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Left in the Cold – When Restaurants Close Without Warning

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The restaurant industry has been through some significant challenges since the pandemic shuttered businesses in 2020. While some have weathered the storms and are back to business as usual, others have struggled to stay afloat. With federal resources such as PPP loans no longer funding struggling businesses, we’ve seen a number of new restaurants come and go in the blink of an eye, and even some long-standing pillars have shuttered their doors.

While the community as a whole feels the loss each time a beloved diner, a friendly watering hole, or an exciting new concept closes up shop, it’s the workers who get hit the hardest. In an industry where many workers make less than minimum wage because they rely on tips, showing up for a shift (and expecting to go home with money) only to find a Notice of Permanent Closure on the door can feel like a sucker punch. There are no big checks waiting at the end of the pay period, unemployment is often unavailable or takes weeks to receive (for example, if a waitress is also a student, she may not qualify for unemployment), and it can take time to line up new employment in an already hard-hit industry. To add insult to injury, we have even seen restaurants keep their employees’ final paychecks and tip money.

Employees facing these difficult circumstances should be aware of their legal rights regarding wages and their final pay. In addition to federal laws requiring the payment of minimum wages, Ohio’s Constitution guarantees employees’ rights to minimum wages and allows an employee to recover damages calculated at an additional two times the amount of back wages owed in the case of a violation.  Ohio’s “Prompt Pay Act” requires employers to pay every employee semi-monthly. This means that by the end of a given month, every employee must be paid for the wages they earned during the first half of the month and by the 15th day of the following month the employees must be paid for the last half of the month. Employers who fail to pay employees according to the timeline set by law can be liable for liquidated damages and either 6% interest or $200 (whichever is greater).

Employees are often left scrambling in these situations, but they are not without legal protections. If you have questions about your employment situation, contact us for a free consultation.

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ADVERTISING ONLY: The information on this blog is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Past results obtained by Biller & Kimble, LLC are no guarantee of future results. Each case or matter is different and must be judged on its own merits.