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Human Resources Issues for Restaurants: Why You Can’t Ignore Them

It’s always amazed us at MarathonHR how many restaurants—even fairly large ones—don’t have a Human Resources (HR) department, or even an HR professional on staff who handles payroll, workers’ comp claims, and other issues that restaurants face. They also may not outsource any of their HR functions to another firm. In the most bare-bones situations, the owner does it all.

We have worked with a lot of restaurants and have seen, firsthand, that not having a knowledgeable HR resource backing you can easily cost more than you pay for the HR assistance. An article we found on the website Food Newsfeed, the news site of full-service restaurant industry publication FSR Magazine, addresses many of the HR issues for restaurants that are better left to HR pros. Following is a summary of the article, to give you a “quick take” on the most important issues. If you prefer to review the article, you can read the entire piece here.

The article cites six particular areas, providing helpful information and illustrative examples to support the notion that HR is a critical function for restaurants:

  • Payroll and Reporting
  • Employment Benefits
  • Unemployment Claims
  • Workers’ Compensation Insurance
  • Risk Management
  • HR Compliance

“Many restaurant owners and managers are so busy dealing with costs, competitors, new menu offerings, vendors and pricing that they may overlook some of the HR issues that can make or break their operations,” author Sarah Tupper writes. “Handling [these six issues] properly may help keep you out of trouble and in the black.”

She goes on to discuss issues of concern in all six areas that restaurant owners and managers often overlook, such as:

Payroll and reporting: The complexity of calculating taxes correctly, especially for tipped workers, IRS forms (including I-9s) and data input for new hires.

Unemployment claims: The many ways in which unemployment taxes can increase for reasons that are hard to control without careful HR management, such as excess benefits collected by former employees, including benefits awarded due to wrongful terminations.

Risk management: The importance of managing risk not only by following safety and health best practices but also by training personnel to be careful—and cognizant of hazards that might arise in restaurant. (She also notes that owners should consider all potential liabilities and expenses when weighing the value of outside HR help with risk management. These go beyond rising worker’s comp premium rates to include lost productivity and service capacity due to hurt employees being unable to work.

HR compliance: Ignorance of vital HR compliance issues, from termination methods to interview and hiring practices, that can expose restaurant owners and management, potentially shuttering their restaurants for good.

We hope we have given you some food for thought here. We recommend you read Ms. Tupper’s excellent article to learn even more.

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