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.
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.
While big corporations and companies get sued fairly regularly, small businesses are liable these days as well. Small business litigation suits are more common than people think, and they can have serious consequences for the companies involved, including costing huge amounts in legal fees and settlement costs, tainting professional reputations, and taking up valuable time and effort. If you own a small business, be sure to safeguard your company from these four common small business litigation suits:
- Breach of contract – Contracts often come with fine print, and if one or more parties violate any of these fine-print terms, a lawsuit can ensue and a small business can owe thousands of dollars in things like court fees and settlement costs.
- Debt litigation – If a business doesn’t settle their accounts, pay their bills, or pay vendors and merchants, those parties can choose to file suit so that they can collect on the debts owed to them. Alternately, a small business can also choose to sue customers or vendors who refuse to pay them.
- Wrongful termination – If an employer or organization fires an employee without due cause, they can be sued for wrongful termination. Termination can also be wrongful if the employee was discriminated or retaliated against, or if the company didn’t follow its own termination processes and procedures.
- Workplace injury – Although some workplace injuries can be settled through worker’s compensation, the employee may seek compensation in another way if the business doesn’t carry worker’s comp insurance. This is often done through a lawsuit, which can garner the injured worker funds for pain, suffering, lost time from work, permanent disability, and medical bills.
Small Business Litigation
If your company is facing small business litigation suits like the ones above, don’t go through it alone. Contact McElfish Law Firm today at (310) 659-4900 to enlist the help of a professional and experienced small business attorney.
Disclaimer: The information in this blog post is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from McElfish Law Firm or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.