The restaurant industry is among the leading contributors to the economy. According to Statista, it accounted for a total of 72.8 billion U.S. dollars in 2021. This figure makes the restaurant business a prime target for entrepreneurs.
However, few people understand the laws associated with owning a restaurant. The restaurant business is subject to various regulations, from employment and taxes to food safety. As the owner, you must comply with these laws to avoid penalties.
If you’re thinking of starting a restaurant, you must familiarize yourself with the different regulations that apply to the industry. Below are some of the most crucial restaurant business laws to ensure compliance in your establishment.
Of course, you can’t run a restaurant without employees. But hiring workers also comes with responsibilities, as you must comply with employment laws.
The Fair Labor Standards Act (FLSA) is a federal law that regulates wage and hour standards, including minimum wage and overtime pay. The FLSA applies to all restaurants, regardless of size.
As of 2021, most workers’ minimum wage is $7.25 per hour. However, some states have a higher minimum wage, so you must comply with the law that applies in your state.
You must also pay employees overtime (1.5 times their regular rate) for any hours worked beyond 40 in a week. The FLSA also requires keeping records of your employees’ work hours. These records must be accurate and up to date, as you will use them to calculate wages.
With the internet today, you can learn more about employment laws and find the resources you need to comply with them. The U.S. Department of Labor’s website is a great place to start. By knowing and complying with employment laws, you can avoid costly penalties.
Food Safety Laws
The restaurant business is also subject to food safety laws designed to protect customers from food-borne illnesses. As the food you serve is central to your business, you must comply with these laws to avoid costly penalties.
The Food and Drug Administration (FDA) regulates restaurants’ food safety practices. The FDA’s Food Code is a set of guidelines that restaurants must follow to ensure food safety. These guidelines cover everything from food storage and preparation to employee hygiene.
The FDA’s Food Code is designed to prevent food-borne illnesses, which can be costly for restaurants. According to the CDC, food-borne illness outbreaks cost businesses an average of $75,000 per year.
Complying with the FDA’s Food Code can be challenging, but it’s crucial to preventing food-borne illnesses. The best way to ensure compliance is to have a food safety plan that covers all aspects of the Food Code. You can find template food safety plans on the FDA’s website. Following the FDA’s Food Code can keep your customers safe, and your business running.
Every business must comply with tax laws, and restaurants are no exception. As a restaurant owner, you must pay federal, state, and local taxes on your business’s income.
You will also need to withhold taxes from your employees’ wages and pay them to the government. Failure to withhold and pay taxes can result in penalties, so staying compliant is essential.
The best way to ensure compliance with tax laws is to hire a tax professional. A tax professional can help you understand the taxes you need to pay and make sure you’re withholding the correct amount from your employees’ wages.
Hiring a tax professional might cost you some expenses, but it’s worth it when you can avoid costly penalties.
Establishment Sanitation Laws
A restaurant’s environment must be clean and sanitary to protect customers from food-borne illnesses. To ensure compliance with sanitation laws, you must have a cleaning and sanitation plan. This plan should cover all areas of your restaurant, from the kitchen to the dining room.
Your kitchen is the primary area where food gets prepared, so it must be kept clean and up-to-date. It should also be well-equipped with the necessary stations so you can prepare food safely. Working with an experienced kitchen remodeling contractor ensures that you have a kitchen that meets all sanitation requirements.
The dining room is another critical area to keep clean. All surfaces, including tables and chairs, should be cleaned and sanitized regularly. Customers should also see that the bathrooms are clean and well-stocked.
When you have a well-sanitized restaurant, you can stay on top of health inspections while also gaining customers’ trust.
Several laws exist for restaurant businesses. By becoming aware of these laws, you can steer away from legal conflicts and keep your business running smoothly. The above are only a few examples of regulations you need to be aware of. It is always best to consult with a professional to get tailored information for your business. Doing so can help you avoid hefty penalties and keep your customers safe.