idaho, and kind of ran it ⁓ well, parts of the year all by myself actually. But then ⁓ you know, in the summer we would bring on staff and ⁓ changed the menu every day, had a really great time doing it. And then eventually I got to the point where I realized that ⁓ all this all these long hours in the kitchen were a lot for me.

And then things like my hands started to break down and and it seemed like time to make ⁓ a change. And I thought about, you know, do I really want to like kind of go into more of the management ⁓ side of the restaurant and get out of the kitchen, or do I want to do something else? And the law had always interested me. So I ⁓ made the bold decision to go to law school at the age of fifty.

⁓ don't know if I recommend that for a lot of folks, but that's what I did. And ⁓ and just by happenchance got involved in an internship in an employment law firm and found that I really liked it and actually had ⁓ kind of a lot of good experience to bear ⁓ from all my years working in restaurants. So that's where I am today. MIchele N DiMeo: So very cool story.

⁓ we kind of have a similar background because f ⁓ I actually started off in the law area and accounting, ⁓ married into the business. ⁓ my husband is the restaurateur, so I kind of took a buyout with my firm when I was working in the accounting industry. started working with him almost 20 years ago. And I keep saying every day, I'm gonna go back and finish my law degree.

So you're inspiring me even more. So I I know you say don't do it over fifty. I mean I'm kinda in the fifties, but ⁓ but it's something I've been wanting to do for a really long time. So it's interesting to hear your story ⁓ because you might motivate me to finally do it.

Doug Plass: Well, It's it it's pretty different. I mean, I really enjoyed law school. I always have enjoyed school, but ⁓ and it it's really interesting to be kind of confronted with people at a little different time in their lives. ⁓ so you know, I I'm here I am fifty seven years old and I have, you know, friends having babies and ⁓ you know, people getting married and all this kind of the stuff that happens to younger folks and I get a experience it now again.

So it's kind of fun. MIchele N DiMeo: Yeah. Did you actually ⁓ attend school or did you do it mostly online or did you do some remote and I guess I'm now picking your brain for a personal reason. Doug Plass: ⁓ well, you know, while I was in law school, COVID happened.

So ⁓ so I was in person here in Boise. ⁓ and luckily, you know, our class had a chance to gel together in person. And then we went online for a while. ⁓ by the time I finished up, we were kind of b back in person mostly, but ⁓ it was kind of a weird time.

⁓ MIchele N DiMeo: Gotcha. Yeah. Doug Plass: But yeah, I mean I really do enjoy being in person. You know, we do have to do a lot of things virtually these days, but you know, nothing beats the one on one human connection.

MIchele N DiMeo: Yeah. Well, and you know, even from a learning perspective, I mean, there's so much more that you can do in groups and in person than because even ⁓ my daughter did ⁓ her masters in accounting online re fully remotely from ⁓ actually where I graduated, Michigan State. And you know, walking in her graduation, she was finally meeting people that she went to school with for you know for two, three years and never met them face to face because everything was always video.

⁓ so what a different world in terms of education. I mean, that's crazy. But that's a whole nother show. So let's jump into what we want to talk about today.

and you know, I love your background because you know it's super cool that you've had the ability to work in restaurants so you understand the unique model of how you staff, how you hire from the front of the house to the back of the house. And I want to jump in and really talk about that because Doug Plass: Yeah. Sure. MIchele N DiMeo: Restaurants, you know, whether you're an independent restaurateur or you're a franchiseur, ⁓ there's risks that you face on both sides of the coin, right?

So whether it's hiring for large scale or hiring for independent, smaller level, ⁓ there's definitely challenges on both sides. And I'd love for you to talk a little bit about hiring challenges that you see, because I'm sure you work with a lot of restaurateurs ⁓ being in this space, ⁓ and what pitfalls or legal challenges that they might have if they're not smart about hiring. So why don't we jump right into that and then we can kind of talk through ⁓ what what suggestions you have.

Doug Plass: Yeah, I mean, well, there's a I in terms of hiring, there's really a lot of things to think about, you know. ⁓ you know, a lot of restaurants hire youths. ⁓ there's s significant challenges with doing that, and I think we'll get into that later. ⁓ you know, and one thing that restaurants have that other businesses don't is ⁓ they have tips, right?

So that that creates a whole level of complication two things. MIchele N DiMeo: Yeah. Mm-hmm. Yeah.

Doug Plass: and you know it's a high pressure environment with fluctuating schedules, ⁓ you know, kind of ⁓ you know, low wages typically, and it kind of creates this this crucible where claims can develop. and I think that ⁓ you know, restaurant owners need to be mindful of that and really have their house in order to begin with before they even start bringing people in. MIchele N DiMeo: Mm-hmm. Doug Plass: You know, getting their systems and processes in place so that they can make good hires, so that they can ⁓ have everything they need to be successful.

So, you know, and f as far as like the hiring process goes, you know, have job descriptions, know what the rules are that you want to hire for, and have that clear in your mind when you're going through that process. and also be aware of kind of pitfalls in hiring like ⁓ you know pro protected class status. You know, you should never could be conducting interviews asking people, you know, about their medical conditions or their family history or really anything that could later come back ⁓ and show that you were discriminating in some way.

MIchele N DiMeo: Yeah. Well, being HR correct is, I mean, that's a given. ⁓ I mean, that that's a whole nother level of knowing what to ask, what not to ask during an interview, obviously, and and having operation manuals in place. ⁓ but there's so much more that goes into it because, like you said, a lot of restaurants do hire younger where they're under 18.

I mean, you know, here in Maryland, we try to ⁓ hire over 18 just because of liquor license laws. Because I mean, obviously there's a huge challenge that If you hire somebody under 18, they can't open liquor, they can't serve liquor. So you're definitely very challenged on what they can actually do in the restaurant. So I mean, there's different laws for full service versus different laws for fast casual, obviously.

So let's talk since you mentioned tips. ⁓ that's a big hot topic. it's funny, I'm gonna digress for just a second. I do this every show.

You know, when you go to Europe, tipping is so different than the United States. And we actually just had this conversation on another show. That in Europe, tips are kind of built into the menu. You know, when you're there, it's like people typically don't tip, or they'll leave $5 here, $5 Euro here.

Nobody really expects large tips. You come into the United States and it's like, you know, Europeans travel in to visit, and their tipping mentality is very different than American mentality in terms of tipping. So, you know, you have this challenge of tipping in general, of what The standard should be. Is it 10%?

Is it 15%? Is it 20%? Good service 25%. But now there's so much that goes into tip pooling, tip credits.

So why don't you talk through? I mean, this is a hot topic in itself and probably a whole show, but why don't you, I guess, first explain what tip credits are, talk about what tip pooling is and how that has changed in the industry from you know, state to state, 'cause I know New York it's hot. Other countries it's not, right? So ⁓ why don't we start there?

Doug Plass: Sure. Yeah, so so Yeah, it is. There's a lot there. But here so basically the way it works.

So tips are interesting because you know you're right. In the US tips are, you know, part of the business model, right? So they're things that everybody has to take into account when you're running a restaurant. So because I think this is caused by the fact that ⁓ that you know a lot of MIchele N DiMeo: That was a load of question, wasn't it?

Doug Plass: A high percentage of ⁓ money coming into the restaurant is going to the servers. This this idea of a tip credit was instituted, right? So this is a way to pay a server less than minimum wage and take part of the tips they receive as credit toward that minimum wage and toward any overtime requirements that they might have as well. So overtime on that minimum wage.

MIchele N DiMeo: Mm-hmm. Doug Plass: ⁓ a lot of restaurants do this, ⁓ but when you do it, ⁓ there are certain other rules that come into effect, ⁓ especially having to do with tip pooling. So tip pooling is generally okay among those employees that typically receive tips. So servers and busers and bartenders.

MIchele N DiMeo: Our tenders, yep. Doug Plass: Right, can all kind of t pool their tips and get distributed out from that. ⁓ we'll talk about managers a little bit too. Managers can't ever be part of a tip pool, a bar part of the receiving end of a tip pool.

Managers can contribute to a tip pool. MIchele N DiMeo: Is it because their salary, or is it just because of the status or the title? Because I mean, that's a big question that's come up with many fast casual, not to cut you off, but a lot of fast casual third key, which are technically managers, but they're third key and they're hourly. I've seen other concepts where they're actually going into this whole tip pool or they're tipped out because they're technically part of the front of the house.

Now I know from a full service standpoint, that's obviously not the same, but from a fast casual, how does that break break down? Doug Plass: So if someone is a manager, or if someone is, you know, ⁓ an executive in some way, a manager, ⁓ they are not able to receive anything from a tip pool. And that has to do with the fact, ⁓ I I think the the idea behind it is that those people have the ability to influence their subordinate employees and maybe coerce them in some way, right?

So that You know, we want to separate them from that tip pooling arrangement completely. ⁓ and and in fact, whenever a manager is receiving from a tip pool, what the US Department of Labor says is that that taints the tip pool entirely. And any of the money that has gone in ⁓ should really be returned to the the the the servers who pooled their tips. So managers, ⁓ it's it's it's a bad practice to have them in the tip pool ever.

⁓ other employees can be in a tip pool, but it but to get back to the original question, once you take the tip credit, you cannot impose a mandatory tip pooling arrangement that compensates those employees that don't customarily receive tips. So the back of the house, right? So in a traditional tip pooling arrangement, the back of the house isn't included. But in ⁓ kind of the more modern arrangement where you want to include the back of the house, you you can't impose that as a as a restaurant owner or manager to your employees for whom you were taking a tip credit for.

⁓ and this is something I see people get in trouble with all the time. ⁓ so you know that's kind of how it works. So ⁓ if you you know Th there is some informal tip pooling arrangements that are not mandated by by the restaurant, and those are fine. If a server just wants to tip out the back of the house of their own volition, they are always free to do so.

⁓ it's once the once the employer itself gets involved and says you have to do that, that that's what causes the MIchele N DiMeo: Mm-hmm. Yeah. So what's the best way to document tips? ⁓ and this has also been brought up many times and I've I've had this question because, you know, is it better to do it on a spreadsheet?

⁓ you break it down in terms of hourly and then the tips are separated that way, you know, because you have to remember that we have a mix of both ⁓ we'll talk my restaurant group for a second, a mix of both full service and fast casual. Fast casual is different because you know, the tips go in, then they're calculated out by hourly and they're paid out. That's one thing. Full service, obviously, bartenders pull the tips together in the bar.

There's AM bar, PM bar, and then they split their tips and they figure that out. And servers are individual. So you have different business models going on within one restaurant, right? Because the servers are individual tip entities.

And then the bar's a AM, PM bar entity. So what's the best way to document this to make sure that you are compliant? ⁓ and then you don't lead yourself into some type of lawsuit. So let's talk prevention versus lawsuit, you know?

Doug Plass: Sure. Sure. So well, you know, so you've got described kind of some folks that pool their tips and some folks that don't, right? So when you know, if if if folks are not pooling their tips, then you're just assigning those tips to that to that ⁓ particular employee ⁓ you know, on that shift, right?

Or or, you know, I guess whenever, you know, the batches run or whatever. ⁓ yeah. And then MIchele N DiMeo: Mm-hmm. Exactly, right.

At the end of their shift or the end of day, whichever. Doug Plass: Yeah, and then you know, ⁓ cash tips are a different thing that you know, employees are are required by law to report them. ⁓ so they should you should have some mechanism for them to report them to you. ⁓ that doesn't have to be every day.

MIchele N DiMeo: And that's a trick that's a tricky one not to cut you off because not every server, you know, declares a hundred percent of their tips. I mean, you know, as a full service restaurateur, you know, obviously you tell them, you know, declare your tips at the end when you're doing your payroll reporting. And obviously credit cards we know because credit cards tips are easy. They come out of a report, we know what we're paying them and we know what we can declare.

But cash tips, at the end of the day, you don't always know what they're getting and what they're putting in their pocket. So you have to Doug Plass: Yeah. MIchele N DiMeo: You know, it's it's almost like that honor system where you have to make sure that they truly are reporting their tips correctly, right? Doug Plass: You do.

And you know, for for the very small restaurants, this doesn't apply, but for restaurants with with I think at least I might be wrong, but I think it might be 10 regular full time employees. ⁓ then if the if there isn't eight percent of sales reported as tips, ⁓ then the restaurant's gonna have to make up the difference. So ⁓ so it's really ⁓ in the best interest of the restaurant to make sure that. MIchele N DiMeo: Ten.

Mm-hmm. Doug Plass: your servers understand that they need to report, you know, at least some. I mean, they're obligated to report them all, but you know, it's kind of out of your hands. ⁓ so, you know, make sure that they're doing it, I guess, is is kind of how that goes.

And then as far as documenting the, you know, the pool tips, ⁓ I, you know, the best it it really depends on how you're dividing things out, right? So some MIchele N DiMeo: Yeah. Doug Plass: Some restaurants have a lunch service and a dinner service, for instance, right? So you wouldn't necessarily in that case want to pool all the tips for the same day and then divide it by hours worked in that case.

In that case, you would have two different shifts, right? And you would have, you know, hours worked, hours worked on the lunch shift, ⁓ by all employees or are all, you know, service employees, ⁓ and then ⁓ MIchele N DiMeo: Right. Yeah. Doug Plass: ⁓ you know, tips received and then divide them out that way, you know, and a spreadsheet.

A lot of the POS systems, I think, can do this now, ⁓ to some degree. ⁓ they're getting they're pretty sophisticated nowadays. ⁓ and then as far as like tipping out your back of the house staff, that usually doesn't happen on the same cadence, right? You know, you may be MIchele N DiMeo: Yes.

Doug Plass: allocating tips to your servers on a daily basis, but not necessarily to the back of the house staff on that basis. It might be a a question of, you know, some percentage is taken away from them. And then at each pay period that is allocated to the to the different positions in the back of the house. MIchele N DiMeo: Yeah.

So if so if the back of the house is on salary and they're not hourly and tips are being paid out in a pooling type atmosphere, does the back of the house get included in that as well? Because that's also another question that goes back and forth. Should the back of the house be truly tipped out as well? Like what's the law say as in front of the house versus back of the house?

Doug Plass: Well the law does not require the back of the house to be tipped out ever, right? So that's just a business decision that the individual restaurant has to has to make. ⁓ whether someone's salary salaried or not, ⁓ doesn't really matter in terms of that. ⁓ it you know what matters a bit has to do with the ⁓ exemptions, right?

So in order to and maybe we're jumping into that topic now, but MIchele N DiMeo: Gotcha. Yep. We are. Great great segue.

Doug Plass: In order to ⁓ so you know, some positions are some employees are exempt from overtime, ⁓ from minimum wage and or overtime requirements. and in order to be exempt from those requirements, you generally have to have two things that happen. One is you are paid on a salary basis, meaning you receive MIchele N DiMeo: Mm-hmm. Doug Plass: a guaranteed amount of salary per week ⁓ or per month or per per year however however it's decided ⁓ a guaranteed amount that's the first part and it has to be ⁓ greater than six hundred and eighty four dollars per week that's the current ⁓ the current limit there was ⁓ a push to raise that a couple of years ago but that got stayed in litig litigation and and it's kind of dead for now that's the first part MIchele N DiMeo: So Doug, really quickly, when you say $684, I mean ⁓ obviously that's a salary number.

It doesn't get broken down into an hourly number. But how does that work from a state perspective? So for example, if they work 50 hours, is it still 684? Because what I was under the impression, and that's in terms of Maryland law, that they have to make at least a minimum wage times however many hours they work.

And then that's how the salary would is supposed to be figured out in terms of back of the house. So when you say 684 in terms of exemption, how does that work with the hourly rate mandates and minimums? Doug Plass: So I'm talk I'm talking about federal law. So this is the Fair Fair Labor Standards Act.

So state laws have their kind of their own layer on top of this. But just in terms of federal law, ⁓ being paid on a salary salary basis for purposes of an exemption from the Fair Labor Standards Act means that you are paid a certain amount per week, kind of no matter what. But you know. MIchele N DiMeo: Gotcha.

Nuances? Yeah. Doug Plass: There are you can do deductions from that for full days missed for certain reasons, but but you're kind of guaranteed a weekly amount, irrespective of how many hours you you work. ⁓ now employers can pay someone a salary ⁓ and not have them be exempt and still pay them an overtime premium and still track hours and still do all of that.

But ⁓ MIchele N DiMeo: Mm-hmm. Doug Plass: As far as to be exempt from overtime, you have to you have to guarantee that fixed weekly amount of six hundred and eighty-four dollars per week. ⁓ and it does and it can't go up and down every week or anything like that. It has to be kind of a guaranteed amount, yeah, minimum amount that, you know, can change with the position or can change with, you know, can change, but but it's it's a guaranteed amount that doesn't generally fluctuate.

MIchele N DiMeo: A minimum. Gotcha. Doug Plass: So, but that's the first part. The first part is you have to be paid by salary, you know, enough.

The second part, which a lot of people ignore, is the duties test, right? So you have to qualify for a particular exemption under the duties test. Mostly in restaurants, we're talking about the executive or managerial exemption, right? And in order to qualify for that.

MIchele N DiMeo: Mm-hmm. Doug Plass: You your primary duty, your employees' primary duty has to be managing either the entire enterprise or a recognized department of the enterprise. ⁓ they have to have at least at least two full-time equivalent employees working under them. ⁓ and they have to have either the ability to hire and fire or their their ⁓ input is given particular weight having to do.

with hiring and firing decisions. And there's some more intricacies ⁓ to it than that, but that's basically how it goes. If they're primarily there to ⁓ you know cook the food, that then you're you might have a hard time getting into that exemption. You know, somebody that that a shift lead is an example, right?

So you have a you have a bunch of people coming in there, you know, you have four line cooks, MIchele N DiMeo: Mm-hmm. Doug Plass: And one of them you've kind of said, You're the shift lead. Well, they're not necessarily the chef or the kitchen manager. They're they're kind of something else.

They most likely would not be able to qualify for that exemption in that case. MIchele N DiMeo: Gotcha. So what do you feel is the largest area of lawsuits when it comes to wage and hour violations? Because I mean, th that that's such a there's a lot of gray to it, even though there's black and white laws.

So what tend ⁓ you know, where do you come into play when when you talk about these lawsuits in regards to wage and hour? Doug Plass: So from what I see, and and and this is kind of there's a a few caveats here, I I th when I see an an issue with restaurants ⁓ come up, a lot of times it's during a Department of Labour investigation. ⁓ most of those don't proceed to a lawsuit. ⁓ but during those investigations it's it's three things it's tips, minimum wage and overtime.

⁓ you know, child child labour gets thrown in there as well. But You know, tips are always a big issue. But as far as things that actually progresses to lawsuit, it's all I see overtime violations all the time. ⁓ I s what what happens is, you know, it's and it's usually misclassification.

Usually we say, you know, this is an exempt employee. the employer doesn't track the hours because they're an exempt employee, doesn't bother to even, you know, collect the records. ⁓ MIchele N DiMeo: Mm-hmm. Doug Plass: Doesn't track the hours, and then you know, they work for some period of time and then they leave, ⁓ maybe not under good terms, and then they bring a lawsuit saying they're owed over time for all that time work.

And the and the employer is in a bad position because they don't have records either, right? So they're trying to reconstruct how much this person actually well, first they're trying to, you know, fight as to whether or not they're exempt. ⁓ but you know, a lot of times it MIchele N DiMeo: Actually were Doug Plass: turns out that they're not, and then you know, the employee's word is going to be given a lot of weight there, right? I say I worked this amount.

You know, they don't have a record. Prove me wrong. So I s I do see a lot of those sorts of things. Most of the other stuff usually gets gets ⁓ resolved at the administrative level, ⁓ but not always.

MIchele N DiMeo: Yeah. You actually just answered my my next question is as owners, what should you audit on a daily basis? I guess keep great records in terms of what people work, especially, you know, and nowadays, like you said, a POS, they should be clocking in and out anyway. You know, they shouldn't be working off the clock.

So you should be able to go back like toast and a lot of these POS systems actually keep great record keeping and great and great timekeeping. So if they're really doing what they should, you should have the ability to audit that information on a on a daily basis or yearly basis or however long is needed for any type of dispute. Doug Plass: Yeah, and I would I and I would, you know, I would ask even your exempt employees, even your managers, I'd ask them to clock in and out. I've seen I've seen some of these disputes before where you're you know, you you're ⁓ you know, your sous chef's just clocking in at the beginning of his first shift of the week and clocking out at the end of the week.

⁓ so they're clocked in the whole time. Well, I'm pretty sure you didn't work a hundred and twenty hours this week, but ⁓ You know, so yeah, it the systems are great. Just make sure that people are trained to use them properly, 'cause you're gonna have all the records you need then. ⁓ and then when the Department of Labor comes calling, it's really easy.

It's you know, one button, download the file, here you go, take a look. MIchele N DiMeo: Yeah, you know what's it's also good for ⁓ and we we preach this on every store clock in, clock out, clock in, clock out. Because the problem is if God forbid they're hurt or something happens and they're not working and they're not on the clock or they forget to clock in, that's an insurance nightmare. Because the first thing an insurance workman's comp the first thing they ask is, send me the employee records where they were showing that they were actually in the restaurant working.

⁓ we actually have had problems where, you know, they forgot to clock in or they fell. I mean, we had one restaurant, this was years ago. ⁓ I think it was almost 15 years ago, she's a bartender and she literally was standing up on one of those ladders to reach a high bottle and she fell and the bottle came down and literally cut open her wrist. And I mean, she had to have surgeries and it went on for a long time.

And if, you know, we didn't have the workman's comp or we didn't have show that she was actually on the clock, and I mean, that's a whole nother nightmare. You know, so it's important to protect your employees and yourself, ⁓ if everybody follows the system. Doug Plass: Absolutely. MIchele N DiMeo: Yeah.

So let's jump into employee complaints because I know you do you handle a lot of different areas of employment law when it comes to restaurants. And I'm sure you see this a lot with harassment, discrimination. there's the list probably goes on and on and on and on. But talk about some of the I guess areas that restaurateurs can protect themselves on this level.

So there's not lawsuits brought. against them. And and that goes back to like I said earlier, prevention versus litigation and liability. Doug Plass: Sure, yeah.

So I mean you should have ⁓ you know, all business owners should have a process for handling employee complaints, right? And you know, this is something that's gonna go in your employee handbook. If you don't have a handbook, I mean you should, but if you don't, you you have it somewhere and you have it available for the for the employee and for your managers to know what to do in that situation, right? So who is who You know, what is the complaint process?

Who do they go to? You know, who do they tell bring a complaint to? What do you do if the complaint involves the person that you generally would bring the complaint to? Right?

So you have to have some all alternate reporting ⁓ happens. Yeah, because it's usually make the complaint to your supervisor. Well, a lot of time it's the supervisor that we're complaining about. So have some way to handle that.

Be be a have thought about that. And then MIchele N DiMeo: Which happens a lot in the restaurant business. Doug Plass: you know, a process for dealing with the complaint. And usually what this means is an investigative process, right?

So ⁓ you know, whoever gets the complaint is going to initiate some sort of investigation into it, ⁓ depending on the complaint. It might be something really informal, just talking to a couple of folks. It might be something more more detailed, like even bringing in an outside investigator if that complaint involves one of your high level leaders. For instance.

and then it should have some sort of resolution process. So what's going to happen afterward? ⁓ so you know, we are going to, you know, ⁓ engage in discipline or, you know, discipline the employee, determine what we're gonna do with that. ⁓ is the complainant gonna know what happened?

you know, are you gonna tell the complainant that it's been resolved or what's gonna happen with that? So some sort of MIchele N DiMeo: Is there a lie is there some type of liability that they have to tell the complaint that it's been handled? Because I I mean that's also a gray area, right? Because I mean, obviously how you handle things in your restaurant doesn't always have to be communicated a hundred percent to the person complaining.

I mean, obviously you want to tell them it's been resolved, but do you have to go into detail about what type of resolution occurred or what's the what's the rule there? Doug Plass: No. Yeah, yeah, I mean, generally not, but I think you're right. You sh you should tell them that it's been resolved.

Because the the problem is if you don't share the information, then you have a vacuum there. And what's gonna go into that vacuum? That employee's gonna start thinking, you know, my complaints are not are are not ⁓ even addressed. They didn't, you know, they're discriminating against me, they're they're retaliating against me for for making a complaint or something to that effect, right?

So, ⁓ MIchele N DiMeo: And Doug Plass: And here's the other reason why you need a complaint process. So if there ever is a ⁓ a lawsuit brought, a claim brought against you, you know, a discrimination claim under, you know, Title VII of the Civil Rights Act or under the Americans with Disabilities Act or the Pregnant Workers' Fairness Act or kind of a number of other ⁓ laws, you have this thing called a ⁓ MIchele N DiMeo: Mm-hmm. Doug Plass: So it's a Farger-Ellerth defense that's based on some Supreme Court cases.

And that basically says the defense available to the employer that says, look, we had this ⁓ process available to the employee where they could have resolved this problem, and they failed to use that process. ⁓ and therefore we are not necessarily liable for what actually occurred. So Once you have that process in place, the the onus is on the employee to use the process so that you can deal with these problems. And if they don't do so, that's a good defense for you.

MIchele N DiMeo: Interesting. So what happens on a franchise piece? So, you know, the franchisor and the franchisee, right? Obviously, the franchise can't get involved in every franchisee issue or litigation.

However, what's the franchiseor's legal right or responsibility if there is an employee having a problem with a franchisee? Because at the end of the day, really they should be bringing it up, bubbling it up to the franchisee, the owner of the franchisee, they should have a policy, they should investigate. So what happens? Because we're talking restaurants now.

So full service, obviously there's a whole process. You have HR, you have your your step by step employee handbooks, documentation, blah, blah, blah. But what happens when it's a larger company and now you're dealing with fast casual in a franchise, franchise or model? Doug Plass: So the the first question to answer is who's the employer?

Right. So ⁓ generally that's going to be the franchisee. But if you have a situation where the franchiseur has a lot of control over the individual employment decisions of the franchisee, that might be kind of a gray area. And if you are the employer, MIchele N DiMeo: Mm-hmm.

Doug Plass: then you are responsible for the actions that you take regarding that employee. So ⁓ it's interesting because I've seen situations where ⁓ you know, the fran where a franchisee is ⁓ just kind of like, well, this is kind of how it's done. And they don't really even think about the fact that something might be illegal some practice they're engaged in might be illegal. Right, because they feel like they have this umbrella of this larger organization that's in some way protecting them.

Well, like it c sc bad practices can propagate through that organization just like they can through any organization. So that's you know, it's it's it's not like you're that there's any particular protection that you're going to get from being in that organization. I think it it's you know, it's gonna be pretty ⁓ individualized and franchisees have MIchele N DiMeo: Yeah. Doug Plass: an obligation to make sure that they're doing things correctly.

because generally they're it's gonna fall on them unless there's specific facts saying that it's not. MIchele N DiMeo: Yeah. Hmm. Yeah, it it's there's such a gray area when it comes to the franchise or and the franchisee because, you know, it's truly their business.

They make all the decisions. I mean, obviously, as the franchise or you say this is what you should be doing. This is the training you shouldn't be ⁓ following. These are the systems you should be using, but not every franchisee follows those systems.

And, you know, then when something happens, they're like, Well, what should I do? You know, and they call the franchise or and the franchise the first thing we ask is the same thing that you just said. Where's your HR manual? Where's your documentation?

Where's your audit? And if they don't have it, it's a hard place to start, you know, because you kind of have to go back and scramble. And I mean, you know, not everybody follows the the system, unfortunately. Right.

I'm sure you see that all the time. I probably just asked all the questions you asked. Where's your operations book? Where's your employee handbook?

Where's your performance logs? I mean, it's it's a standard process, but Doug Plass: Right. Yeah, unfortunately. Yeah.

I do, I do. MIchele N DiMeo: You know, to get everybody to follow it sometimes is the hardest part. Yeah. So for anybody listening right now, I mean, obviously we covered a lot in a short amount of time.

I mean, in terms of wage and labor, overtime, tip credits, ⁓ I mean, you know, child labor laws is a whole nother show. I mean, what's your restaurateur listening right now? If they hang up and they go back into the restaurant, what are some tips for them to? Doug Plass: Absolutely.

It is. ⁓ yeah. MIchele N DiMeo: just to go back and do some high level audit and checks to make sure that they are compliant with what we discussed today, which could lead into a big problem if they're not compliant. Doug Plass: Well, I I mean, ⁓ this is kind of something I preach all the time, but you know, get a handbook, right?

Get policies in place. If you the the first question, if you don't have that, stop and get it. You know, ⁓ either contact an employment attorney or, you know, an HR consultant, or you know, ⁓ I mean, I I I hesitate to advise anyone to like use AI, but a lot of people do. Like find something.

Find find something. ⁓ a handbook in place, make sure you read and understand it and are prepared to follow those policies because the we talked about the reporting pr process for complaints. That's the most important thing that's going to go into that handbook. There's going to be a lot of other stuff in there too that is going to be knowledge that your employees have on what the rules are of you know of my employment, of my job.

But it's also going to be a roadmap for your supervisors and your managers. On how to do the things, how to answer those difficult questions and how to deal with those difficult problems. So that's the first thing that I would do. I would also, you know, if you have exempt employees, you're going to want to ⁓ make sure that they are they are passing both the ⁓ salary basis and the duties test.

⁓ the Department of Labor, the US Department of Labor has these great fact sheets ⁓ that are available to anyone. Just get on the website. ⁓ if you have a question, type it in. They'll probab they probably answered it a million times already.

Download those, read those, make sure you understand those. ⁓ and then documentation. You know, there's ⁓ you know, the certain documents that you have to have, records that you need to keep ⁓ for three years, usually having to do with wage and hour stuff. Make sure you have them.

If you don't have them, ⁓ you know, do your best. to recreate whatever record you don't have and make sure going forward that you're keeping all that all that information. MIchele N DiMeo: So you said so that was my next question. How long should employee records be kept?

You said three years. Doug Plass: Generally for three years. Under the under the Fair Labor Standards Act, ⁓ you know, the statute of limitation under that act is is two years ⁓ and then three years for any willful violations, but generally pretty much everything is found to be willful because employers are expected to know what the law is. ⁓ so there there are very few times where ⁓ where an employee or where the Department of Labor won't be able to go back three years into MIchele N DiMeo: C does it have to be actual like paper documents or can it also be electronic?

Doug Plass: No, it definitely can be electronic. In fact, you know, electronic is the best way to go. You can back it up in multiple places, and not have all those those ⁓ you know, bankers boxes that you never open again. MIchele N DiMeo: Yeah.

I know, right? And then it's we gotta shred all this stuff. I mean, I'm such a paper person. And then when you go to move in office, you're like, ⁓ my God, where do we have all this paper?

So, well, Doug, you're never gonna believe it. We're at 40 minutes. We made it through. We didn't glitch.

We had volume. We had a microphone. So we were very successful in in filming the show today. So that's good news.

But before you go, ⁓ at the end of every show, I always do rapid fire kind of Quick lightning round questions. They're just quick, meant to be one or two minutes, just to kind of pick your brain on a couple key topics. So I'm gonna throw them out to you and let's start there. So ⁓ text messages, are they legal evidence or not?

Doug Plass: Absolutely. MIchele N DiMeo: That's a good one to know because I've heard from other people that, you know, you can't use a text message, but it's documentation today, right? Everything. I mean, email or text.

Doug Plass: It's documentation You know, they're they're hard to get because you can't ⁓ you know, they get deleted and and they aren't necessarily saved on some server somewhere, but they are evidence. They're evidence, you know, the same way a conversation is ev ⁓ you know, a a in person conversation is evidence. It's just ⁓ you know, in that case you have to rely on somebody's recollection, which is not as reliable. A text message is written, it's a writing.

It's good evidence it it's generally admissible. MIchele N DiMeo: What about social media? What if something shows up on an employee's social media that incriminates them to something they did while you they were in your restaurant? Doug Plass: ⁓ yeah, if you know about it you're gonna ha you're gonna wanna act on that.

That's that's absolutely ⁓ you know, in in the in the modern world pretty much everything is fair game. MIchele N DiMeo: Okay, good to know. So if an employee employer monitors an employee's social media, then it's technically evidence. Okay.

What's the biggest employment law myth? Doug Plass: Yeah. ⁓ regard regarding restaurants, I'm gonna have to say it's if if everyone does it, I'm not gonna get in trouble for it. Because I've seen that over and over again.

I mean, I I you know, I'm I definitely want to get ⁓ restaurant owners to handle tips better, but I you know, I've seen where eighty eighty, ninety percent of them are doing it wrong and they think they're not gonna get in trouble for that. The Department of Labor doesn't care. They're gonna show up. ⁓ if they get a complaint and you're gonna get investigated and you'll be found liable, you know, regardless of how many other people are doing.

MIchele N DiMeo: All right, so let's test your restaurant background catering chef. What's your favorite meal to cook? Doug Plass: ⁓ well, you know, it's summertime right now, so ⁓ it's it's ⁓ you know, whatever's fresh that I can put on the grill actually, you know, vegetables out of my garden, ⁓ and maybe a nice piece of grilled fish. I mean that's that and a nice glass of wine and I'm I'm set.

MIchele N DiMeo: Nice. All right. Well, for everybody listening, you know where to find me. DMs are always open.

You can go to LinkedIn, restaurantdiva.com. We now have ⁓ a great website for dynadish podcast.com.

And Doug, for anybody listening, where can they find you if they have any questions in regards to employment law or wage and ⁓ labor issues? Is there a website or a phone number that they should call or email? Doug Plass: ⁓ yeah, so ⁓ our website here at IDO Employment Lawyers is www ⁓ dot id employment lawyers dot com. ⁓ and that's a good place you can get links to other things.

⁓ we also I also have a podcast that that we do here. Yeah, we have a podcast that we do here ⁓ that I'm a contributor of. It's called Ground Rules, ⁓ Employment Law Over Your Coffee Bake Coffee Break. So you can go ahead and look that up online.

⁓ and we published a book. MIchele N DiMeo: ⁓ that's nice. I didn't know that. Doug Plass: ⁓ we have our Law for Leaders book that I'm a contributing author on as well.

⁓ so all those are good places to get information and to find out how to come. MIchele N DiMeo: Actually, you just answered another question. I was actually gonna ask you coffee or espresso, but you just said coffee. Doug Plass: Well, I mean, you know, I what I truly like is a very short Americano, but you know, I'll take what I can get.

MIchele N DiMeo: ⁓ and what would you want to leave everybody with today? You know, if you can give one piece of advice to every restaurant owner that's watching the show, what would that be? Doug Plass: ⁓ I think it would be make a plan, like pause and think things through before you act. I think when we're in the in the restaurant industry, it's go, go, go.

It's like let's deal with the immediate problem today. But I think if if if everybody took a minute to think about what systems I need to get into place, ⁓ who what help do I need to to ⁓ to marshal in order to answer this problem? Just pause and be a little more thoughtful, I think you'll you'll do just fine. MIchele N DiMeo: Yeah.

Well, for everybody listening, you heard it from Doug, you heard it from me. Restaurants are not just there to entertain and experience. You need to have great systems. I say it all the time.

Without systems, there's chaos and you need to be compliant. You know, there's I know everybody hates paperwork and they hate numbers and they hate keeping books and you know restaurateurs are like artists they're kind of all over the place but you gotta kinda herd things back and create a culture and environment that's safe and happy for everybody to work in and you don't want to have lawsuits and waste money on things that you don't need to waste money on and put your money in your pocket and build other restaurants and create happy people, right, Doug?

So it's not good for your business, but it's good for our business. Doug Plass: Absolutely. You know, I mean we spend a lot of time trying to deal with problems on the front end. Well you know, I don't I don't like lawsuits any more than the people that are getting sued.

I don't wanna be doing litigation. I'd much rather be going out and doing training and helping people do things right. MIchele N DiMeo: Yeah, yeah. Well, thank you so much for being a guest.

We got it to work, and I'd love to have you back in a future show and maybe we'll do something with your podcast. ⁓ yeah, but thank you again. And for everybody listening, that's another episode of Dine and Dish, and we'll be back next week with another great topic. Thanks.

Bye Doug, thank you. Just hang out for just a second to make sure Steve got everything. Steve, are we good? Doug Plass: Sounds great.