Top 6 HR Restaurant Issues

Owning and managing restaurants comes with many responsibilities such as handling costs, knowing competitors, creating new menu offerings, narrowing down vendors, pricing, and the list goes on. This can make it easy to overlook some of the HR related matters that can lead to overall successful operations. It’s important to be aware of HR issues and the laws that pertain to your business. Knowing how to handle issues as they come up will help your restaurant be a success.

Top six issues related to human resources are listed below:

Payroll and Reporting

Paying a large number of hourly employees can be very time-consuming and a primarily tipped workforce only furthers the level of difficulty. Then there is calculating taxes for all appropriate government levels, particularly for restaurants with multi-state operations, making payroll more complicated. If that wasn’t enough, you’ll need to include adding required reports such as, 940s, 941s, and annual W2s, as well as the collection and input of data from new hires, including W4s and I9s. Costly errors can occur from misplaced quarterly tax form submissions or neglecting to receive completed I9s.

Employee Benefits

The Introduction of the Affordable Care Act(ACA) brought issues around employee benefits to the forefront. An increasing number of employees began evaluating prospective employers based off their benefit offerings. For restaurants not previously offering healthcare benefits, ACA introduced the need to decide on questions such as whether to sponsor a health plan, how to evaluate plan options, how to avoid the employer mandate tax penalty, how to meet reporting requirements, and how to fund benefits. Once a restaurant decides on a plan the options need to be communicated to the employees, as well.

Unemployment Claims

Taking into consideration the annual nationwide restaurant turnover rate of 73%, unemployment claims can be a huge burden for an already-busy restaurant administrative staff. Although unemployment tax rates reflect the size of your organization and what you have paid into the system, they are also based on the amount of benefits collected by former employees. Avoiding wrongful terminations can help reduce the amount of benefits collected and maintain your lower rates. Though tax rates are part of the cost equation, you also have to factor in the time you spend on reviewing claims, discussing them, and negotiating with the review staff. Ensuring an effective way to track employee write ups and supporting documentation could save time and money when fighting claims.

Workers’ Compensation Insurance

The good news is that you can have an impact on your rates. Premium rates, while regulated by each state, are based on your loss history and safety performance over a three-year period. Two ways to reduce your rates; 1) shop for the best rates, taking advantage of group buying power where possible and 2) reduce loss by creating a safer work environment.

Risk Management

 Anyone associated with a restaurant has seen various types of injuries from slips & falls, cuts, improper lifting, and many others because of a rushed environment. These injuries can lead to worker’s comp claims, higher premiums, and not to mention the pain experienced by the employee and loss of productivity in the restaurant. Two easy solutions for this problem could be; 1) to identify the causes for your most common (and most costly) injuries and 2) institute a process of ongoing communication, training, and coaching employees, to make safe operating practices a part of their everyday job. Risk management specialists can be of great assistance in this process.

HR Compliance

Important HR compliance practices could be slipping through the cracks, simply because you are unaware or don’t have the time to properly handle issues. Unfortunately, ignorance of regulations nor a lack of time serves as an adequate excuse for not staying compliant. If you terminate someone wrongfully, if your corrective actions aren’t effective, if your employment verification processes aren’t complete, if job classifications aren’t aligned with wage and hour laws—and so on it can become a problem. With the increase of regulations, which will only pick up speed as they constantly change from year to year, it makes this a critical piece of the puzzle. Owner/Operators must now pay close attention to compliance in order to survive in this tough industry.