U.S. Department of Labor

Wage and Hour Division

 (Revised December 2016)

Fact Sheet #2: Restaurants and Fast Food Establishments Under the Fair

Labor Standards Act (FLSA)

This fact sheet provides general information concerning the application of the FLSA to employees of

restaurants and fast food establishments.

Characteristics

The restaurant/fast food industry includes establishments which are primarily engaged in selling and serving to

purchasers prepared food and beverages for consumption on or off the premises.

Coverage

Restaurants/fast food businesses with annual gross sales from one or more establishments that total at least

$500,000 are subject to the FLSA. Also, any person who works on or otherwise handles goods that are moving

in interstate commerce is individually subject to the minimum wage and overtime protection of the FLSA. For

example, a waitress or cashier who handles a credit card transaction would likely be subject to the Act.

Requirements

Minimum Wage: Covered non-exempt workers are entitled to a federal minimum wage of not less

than $7.25 per hour effective July 24, 2009. Wages are due on the regular payday for the pay period

covered. Deductions made from wages for items such as cash shortages, required uniforms, or

customer walk-outs are illegal if the deduction reduces the employee's wages below the minimum

wage or cuts into overtime pay. Deductions made for items other than board, lodging, or other recognized

facilities normally cannot be made in an overtime workweek. Tips may be considered as part of wages, but the

employer must pay not less than $2.13 an hour in direct wages and make sure that the amount of tips received is

enough to meet the remainder of the minimum wage.

Food Credit: The employer may take credit for food which is provided at cost. This typically is an hourly

deduction from an employee's pay. However, the employer cannot take credit for discounts given employees on

food (menu) prices.

Tips: Tipped employees are those who customarily and regularly receive more than $30 a month in tips.

Employees must be informed of the provisions of FLSA section 3(m) in advance if the employer elects to use 

the tip credit. Also, employees must retain all of their tips, except to the extent that they participate in a valid

tip pooling or sharing arrangement.

Overtime: Overtime must be paid at a rate of at least one and one-half times the employee's regular rate of pay

for each hour worked in excess of 40 hours per week. In determining the regular rate for a tipped employee, all 

components of the employee’s wages must be considered (i.e., cash, board, lodging, facilities, and tip credit).

FS 2
Youth Minimum Wage: The 1996 Amendments to the FLSA allow employers to pay a youth minimum wage of

not less than $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar

days after initial employment by their employer. The law contains certain protections for employees that

prohibit employers from displacing any employee in order to hire someone at the youth minimum wage.

Youth Employment

Youths 14 and 15 years old may work outside school hours in various non-hazardous jobs only under the

following conditions: no more than 3 hours on a school day, 18 hours in a school week, 8 hours on a non-school 

day, or 40 hours in a non-school week. Also, work may not begin before 7 a.m., nor end after 7 p.m., except

from June 1 through Labor Day, when evening hours are extended to 9 p.m. Permitted occupations for 14 and

15 year old employees include those such as cashier, office/clerical work, bagging orders, cleanup work, handcleaning vegetables, etc. Cooking and baking cannot generally be performed by minors under age 16.

Youths 16 and 17 years old may perform any non-hazardous job, for unlimited hours. Examples of equipment

declared hazardous in restaurants include power-driven meat processing machines (saws, patty forming

machines, grinding, chopping or slicing machines), commercial mixers, and certain power-driven bakery

machines. Employees under 18 are not permitted to operate, feed, set-up, adjust, repair or clean such machines.

Generally, no employee under 18 years of age may drive or serve as an outside-helper on a motor vehicle on a

public road; but 17-year-olds who meet certain specific requirements may drive automobiles and trucks that do

not exceed 6,000 pounds gross vehicle weight for limited amounts of time as part of their job. Such minors are,

however, prohibited from making time sensitive deliveries (such as pizza deliveries or other trips where time is

of essence) and from driving at night.

Typical Problems

If uniforms are required by the employer the cost of the uniform is considered to be a business expense of the

employer. If the employer requires the employee to bear the cost, such cost may not reduce the employee's

wages below the minimum wage or cut into overtime compensation. When an employer claims an FLSA 3(m) 

tip credit, the tipped employee is considered to have been paid only the minimum wage for all non-overtime 

hours worked in a tipped occupation and the employer may not take deductions for walkouts, cash register 

shortages, breakage, cost of uniforms, etc., because any such deduction would reduce the tipped employee’s 

wages below the minimum wage.

Exemptions from Overtime: Section 13(a)(1) of the FLSA provides an exemption from FLSA monetary

requirements for an employee employed in a bona fide executive, administrative or professional capacity or as

an outside salesperson. An employee will qualify for exemption if all pertinent tests relating to duties,

responsibilities and salary, as set forth in Regulations, 29 CFR Part 541, are met. The salary and duties tests for

the exemptions are fully described in Regulations Part 541.

Where to Obtain Additional Information

For additional information, visit our Wage and Hour Division Website: http://www.wagehour.dol.gov

and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-

4USWAGE (1-866-487-9243).

This publication is for general information and is not to be considered in the same light as official statements of

position contained in the regulations.

U.S. Department of Labor 1-866-4-USWAGE

Frances Perkins Building TTY: 1-866-487-9243

200 Constitution Avenue, NW Contact Us

Washington, DC 20210