Restaurant owners and managers have many compliance concerns. And while you’re protecting your business and employees from sexual harassment, wage and hour and discrimination issues, what may seem like less important regulations can often be mistakenly put on the back burner. But these issues can still lead to costly violations if not addressed.

Proper Form I-9 Handling

Restaurant employers must have on file, and available for inspection, a properly completed Form I-9 for each person employed. An I-9 verifies the employee’s identify and their legal authorization to work in the U.S. I-9 compliance is enforced by U.S. Immigration and Customs Enforcement (ICE). Restaurants are often targeted by ICE for I-9 audits, which can require production of all I-9’s on three days’ notice.

The I-9 is completed at the start of employment. The first section is completed by the employee, who fills out personal information and provides specified documents, such as drivers licenses or passports, to attest to their identity and right to work the U.S. The second section must be completed by the employer no later than the third day of employment and involves reviewing and verifying the information provided using the E-Verify system. In addition to maintaining I-9’s for all current employees, a restaurant must also maintain I-9’s for former employees for at least three years from hire or one year after employment ends (whichever is longer).

Restaurants, especially smaller ones, frequently are in violation because they simply do not know about their mandatory I-9 obligations. Other violations range from carelessly completed forms or inadequate documentation all the way to willful violations involving knowingly hiring undocumented workers not legally authorized to work in this country. Violations can be costly. As of 2022, the maximum penalty for each I-9 paperwork violation is $2,507. For recruiting, referral or rehiring violations, the penalty for a first offense can be as high as $5,016, and for a third offense, as high as $25,076.

Many I-9 compliance violations can be avoided by properly training managers or HR staff to properly administer I-9, steer clear of common mistakes in filling out the form, and watch out for fraudulent or unauthorized documentation. If your restaurant is not currently in compliance, you should retain legal counsel specializing in this area, and if you’re not sure, an internal I-9 audit should be conducted.

Limits on Background Checks

Like many employers, restaurants often conduct background checks on applicants to determine if they have a criminal history or to find out other information, such as credit reports or driving records. However, such background checks are governed by the federal Fair Credit Reporting Act (FCRA). Proper compliance with the FCRA is often complicated and confusing, and with multiple steps and notices that must be provided in advance, it is very easy to get it wrong. Liability can include statutory damages, compensatory damages, punitive damages and the attorneys’ fees of the applicant or employee who brings suits. Many states now also have their own laws limiting requests for information on applicants’ criminal history, such as “ban the box” statutes, which prohibit asking for such information in job application forms. Any restaurant using background checks should seek advice as to whether they are in compliance with the FCRA or similar state laws.

Posting Mandatory Employment Law Notices

Another easily addressed but frequently overlooked employment law kitchen fire is the failure to post mandatory employment law notices in your restaurant’s break room or in any other conspicuous place where employees can see them. These posters outline employee rights under federal laws such as the FLSA, Title VII, the Family Medical Leave Act (FMLA), the Employee Polygraph Protection Act (EPPA) and the Occupational Safety and Health Act (OSHA).

Fines for failing to have these posters displayed can range from $189 to $23,011, depending on the violation. In addition, when a DOL investigator comes to your restaurant, one of the first things they usually ask to see is your posters. If you don’t have them, it’s a bad way to start the investigation. Luckily, many of these posters can be printed off the internet for free from the DOL’s website and are also available from commercial companies.