Raising the minimum wage will have severe consequences, especially for those working in the restaurant industry.
A higher minimum wage will result in a challenge for restaurants, which depend heavily on hourly workers. The increased cost of labor will likely cause higher costs to customers. Restaurants could also cut hours or the number of employees they have while relying more on computers to service customers, or ownership will be forced to take on shifts themselves to defray costs or significantly raise the price of their product. Some restaurants may even be forced to close.
In Los Angeles, instead of increasing menu prices some restaurants are eliminating tipping and instituting a “service charge.” A service charge is restaurant property, whereas tips are the property of the server. Currently, servers average 20% tip. After paying out support staff they usually take home about 14% of the total sales for the night. This would prevent businesses from passing the cost onto the customer. If businesses keep raising prices, the consumer loses and eventually may stop consuming. With nowhere for business owners to hide from the minimum wage increase (say, in other neighboring municipalities) except out of state, Los Angeles could be in the same boat, for better or worse, as every other city in the state.
It is important to contact your attorney to make sure you understand and are in compliance with the new minimum wage laws that have been enacted in the city of Los Angeles.
What Is a Business License?
A business license or permit is generally recommended, and sometimes required, for individuals or businesses to operate in California. Business licenses exist at the local, state, and federal level. Licenses and permits cover almost every type of business activity, such as building construction, restaurants and nightclubs, retail sales and the ability to work as a licensed professional.
What Determines the Licenses I Need?
The type of licenses or permits you will need depends on several factors, including:
•Your profession or occupation
•Whether you are an employer or an independent contractor
•Your industry and business activities
•Your place(s) of business
Professional Licenses in California
Depending on your profession, you may need to obtain a license to practice in California, even if you have been previously licensed in a different state. The licensing requirements vary by profession, and many are issued by the Department of Consumer Affairs. A few of the professions for which a license is required are:
•Aestheticians and Cosmetologists
•Real Estate Brokers and Agents
Do I Need Any Local Permits?
Local permits are dependent on city and county requirements and ordinances. Local licenses and permits are common for items such as:
•Construction or renovation
•Local business licenses
License and permit requirements vary, so to be sure, you should check with your local authorities.
How Can I Find Out If I Need a Professional License?
You should always check with your local authorities in the city or county where you plan to work or operate a business.
Should I Consult a Business Attorney in California?
Applying for business licenses and permits may not require the help of an attorney. However, if you are setting up a new business, an experienced business attorney can help provide guidance on permits, as well as other business organization issues. If you have been charged with criminal or civil penalties for a failure to have a proper permit, an attorney can help defend you.
What Is a Dram Shop Law?
A dram shop law is a type of statute which holds any business establishment strictly liable for selling alcoholic beverages to a person who is obviously intoxicated. The purpose of dram shop laws or acts is to increase the responsibility of those who make profits by tendering alcoholic beverages to guests. The word “dram” refers to a British unit of measurement for serving alcohol.
Dram shop laws usually deal with prohibiting alcohol sales to intoxicated persons, but sometimes they may also cover the sale of alcohol to minors, as well as issues with licenses and identification. Most states have some form of these types of laws, but they vary widely between jurisdictions.
What Is California’s Dram Shop Law?
Dram Shop laws in California are extremely limited. Recent California legislation has removed the strict liability for businesses who serve alcohol to patrons. It should be noted that this limitation only applies in civil court. Criminal law penalties may still apply to businesses who serve alcohol to obviously intoxicated persons. It should also be noted that the limitation on civil penalties protects licensed alcohol vendors but provides no protection to hosts of parties or other social events where alcohol is served.
Despite California’s limitation on holding liquor stores or bars responsible for selling alcohol to persons who are obviously intoxicated, California establishments still may be held liable for serving alcohol to a minor who subsequently injures another person as a result of being intoxicated.
Why Is There No Civil Dram Shop Liability in California?
The rationale behind the California legislature’s decision to limit civil liability for serving alcohol to an intoxicated individual is that it is often difficult to determine who is at fault if an intoxicated person gets into an accident after consuming alcohol. Strict liability implies that the business establishment must have caused the accident by serving the person alcohol.
Nevertheless, California case law has held that the consumption of alcohol, and not the serving of alcohol, is the proximate cause in the case of an accident. Thus, the sale of alcohol by bars and liquor stores in California is not considered to be the cause of an automobile accident.
Do I Need a California Lawyer for a Dram Shop Claim?
Whether you are a business owner or a party or event host, it is important to retain a lawyer if you have been charged with negligently providing alcohol in civil or criminal court. This is especially true if the incident involves the sale of alcohol to a minor.
Dram shop violations, like many other areas of law, can be complicated. Hiring an experienced lawyer can help ensure that you meet all the various court requirements and deadlines for your claim. A qualified lawyer will help you understand the legal basis for any claim against you and can also help you resolve the matter as quickly as possible.
If you own a restaurant or are considering opening one soon, here is a list of current legal issues that should be front and center for California restaurant owners in 2017:
1. Overtime – employees earning between $23,660 to $47,476 will qualify for overtime pay under federal law.
2. Minimum Wage – Effective January 1, 2017, the minimum wage for all industries will be increased yearly. From January 1, 2017, to January 1, 2022, the minimum wage will increase for employers employing 26 or more employees. This increase will be delayed one year for employers employing 25 or fewer employees, from January 1, 2018, to January 1, 2023.
5. Predictive scheduling –The California Fair Scheduling Act requires certain businesses with more than 500 California employees (including electronic and tech retailers, grocery stores, restaurants, and franchises)
7. Health grades – expect stricter point deductions for restaurant health grades.
8. Tip Pooling – Labor Code Section 351 prohibits employers and their agents from sharing in or keeping any portion of a gratuity left for or given to one or more employees by a patron. Furthermore it is illegal for employers to make wage deductions from gratuities, or from using gratuities as direct or indirect credits against an employee’s wages. The law further states that gratuities are the sole property of the employee or employees to whom they are given. “Gratuity” is defined in the Labor Code as a tip, gratuity, or money that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due for services rendered or for goods, food, drink, articles sold or served to patrons.
9. Wage disparity – California employers should review the compensation paid to their employees to make sure that workers of a particular race, ethnicity or gender are not being paid more for the same work than employees of another race, ethnicity or gender unless the employer can show that the disparity is fully justified by factors unrelated to membership in the protected class. It is also worth noting that law prohibits retaliating against an employee for discussing his or her salary or the salary of others or for asking about the salary of others.
10. LGBTQ workplace rights – California is now the first state in the country to require that all single user bathrooms be gender neutral. This means that all single user bathrooms must be identified as all gender. This new law applies to restrooms in all businesses and places of public accommodation.
11. Criminal history disclosure – The Los Angeles City Council has approved an ordinance that prohibits employers from asking applicants whether they have a criminal record until a conditional offer has been made to the applicant. Once an offer has been made, the employer may ask about the potential employee’s criminal record. The policy requires any employer that decides not to hire a person because of a criminal record to provide a reason for the decision.
Should I Consult an Attorney?
An attorney can help you meet all the deadlines and fulfill requirements needed to open a restaurant. He or she may also be able to help you decide which legal issues are most pertinent to your business, and work though possible strategies for the best legal protection.
From an international corporation headquartered on the world-famous Wall Street of New York to the mom-and-pop shop in West Hollywood, California, no company is immune from legal troubles. When something goes wrong for a business, a lawsuit or business litigation is likely to follow. In order to these common lawsuits as efficiently as possible, it helps to know what to expect and how to react to plaintiff claims.
If you are a business owner, executive, or manager, you should know about these four common lawsuits filed against business big and small:
- Employment discrimination: You would be hard-pressed to find a business that doesn’t have a single employee. Once someone is under your wing as a worker, you need to be aware of and strictly maintain a wide variety of employment laws. Most often, employees create lawsuits based on perceived discrimination in the workplace based on a protected class; employment discrimination lawsuits also include wrongful termination claims.
- Wage law violations: Everyone wants to collect each dollar they earn, whether paid by commission, hourly, or salary. Watch your accounts and finances closely to ensure you never short an employee what they have earned, or be prepared to get hit by a serious unpaid wages or overtime violation lawsuit.
- Breach of contract claims: No matter the size of your business, you use contracts to define acceptable practices, expectations, vendor relationships, and much more. Contract disputes can arise quickly when one party fails to uphold their end of the contract, does not understand what the contract requires, or attempts to dissolve a contract entirely. If your business uses unique intellectual property, be watchful for non-compete and nondisclosure contract violations that employees or partners may willingly or unwittingly commit.
- Partnership disputes: Leaning more towards companies and larger corporations than small businesses, partnership disputes represent one of the most troubling legal issues you can face as a business owner. Relationships with partner organizations might be the backbone of your own company, and losing them over a lawsuit can be absolutely devastating. Light steps and a solid legal foundation are required for any partnership dispute that requires business litigation.
Is your business struggling to manage a lawsuit filed against you? Do you need to create a lawsuit of your own after another party has harmed your company’s reputation or finances? McElfish Law Firm business attorneys can provide the legal assistance, guidance, or representation you need. Call (310) 659-4900 today to request your initial consultation.