RESTAURANT-SPECIFIC EMPLOYMENT ARRANGEMENTS
Contact Neufeld Legal for restaurant/bar legal matters at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com
The restaurant sector might operate under the same foundational legislation as other businesses, the applicable provincial employment standards legislation, but it is subject to a distinct set of special rules, exemptions, and industry-specific realities that fundamentally differentiate its employment arrangements. While other business environments might focus primarily on consistent hours and salary, the restaurant industry is characterized by high turnover, non-traditional hours, and unique compensation structures built around gratuities. These elements necessitate a far more specialized and vigilant approach to compliance for restaurant owners than for employers in other sectors.
One of the most significant distinctions lies in employee compensation, particularly concerning tips and minimum wage. Historically, many provinces recognized a separate, lower minimum wage for liquor servers, acknowledging that tips formed a substantial part of their income. Though this rate has been eliminated in recent years to align with the general minimum wage, the legal framework around tips and gratuities remains specific and highly regulated. Unlike most businesses, restaurant employers are expressly forbidden from withholding or deducting tips, even to cover costs like spills or breakages, a prohibition recently reinforced in Ontario by legislation that also bans deductions for "dine and dash" or stolen property incidents. For any business, tips are an added element of complexity, but for restaurants, they are central to the employment model and require strict, posted policies on tip pooling and transparent payment methods.
The operational demands of running a business that frequently serves the public during evenings, weekends, and statutory holidays lead to special rules regarding hours of work and overtime. While the general rule for overtime in a province's employment standards legislation may specify a rate increase based on exceeding a prescribed number of hours in a week, the hospitality sector, which includes restaurants, certain provinces have granted specific exemptions to restaurant employers (i.e., in Ontario, the ability to apply for overtime averaging agreements, allow for greater flexibility in scheduling that is essential for peak seasons or special events). Moreover, in certain provinces, restaurant and food service workers are one of the specific classes of employees who can be required to work on a statutory holiday, provided they are compensated with public holiday pay plus premium pay, or regular pay plus an alternate paid day off. This contrasts sharply with general retail or office settings where employees usually have a greater right to refuse work on such days.
Finally, the typical employment arrangement in a restaurant setting often lacks the formal structure common in other businesses. Many restaurant positions, from dishwashers to servers, are hired quickly to fill immediate operational needs, often without written employment contracts. While this may be the industry norm, it exposes the business to greater risk, particularly concerning common law reasonable notice for termination. As a result, legal guidance often emphasizes that restaurants, more than many other businesses, stand to benefit significantly from implementing written contracts to clearly define terms, specify statutory minimum notice periods, and establish flexibility in job duties, a necessity given the fluid nature of restaurant roles that may require a manager to occasionally cover a line cook or a server position.
For knowledgeable and experienced legal representation with respect to employment arrangement in the restaurant sector, together with a raft of legal intricacies and dilemmas that may arise, contact restaurant lawyer Christopher Neufeld at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or Chris@NeufeldLegal.com.
