Labor Law and Wage and Hour Trends for Restaurant Operators in 2025

When the decade has ended and monikers have been assigned, it is safe to say that no one will refer to it as the “Roaring 2020s.”  During the first half of the 2020s, restaurants have faced and weathered a litany of defining moments: COVID, supply chain and logistical nightmares, political movements, diversity/inclusion initiatives, changing customer habits and expectations, and legislative initiatives concerning the workplace, all of which have played out in kitchens and dining rooms across the country. The second Trump administration, which commences January 20, 2025, represents another inflection point.  The incoming administration’s statements to date indicate that the industry can expect fundamental changes that will impact the second half of this decade in transformative ways.  

Predicting the future is surely a fool’s errand.  However, there are a number of workplace trends that restaurant owners and operators can expect and for which they should now plan.  

Labor Law

While we have come to expect that traditional labor law will oscillate dramatically between a Democratic and Republican-controlled National Labor Relations Board (NLRB or Board), the shift between Trump to Biden and back to Trump can cause neck injuries.  The Biden Board has been particularly “activist,” largely led by General Counsel Jennifer Abruzzo.  Through a series of legal memoranda, she has advocated for expansive interpretations of the National Labor Relations Act that along with NLRB rulings have tilted the playing field against employers.  

We can anticipate that under a new general counsel and with pending changes to the Board itself, the NLRB will quickly begin to roll back Biden administrative policies including those that made it easier for unions to organize and gave the NLRB the power to order collective bargaining without an election when there is even a single unfair labor practice alleged during a union campaign. In addition, we can expect that a newly constituted Trump Board will overrule prior precedent that consider non-disparagement provisions in severance agreements to be per se unlawful if the terms could possibly be construed as interfering with employees’ ability to exercise their rights.  It is also expected that the Board will be less friendly to union organizing outside of the traditional secret ballot election process and may try to curb the use of neutrality agreements as a union organizing tactic.  Finally, it is anticipated that a Trump Board will return to the more employer-friendly test for determining independent contractor status of individuals.

What does all this mean for restaurants?  While the Trump administration will hit the switch and try and flip the NLRB back to more pro-employer policies, it will not squelch a more invigorated, better organized and funded labor movement, which has started to make inroads in the restaurant industry, particularly in quick service models. Employers must continue to pay attention to granular issues affecting their employees and ensure management, human resources and ownership are all listening to employees, addressing concerns as they arise and taking appropriate action.

Wage and Hour

Wage and hour issues have continued to confuse and confound restaurant operations for almost 20 years.  Class/collective action lawsuits concerning tips, service charges, meal breaks, uniforms, overtime, pay frequency and exemption status continue to be filed across the country, unabated.  While a new Trump administration will likely result in significant policy changes at the federal level — particularly concerning minimum wage, independent contractor and joint employer status, and overtime exemptions — this is but a small drop in most operators’ buckets.  

As Generation Z continues to make its presence known in workplaces, it is becoming clear that it is a generation whose members know their rights — or think they know their rights — and they are holding employers more accountable to knowing the law as well.

Many states and localities have enacted their own minimum wage standards and laws concerning all these issues.  California alone has more than 30 different wage rates in communities such as El Cerrito, Menlo Park, Novato, San Diego, West Hollywood and Richmond. Colorado has different standards in Boulder, Boulder County and Denver. Restaurants operating with multiple units will need to be more vigilant than ever to adapt their payroll practices and policies to their specific units.

Employee handbooks need to be properly drafted and adapted by locality. Further, POS and HRIS systems must be able to handle different rates and account for employees who may work in two different “jurisdictions” in the same week.  

As Generation Z continues to make its presence known in workplaces, it is becoming clear that it is a generation whose members know their rights — or think they know their rights — and they are holding employers more accountable to knowing the law as well. Restaurants must ensure that they are training their managers and supervisors to understand wage and hour law, including fair work week rules, predictive scheduling mandates, overtime requirements, and meal and rest break rules — or even if such breaks can be waived.

Managers and supervisors are on the front line every day. It is critical for them to know how to respond to employee questions, staff properly and understand when to raise an issue to human resources or ownership.  It is the “simple” day-to-day decisions such as scheduling, approving overtime and making payroll adjustments for employees who fail to clock out that can lead to multimillion-dollar wage and hour liability.  

Time Off 

No issue is more fraught for restaurant operators than managing a diverse workforce with respect to leaves of absences, disability accommodations and leave entitlements.  No longer can an employer simply provide vacation, personal and sick days and track how many days to which an employee is entitled.  Managing time off is a minefield with federal, state and local laws all providing varying amounts of paid and unpaid time off.  For operators with locations in multiple locations, the challenge can be overwhelming.  For instance, a small restaurant group with only a handful of locations in New York’s Westchester County, New York City, New Jersey and Connecticut — all within 50 miles of each other — must balance completely different paid leave laws in each state.  And the employer had better understand where the borders are, because New York City has separate paid leave requirements.  Moreover, an employer needs to understand whether state disability benefits apply in certain circumstances, as well as whether an employee can or cannot apply other paid time off accruals to certain leagues.  The issues become even more complicated if an employee regularly works at multiple locations in different jurisdictions. 

What is an employer to do? As state and local governments become more and more activist with respect to employee rights, the risk of getting something wrong rises precipitously.  First, restaurants need to have labor law attorneys well versed in restaurant operations on speed dial.  For better or worse, they are essential to ensuring managers, supervisors, administrative staff and human resources teams understand all the nuances.  Second, handbooks and company policies need to comply jurisdiction by jurisdiction.  Posters and required notices that must beprovided to employees vary depending on jurisdiction.  Fortunately, HRIS, POS and timekeeping software make it easier to update policies and push information out to employees.  Finally, training must be a regular part of operations.  Industry turnover can be high; systems must be in place to make sure the right information is being relied upon by management and employees.   

This will certainly be another active year for restaurant operations.  Operators need to make sure their infrastructure ensures that legal compliance is making its way to all the right people.  Partnering with effective labor counsel and human resources professionals will prove a necessary element for a successful 2025.