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By Michelle Mire
You have a restaurant. You have employees. And maybe you have staffing issues.
If you do, you’re not alone – 30% of restaurant owners claim staffing as one of their main pain points. On top of that, 49% of employees will look for another job after just two payroll mistakes.
From recruiting and hiring to onboarding and retention, employee management is a large umbrella. And within that umbrella, there’s payroll – and communicating your restaurant payroll processes and policies to your new employees.
Once you hire someone, completing a new hire checklist for restaurant employees can help each employee understand the fundamentals of compensation and that workplace compliance is crucial to the onboarding process.
To start, employees should know if they’re:
Per their actual paycheck, employees should also know:
Finally, employees need to know the following labor laws that affect their employment:
Keep reading to find out how to explain these fundamental processes and policies to your new employees, so that your staff starts on the right foot at your restaurant.
Unless you moonlight as a human resources (HR) expert, you may not know how to accurately explain regulated compensation policies to new hires.
We’ve put together an overview of the big talking points that are normally laid out as part of the hiring and onboarding process for restaurants. Although most people are familiar with these concepts, you’ll want to make sure that employees understand the details of these policies and how they affect the ways they’re paid.
Here are the top three general compensation policies you need to explain to your new employees.
In restaurants, a vast majority of the employees are paid hourly. But certain roles like head chef or management can be salaried. Restaurant owners may also opt to issue themselves a salary.
Here are some of the top-level differences between hourly and salaried workers.
The way in which you define full- or part-time work helps set expectations for both the employees and yourself, the employer.
In the United States and Canada, there’s no official standard definition of full- and part-time work – but the general consensus is that part-time is 30 hours per week or less.
Odds are, your hourly staff will be part-time and your salaried staff will be full-time – but this is not guaranteed. Either way, you will need to make sure your new hires understand whether they are considered full- or part-time staff, as this will set expectations for pay, lifestyle, and dedication to their work.
One of the more complex areas of restaurant compensation, tipping is a hotly debated topic, with some restaurants moving away from the practice altogether. If you have tipped employees in your restaurant, your staff need to understand the current rules and regulations for tipping in your region.
We’re all human and everyone is happy to see their paycheck. But not everyone understands how restaurant payroll works or what kind of information their pay stub contains. Explaining these concepts to your new employees can go a long way in preventing confusion and showing your employees that you care about their well-being.
Whether you choose to pay employees weekly, semi-weekly, bi-monthly, or monthly, they need to know which days are paydays.
Certain states have laws on how often employees should be paid. You can pay more often, but the minimum standards have to be met.
In Canada, payroll frequency is governed at a regional level by the provinces and territories. Check to make sure you understand how often you’re required to pay your employees, and make sure they understand why you’re choosing to pay them more often (if you choose to do so).
While there are no laws mandating either option in the United States or Canada, direct deposit is becoming the norm. But, given the diversity of the restaurant workforce, you may need to provide some employees with paper checks. Either way, your onboarding materials will have to explain why you’re requesting:
With every paycheck, it’s a best practice to issue a pay stub (pay statement) detailing the amounts paid during that period, including deductions and contributions. You want to ensure that your employees understand the following:
Here’s an overview of payroll taxes in the United States and Canada.
In the United States, the main law that governs minimum wage, overtime, and other workplace practices at a federal level is the Fair Labor Standards Act (FLSA). In Canada, federal guidelines are set by the Canada Labour Code (Part III – Division IV).
Restaurant owners and managers need to know their responsibilities for following these laws, which, in turn, should also be communicated clearly to employees. Here are five labor laws to explain to your new hires at your restaurant.
Minimum wage sets the baseline for paying hourly workers. It’s illegal to pay any less, and violations are costly. You may have also heard that minimum wage has been rising in 2018, so make sure to check whether or not your state or city has been affected this year.
In Canada, minimum wage is determined by each province or territory.
Another form of workforce protection, overtime is an increased rate of pay once an employee has exceeded what’s normal for a standard 40-hour workweek.
With all the peaks and rush periods in a restaurant workweek, the guidelines for meal and rest breaks should be well-known to everyone in your front and back of house. You probably know how informal behavior can set in when it comes to breaks in the restaurant industry, so make sure you’re explicit about your break policies, for the sake of yourself and for the well being of your employees.
Paid time off includes vacation, sick days, and personal days. In the restaurant industry where you have a lot of hourly and shift work, you want to spell out these standards right from the start.
Public holidays are a unique challenge for restaurants, especially for restaurants that are open on holidays. If your restaurant is open or closed for certain holidays, be sure to communicate these dates in person and in your restaurant employee handbook.
You may also set your own rules for how you schedule your staff during holidays. You may feel you want your star staff on the floor during peak holiday shifts, or you may want to reward your top employees with time off during these periods. Either way, make sure your policy is clear in your employee handbook so there aren’t any nasty surprises come holiday scheduling.
Once you’ve had a chance to familiarize yourself with your own local labor laws, you’ll want to document them in one place for your employees: your employee handbook.
Even if you don’t create a formal handbook, writing things down and outlining policies helps prevent confusion by ensuring that everyone gets the same information.
And don’t forget – proving that you provided your employees with crucial payroll information can also be helpful if you’re ever subject to any legal disputes.
Finally, documenting your payroll policies helps you identify any gaps in understanding – and whether or not you need to get expert advice to fill in the blanks.
Like other small businesses, restaurants are benefiting from the rapid growth and development of restaurant technology. In the compensation sphere, you may be using a sophisticated POS with a staff scheduling integration, which allows you to track your labor costs as well as your staff performance.
Great timesavers for management, these apps are also perks for employees who are increasingly reliant on mobile devices. In other words, who calls anyone to switch shifts anymore?
If you are tracking labor within your POS, you may want to mention to your staff:
Along with the convenience these tools provide, you also need to be specific about your policies on switching shifts, tracking time, reporting tips and other matters.
While this article is a general overview, the following is a list of sources that can help you find more detailed information.
U.S. Department of Labor Fair Labor Standards Act (FLSA)Specific information for restaurants FLSA for Restaurants PDFList of State Labor Departments
Employment and Social Development Canada Labour Program List of Provincial and Territorial Ministries of Labour
IRS Small Business and Self-Employed Tax CenterRestaurant Tax CenterEmployment Taxes (Payroll Taxes)List of State Tax Departments
CRA Small Businesses and Self-Employed Income Page Employer Payroll Responsibilities Alberta Tax and Revenue Administration (TRA)
National Restaurant Association (NRA)Workforce Engagement
Restaurants Canada (formerly CRFA)Industry Issues Employment Standards
As a content creator at Wagepoint, Michelle enjoys simplifying complex payroll topics and generating articles with actionable advice for small businesses and startups. When not at the keyboard, she enjoys chocolate, running, and quality television (not always in that order).
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