Posted on July 16th, 2019
Transcript of this video below:
Tommy:
Yeah. So you mentioned break compliance as an issue in the restaurant industry.
And can you elaborate on why there are so many claims in the restaurant industry for break compliance and maybe touch base a little bit about what this law… What is this law and what a restaurant should do?
John:
Yeah, well in California anyway, you need your 30-minute break right in the middle of a shift. And then you have two 10 minute breaks at either end, right? So that’s the gist of it.
And then there’s a lot of overtime problems with restaurants also. And so everybody should know that it’s anything over eight hours a day or over 40 hours a week. And when people don’t really analyze it, they don’t know that there’s a difference there.
So if I only worked one day, but I worked nine hours, that’s one hour of overtime I’m supposed to be paid. If I only worked four days, but I worked 12 hours each of those days, that’s… well, that’s actually double time.
But that’s overtime, that’s more than 40 hours a week. So there’s either overtime or double time based on that.
So you’ve got to calculate both, right? You’ve got to… Both of them matter. There’s two types of, that I’ve seen, problems.
There’s a very slow restaurant, right? And so basically they have their one or two employees or however many they need, and then they’re sitting around all the time just waiting.
So there are no official breaks. It’s like, “Hey, you have plenty of time. So that’s your break.” But then when there’s work, you do the work. There’s a problem with that because if they’re just waiting around, they’re not off the clock. Breaks have to be uninterrupted.
They have to be, especially on that 30-minute break, they have to be free to leave. So if they’re just waiting around and then they do the work as it comes, it’s not uninterrupted.
So even though they’re doing their own thing, like watching movies or texting or whatever else, it’s still not an uninterrupted break. So it’s basically the same as you didn’t give them any break.
So I always see that problem. And then the other one I see is with very successful restaurants where they’re understaffed. And it may not be always understaffed, but you know, a couple of people call in sick or whatever happens, right?
And so you get a busy time and then people just don’t have time to take their breaks. Well if that happens, then you’ve got to pay them for the breaks they didn’t take. And I think you should log it and pay them.
That way, whenever someone says, “Yeah, I took… I had all of these days where I didn’t take my breaks.” Then you haven’t logged the times they didn’t.
And even though California law doesn’t require you to track the 10-minute breaks, it just requires you to offer them, I always say, “Track them.” I say, “Track everything” because that’s what you’re going to get.
You’re not going ,to get the, “Oh well it was only this day and this day.” You’re going to get the complaint that. “I never got my 10 minute breaks.” And then that goes back three years multiplied by the number of days… It’s just too much money.
And especially if you’re in that Labor Board. See, in Superior Court, they at least have to prove this. In the Labor Board, they don’t care. It’s, they say it, and then you as the employer have to prove that that’s not true.
I mean, I’ve had cases where some guy put in all of these hours and said, “I worked all of these hours and didn’t get overtime for it or didn’t get paid for it.” And when you do the math, it didn’t work out. Like, no, it’s impossible. They’re not open on Mondays.
They’re not… And all they do is, they just deduct the math. Whatever we can prove isn’t true, they just deduct the math. And even if I argue, “Wait a minute, either this guy has a bad memory or he’s a liar.” They don’t care about that.
So I’ve had cases where the guy was on vacation for two months in a different country and then I’ve had to go back and bring up his Facebook and say, “No, he couldn’t have possibly worked on these hours because look, he was in wherever he was.” I don’t remember where it was.
It was like Honduras or something. “Look, he was in Honduras, there’s no way.” And they’re just like, “Okay, so we’ll take that stuff out.” So that’s why better to track everything.
And when I tell people about the Labor Board is, documentary evidence is the best evidence. Next is witnesses. But witnesses aren’t that good because he’s going to have witnesses. You’re going to have witnesses.
So if you have documented evidence, the best thing you can do is track, track, track. And even if you’re an entrepreneur like me who likes the big picture more than I like the detail. I think most entrepreneurs are like that.
Then hire people around you that are detail oriented. Hire someone to do all the tracking, because… if it’s not something that you want to do. Hire people to look every day, someone that goes, “Wait a minute, you didn’t clock out for lunch.
Come over here, let’s figure this out. Sign this thing that says, no, I did take my lunch.” And if they didn’t take their lunch, pay him for it and log that and track it.
And it seems ridiculous, but that’s where you are, you know. That’s where you are if you have a business in California.
And if that’s not what you want, you have to move to Texas or one of these other states that are employer-friendly because California certainly isn’t.
Tommy:
So definitely have… Make sure that you have records in place to prove that breaks were given, really. And if you don’t have records in place that breaks were given, then it’s kind of a he-said she-said scenario and believable will always-
John:
Yeah, you’re always going to lose the he-say she-say. And even in litigation, you can potentially lose the he-say she-say. The he-say she-say in Superior Court is usually based on the character of the person.
Who does the jury believe? And I’ve had cases where… Well, one in particular. One jury case that I was disappointed I lost because I thought we had a good case.
And it was, you know, some guys that were working on a construction site. And they were taken from Home Depot. They were like Home Depot guys that this particular employer would hire to do odd jobs here and there, but wasn’t consistently…
They didn’t work 40 hours a week for her. And so because she didn’t track anything, it was dependent on who they believed and what the testimony was.
Well, unfortunately, she was kind of one of these hardcore construction people that just was not likable. The jury just didn’t like her.
So they went with the guys sitting at Home Depot, and we could even show that she didn’t have that much work. It was single family homes.
She had a schedule. She had everything. They just didn’t like her. And so that’s what it comes down to a lot of times. It’s what the jury thinks, whether they like you or not. Who’s most believable when you don’t have the documents?
Labor Board? Doesn’t matter. No documents you’ve lost.
Tommy:
Hmm. Got it. So moving onto split shifts, is this an area that a restaurant… that you see a lot coming up in the restaurant industry?
John:
Not a lot. I don’t know if it’s just that restaurants aren’t doing it or nobody’s catching them with it. Most of the split shift violations that I’ve seen is actually been administrative. It’s been the government, not some employee complaining about it.
So, well, it starts out with an employee complaining about something. So instead of going to the Labor Board for a wage claim, they go to some other department. I mean there’s a hundred departments in the Labor Board that you can complain… Or the Labor Commission that you can complain to.
So they go to a particular department and say, “Hey, I don’t know what’s wrong, but they’re doing something wrong. I don’t feel like I got treated fairly.” So then that department will contact the client, say, “Hey, give me all your records.”
And then they’ll look and they’ll say, “Oh wait, you do split shifts? Are you paying for that extra hour to have a split shift? No, you’re not.
Well, let’s go back three years, the number of employees.” And then suddenly you have this big fine.
Tommy:
Got it. So you know when an employee goes to the Labor Board and the Labor Board finds something, they’ll look at all of your employees.
John:
Yeah. Because the Labor Commissioner’s trying… Well, number one, they’re trying to justify their jobs, I imagine. And then number two, that’s really what the Labor Board is there… to defend the employee.
So, even if it’s just a mistake, “Hey, I didn’t know that with split shifts, I had to pay this extra hour.” It becomes a problem. And here’s the bigger problem that people don’t realize is, you’re required…
When someone is fired, you’re required to pay them that day, whatever dollar amount you owe them. If they quit, you’re required to pay them within 72 hours.
If you don’t pay one of those two ways, you know, depending on what the situation is, there is a penalty that accrues. Which is their daily salary… So if a guy makes $100 a day up to a maximum of 30 days, right?
So that’s potentially, if everyone’s making $100 a day, that’s potentially $3,000. So what I’ve seen with split shift violations is they go back three years and if they’re still employed with you, no problem.
That penalty doesn’t get assessed. If it’s people that are no longer with you, that penalty gets assessed and it can be very very hefty.
So imagine if you have 10 people that no longer work for you. Right away, if they make $100 a day, that’s 30 grand, just right there.
Tommy:
Wow.
John:
Now that’s not even what you owe them and what the penalty is for missing the split shift, see? So these things can get out of hand very, very, very quickly.
Tommy:
Is there any other areas that you want to touch base on that you see impact the restaurant industry?
John:
Let me think here. So all of the restaurant problems I’m having… Most of the restaurant problems I’m having is wage and hour or some sort of harassment.
And they’re all based on people that quit. Oh, funny story. So I have one particular restaurant which just happens to have a lot of of these issues.
Not because they’re doing anything wrong, but because the owner… he’s one of these guys that’s very detailed oriented and very hands on. And so he expects everyone to work as hard as he is, rightfully so, because he’s paying them.
So he’s fired quite a bit and everyone he’s fired… not everyone, but a lot of the people that he’s fired have come back.
And he’s even… even people that he’s fired for embezzlement and things like that have come back and tried to sue.
Because, that’s just the environment that California’s in. Of course we sue for the embezzlement and then it sort of works itself out.
But I was… A friend of mine came into town on Saturday. We went to Venice to visit one of his friends that he hadn’t seen in awhile.
We walk up into this in this apartment and there’s a girl sitting there and I say, “Hey, I recognize you from somewhere.” And she’s like, “Yeah, I recognize you too.” And we started talking, trying to figure it out.
And it was one of the girls that had gotten fired from this particular restaurant and had sued and we had countersued her, and then it was just like a basic walk-away, right? You walk away, we’ll walk away.
And so it was like, “Oh, I’m very uncomfortable, but okay.”
Tommy:
That’s an interesting night.
John:
Yeah. Small world. Right? Small world. But that just shows you how many lawsuits there are out there.
Me, one guy, you know, handling whatever percentage of these lawsuits that happened in California, which is probably not even 1% of them, randomly runs into a girl that’s sued one of my clients for what are these bogus claims.
That’s how many of them are out there.
