FLSA Compliance Checklist for Restaurant Owners

1. Employee Classification

 [ ] Employees vs. Independent Contractors

Servers, cooks, bussers, bartenders and managers are employees, not independent contractors. 

[ ] Exempt vs. Non-Exempt Employees

• Servers, cooks, bussers, bartenders and managers are non-exempt, and must be paid minimum wage and overtime pursuant to local/federal laws
• Managers may be exempt if they:
      – Have management as their primary duty
      – Direct at least 2 full-time employees
      – Have authority over hiring/firing decisions
      – Earn at least $684/week (as of 2024)

2. Minimum Wage

[ ] Pay Maryland minimum wage: $15/hour (check local laws for higher rates). For tipped employees the minimum wage is $3.63

In Montgomery County Maryland on July 1, 2025:

• Large employers (those with 51 or more employees) are required to pay a minimum wage of $17.65 per hour
• Medium sized employers (those with 11 – 50 employees) are required to pay a minimum wage of $16.00 per hour
• Employers with 10 or less employees are required to pay a minimum wage of $15.50 per hour

In other Maryland counties the minimum wage is $15.00 per hour.

[ ] Tipped employees must receive at least $3.63/hour in direct wages, plus tips that make up the difference to $15.00/hour or more.

3. Tips & Tip Pooling

[ ] Tips belong to employees (employers cannot take a share).

[ ] Tip pooling is allowed among traditionally tipped workers.

 [ ] If using a tip credit:

    [ ] Inform employees in writing.

    [ ] Verify that tips plus wages equal at least minimum wage.

4. Overtime

[ ] Pay 1.5x regular rate for hours worked over 40 in a workweek (unless exempt).

[ ] Include non-discretionary bonuses and commissions in overtime calculations.

5. Hours Worked

[ ] Pay for all time worked, including:

   – Pre- and post-shift prep
  – Required meetings or training
  – Waiting time

[ ] Deduct only actual, uninterrupted meal breaks (30+ minutes).

6. Youth Employment Rules

[ ] Minors under 14 years cannot work (except farm work or family business, caddying, teaching on a sailboat, newspaper delivery, wreath making, youth camp counselor/instructor roles, and unpaid volunteer work (with parental consent). )

[ ] Under 16: limited hours, not during school hours.

[ ] Ages 14–17: Must have a work permit. 

Minor 14-15 cannot work:

• more than 3 hours on a school day, 
• cannot work more than 18 hours during any school week, 
• not more than 8 hours on any non-school day
•  cannot work before 7 a.m. or after 7 p.m.
• Cannot work more than 5 consecutive hours without a non-working period of at least 30 minutes. 

7. Recordkeeping

 [ ] Maintain records for at least 3 years, including:

   – Employee personal information
  – Hours worked
  – Wages paid and tip credit used
  – Job titles and pay rates
  – Tip pooling documentation

8. Post Required Notices

 [ ] Display the FLSA “Employee Rights” poster in a visible area.

9. Meal and Rest Breaks

[ ] Minors must have a 30-minute break for every 5 hours worked.

10. Deductions

 [ ] Deductions must not reduce pay below minimum wage.

 [ ] Obtain written consent for any lawful deductions.