Restaurant Operators, do You Know Your Federal Regulators?


Restaurant operations are regulated by a long list of state and federal agencies. This article addresses a handful of the federal regulators and investigators that restaurant managers are likely to come into contact with over time. Every restaurant manager should be aware of these agencies’ basic regulatory authority and on-site inspection rights so they will know exactly what to do if and when a federal agent and/or inspector appears.

The United States Department of Labor (“DOL”)

The DOL is comprised of more than 20 different federal agencies that regulate and enforce all aspects of federal labor and employment law. These agencies have jurisdiction over any business affecting interstate commerce and/or any business that grosses over $500,000 annually. The DOL has the power in investigate to determine whether a business within its jurisdiction is in compliance with federal labor laws.

One of the DOL divisions that will be most familiar to restauranteurs is the Equal Opportunity Employment Commission (the “EEOC”). Title VII of the Civil Rights Act of 1964 established the EEOC which administers anti-discrimination laws in the work place. The EEOC enforces federal laws against discrimination based upon race, religion, sex, national origin, age, and disabilities. The EEOC has jurisdiction over all employers with 15 or more employees. If one of your employees files a charge with the EEOC, the agency has the power to investigate, to subpoena documents, and to an on-site inspection. If the EEOC finds that an employer has violated of one of the anti-discrimination laws, it can sue the employer in federal court and/or issue a Right to Sue Letter giving the employee the right to file suit in federal court for the infraction.

United States Department of Homeland Security (“DHS”)

United States Citizenship and Immigration Services (“CIS”) is the division of DHS that regulates employee visa petitions, issues employment authorization documents, and administers and adjudicates all immigration benefit matters.

Simply put, CIS enforces the nation’s immigration laws, including the Immigration Reform and Control Act, the Immigration Act, and the Illegal Immigration Reform and Immigrant Responsibility Act. Restaurant managers should be aware that officials from DHS have the authority to inspect an employer’s Form I-9 files (Employment Eligibility Verifications) as long as the agency gives management at least three days’ notice prior to inspection. However, DHS can use subpoenas and/or warrants to obtain a restaurant’s I-9s without giving the owner/operator three days’ notice.

The U.S. Department of Justice (“DOJ”)
Alcohol, Tobacco, Firearms and Explosives (“ATF”) is the law enforcement arm of the United States Department of Justice that regulates the sale and distribution of alcohol for wholesalers and retailers. Not only is the ATF charged with regulating the collection of federal taxes on alcohol sales, they also police the making, distilling, and selling of alcoholic beverages by would-be bootleggers. The ATF also enforces the federal laws dealing with fraud and illegal trade practices in the sales and distribution of alcoholic beverages.
The alphabet soup of federal agencies can be overwhelming to restaurant managers and operators facing a fast-paced environment fraught with labor issues, food and liquor sourcing and inventory challenges, and daily customer relations concerns. The key is training and preparation so that your manager will know what to do the moment a federal investigator or agent appears to best protect the restaurant’s interests.

De Cardenas Law Group is here to assist entrepreneurs and C-Suite executives in the development of your small business, partnership, or corporation. Contact us and to learn more about the services we can provide for you and your business.

(image courtesy of Jason Leung)

#restaurants #regulators #businesslaw #foodbusiness

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