What are the most common HR mistakes restaurants make?
The most costly restaurant HR mistakes are letting managers share tips, skipping the tip-credit shortfall check, assuming no overtime applies, paying final wages late, treating I-9s as a formality, scheduling minors past their limits, keeping an outdated or unsigned handbook, and missing headcount thresholds. Most come from nobody owning the check at the right moment.
Food service had more wage-and-hour violations than any other industry the U.S. Department of Labor tracks in fiscal 2025: 4,088 compliance actions and about $42.7 million in back wages for more than 30,000 workers. Most of that comes from routine mistakes made again and again, not from one bad decision.
These are the mistakes that most often cost restaurants money, and how to avoid each one. Massachusetts details are included where the state rule differs.
How this list was put together
- Mistakes tied to a specific legal rule or a measurable cost, with the source linked.
- Focused on independent restaurants and small groups.
- Reference only, not legal advice.
1.Letting managers into the tip pool
Under Massachusetts law, only wait staff, service employees and service bartenders can share tips. Anyone with managerial responsibility on that shift is excluded, and so are owners.
Why it matters: a manager in the pool means repaying every pooled tip they took, with interest.
Source: Mass.gov: M.G.L. c.149 §152A
2.Skipping the tip-credit shortfall check
Paying the $6.75 service rate is allowed only if tips bring the employee up to the $15.00 minimum. When a slow week falls short, the employer owes the difference.
Why it matters: if nobody checks, a shortfall on a slow week becomes unpaid wages.
Source: Mass.gov: Pay and recordkeeping
3.Assuming there is no overtime
Massachusetts exempts restaurants from state overtime, but federal law still requires time and a half after 40 hours in a workweek.
Why it matters: the state exemption leads some owners to think no overtime rule applies. The federal one does.
4.Paying final wages late
A fired or laid-off employee must be paid in full on their last day. Waiting for the next payroll run is too late.
Why it matters: terminations often happen mid-shift, when no final check is ready.
Source: Mass.gov: Pay and recordkeeping
5.Treating I-9s as a formality
Taking photocopies without examining the originals, finishing Section 2 late, or letting the file go missing. The employer must examine the documents itself.
Why it matters: I-9 errors are easy for an inspector to count, and they add up across a high-turnover workforce.
Source: USCIS: I-9 Central
6.Scheduling minors past their limits
Workers aged 14 and 15 have tight hour and time-of-day limits. Workers aged 16 and 17 can work until midnight at restaurants only before a non-school day. After 8pm, an adult supervisor must be on site.
Why it matters: one late close on a school night can be a violation.
Source: Mass.gov: Minors' work hours
7.A handbook nobody has updated or signed
An old handbook may still describe rules that have changed, such as Sunday premium pay, which Massachusetts ended in 2023. If you have no signed acknowledgements, you cannot show staff ever received it.
Why it matters: an out-of-date handbook can do more harm than having none. See the handbook guide.
8.Missing the headcount thresholds
Several Massachusetts rules change with employee count: paid sick time at 11, PFML contribution rules and pay transparency at 25. A restaurant that hires heavily for the season can cross a threshold without noticing.
Why it matters: you are held to the rules for your actual headcount, whether or not anyone tracked it.
What they have in common
Almost every mistake here happens because nobody was responsible for checking it at the right moment. Give someone that job, and back it with a payroll approval checklist and an HR owner checklist. That catches most of these mistakes before they cost anything.
Where to go next
- Key Massachusetts restaurant labor laws: the rules behind these mistakes
- Service scope: which of these BOHO administers
- Book a fit call: twenty minutes on where your paperwork stalls
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Your restaurant remains the employer of record and approves payroll and employment decisions. BOHO is not a PEO, a staffing agency, or legal counsel.