(a) As amended in 1966, the Act, in section 13(b) (8), exempts from
its overtime pay provisions ``any employee employed by an establishment
which is a * * * restaurant''. The term restaurant as used in section
13(b)(8) of the Act means an establishment which is primarily engaged in
selling and serving to purchasers at retail prepared food and beverages
for immediate consumption on the premises. This includes such
establishments commonly known as lunch counters, refreshment stands,
cafes, cafeterias, coffee shops, diners, dining rooms, lunch rooms, or
tea rooms. The term ``restaurant'' does not include drinking
establishments, such as bars or cocktail lounges, whose sales of
alcoholic beverages exceed the receipts from sales of prepared foods and
nonalcoholic beverages. Certain food or beverage service employees of
establishments such as bars and cocktail lounges, however, may be exempt
under section 13(b)(18).
(b) Not all places where food is served for immediate consumption on
the premises are ``restaurant'' establishments within the meaning of
section 13(b)(8). Such service is sometimes provided as an incidental
activity of an establishment of another kind, rather than by an
establishment possessing the physical and functional characteristics of
a separate place of business engaged in restaurant operations. In such
event, the establishment providing the meal service is not an
establishment ``which is'' a restaurant as section 13(b)(8) requires for
exemption. Further, not every place which serves meals, even if it
should qualify as a separate food service establishment, possesses the
characteristics of a ``restaurant.'' The meals served by restaurants are
characteristically priced, offered, ordered, and served for consumption
by and paid for by the customer on an individual meal basis. A
restaurant functions principally, and not merely incidentally, to meet
the immediate needs and desires of the individual customer for
refreshment at the particular time that he visits the establishment for
the purpose. A separate transaction to accommodate these needs and
desires takes place on the occasion of each such visit. A
``restaurant'', therefore, is to be distinguished from an establishment
offering meal service on a boarding or term basis or providing such
service only as an incident to the operation of an enterprise of another
kind and primarily to meet institutional needs for continuing meal
service to persons whose continued presence is required for such
operation. Accordingly, a boarding house is not a ``restaurant'' within
the meaning of section 13(b)(8), nor are the dining facilities of a
boarding school, college or university which serve its students and
faculty, nor are the luncheon facilities provided for private and public
day school students, nor are other institutional food service facilities
providing long-term meal service to stable groups of individuals as an
incident to institutional operations in a manner wholly dissimilar to
the typical transactions between a restaurant and its customers.
