In order to protect laborers, the United States Department of Labor requires restaurants to follow various labor laws. These laws ensure that your establishment remains a safe, healthy, and fair place for all employees.  Having clean, up to date employee records will go a long way.

This article is going to go over a few labor laws, employee forms, and employee records you should tackle in time for the New Year.

Tackle Overtime for Tipped Employees

While the minimum wage for tipped employees rests at $2.13 an hour, tipped employees who work over time are required to be paid one and a half times applicable wage, not the $2.13 rate. To calculate overtime for tipped employees see the table at the bottom of this page*.

Go through time stamps for the previous year and eliminate any overtime hours, unless your employees are receiving salary. This will help eliminate unnecessary overhead cost, and perhaps bring in some fresh talent to the team.

Make Sure Staff is Earning Minimum Wage

The DOL requires tipped employees make minimum wage. Calculating whether or not your staff is earning enough in tips and biweekly pay can be difficult.

Go through and make sure your staff is making minimum wage and ensure this system is fool-proof heading into the New Year.

Updated Employee Reviews

It is suggested that you keep periodic employee evaluations in your employee records.

Make sure that these evaluations pertain only to their work history and do not branch into his or her personal life.

Record things such as performance and disciplinary action. Make sure these records are kept up to date.  This includes rosters and timesheets as well. Every employer needs to have accurate record of time worked for each employee.

Have Every Employee Fill Out an I-9

Make sure that all your hiring documents are in order. This is especially crucial for restaurant owners when hiring legal immigrant workers.

Ensuring that these individuals are registered to work within the United States and/or need sponsorship for their stay in the country is crucial to running a legitimate business.

Practice an Internal Audit

Business best practice is to conduct an internal audit of I-9 forms every five years. If it is about that time, going through your I-9 records and ensuring everything is up to date will set you up for the new year. If you want to know how to set up an easy filing system for your I-9 forms (easy to keep track and easy to audit) check out this exclusive NMRA webinar.

It is important to keep on top of your employee records, so don’t forgo this very important step.

Don’t Forget Reverification

Last but not least, don’t forget to reverify. This is important for immigrant employees. This simply recertifies employment authorization and is an essential step for restaurant employers of immigrant workers. If the U.S. citizens and permanent resident’s files expire, however, there is no need to reverify.

Keep All of Your Documents on Track

Making sure all your records are updated and current is the cornerstone to any successful business.

Do not forget these important steps heading into the New Year.

*Calculations for paying overtime to tipped employees:

Exercise: Tipped Employee Exercise: Tipped Employee

Alternate Method from Previous Slide

Employer Paid

Hourly Wage: $2.13


Tip Credit Claim: $5.12


Hours worked: 50


Regular Rate: $7.25


Additional Half-Time Rate: $3.63


50H x $7.25 = $362.50

10H x $3.63 = $36.30


Total Due:

$362.50 + $36.30 = $398.80


Tip Credit:

$5.12 x 50 = $256.00Total Cash


Wage Due:

$398.80 – $256.00 = $142.80


Employer Paid

Hourly Wage: $2.13


Tip Credit Claim: $5.12


Hours worked: 50


Regular Rate: $7.25


Half-Time Rate: $3.63


OT Rate: $5.76 ($2.13 + $3.63)


40H x $2.13 = $85.20

$10H x $5.76 = $57.60






Total Cash Wage Due:

$85.20 + $57.60 = $142.80


MEMBERS:  If you haven’t already, make sure you get your FREE Employee Handbook that is customized for your restaurant by a New Mexico employment attorney.  Contact us to find out more.