Traditionally, the New Year marks a time of change.
When the calendars flipped to 2018, the restaurant industry found itself immersed in change. Employee-protecting labor legislations came into effect (Fair Work Week legislation and Auto-scheduling), and 18 U.S. states, including California and New York, raised their minimum wages. Together, these changes have made labor law compliance a bigger challenge than ever before.
Among the states that have increased—or soon will increase—from the federal minimum wage of $7.25/hour, Colorado leads with the highest increase at 9.7%, and Hawaii is in second place with an increase of 9.2%. New York is phasing in a $15/hour minimum wage, and California, the most populated state in the U.S., has a new minimum of $11/hour, with some of its localities raising wages even higher.
Why Labor Law Compliance is Getting More Difficult
North of the 49th parallel, Ontario, Canada, followed suit. Through the province’s Fair Workplaces, Better Jobs Act, they instituted a 20.7% wage increase that brought the minimum wage to $14/hour, which will increase by another dollar in January 2019. The advent of 2018 also ushered in a number of changes to Ontario’s employment standards, including new rules governing employee scheduling and pay for overtime work. For an overview of the changes throughout Ontario, click here.
What Does This Mean for Restaurants?
While a pay raise and legislated attention to work-life balance may be presented as a blessing to most employees, the impact of the changes is causing restaurateurs to recalculate and regroup.
According to new research, the restaurant industry may face a challenging adjustment, since restaurants operate on profit margins so lean that they could be left struggling to cover the labor cost increases.
For example, take sandwich giant Subway. The extra-lean margins they were known for proved to be too thin to maintain and ultimately forced them to close over a thousand locations from 2016 to 2017. California and Washington Subway franchisees have shared that minimum wage increases, paired with the demand for deep discounts on menu items, have caused worrisome damage to their margins and labor budgets.
Industry-wide changes like the ones coming to light in 2018 require restaurateurs to be nimble and proactive with restaurant budgeting and scheduling. Preparedness will be what keeps restaurants afloat and compliant, and it’ll also be what keeps labor costs under control and profits—and ultimately businesses—intact.
7shifts Helps with Labor Law Compliance
Luckily, restaurant owners and managers can call upon a number of tech solutions to take care of the heavy lifting, and 7shifts is proud to be one of them. In addition to making smart scheduling a breeze, 7shifts is also a way to help your restaurant save 1–3% on labor costs by ensuring that scheduling coverage is optimized and in proportion with your budget and sales.
Imagine what an extra 3% of profit could do for your business!
To help restaurateurs make the most of every dollar, and to take the work out of labor cost control and compliance, 7shifts offers Overtime Alerts and Custom Breaks & Break Enforcement.
Overtime Alerts
Overtime adds up quickly. When employees start working hours beyond the 40-hour workweek, the time-and-a-half minimum payout can gouge your labor budget. With overtime, the key is prevention, and that’s where 7shifts comes in.
Overtime Alerts control costs by alerting managers (via push notification on the free 7shifts mobile apps for iOS and Android) when either of the following events occur:
- when an employee is about to go into overtime hours
- when an employee has entered actual overtime
To simplify scheduling-related communication, when an employee works at multiple locations, each location’s manager will be immediately alerted to the employee’s overtime status.
Restaurant managers can customize the Alert Buffer—how much of a “heads-up” period is given before employees reach overtime—to suit their restaurant’s needs.
By preventing overtime hours, you’ll keep your labor costs under control and avoid overworking your employees. The bonus here is that you’ll also stay compliant with the auto-scheduling practice of respecting minimum hours between shifts—something that may otherwise be difficult monitor when you have employees working at multiple locations.
7shifts’ overtime alert function takes the expensive guesswork out of scheduling and keeps your team and your labor budget in fine form by ensuring that time is scheduled wisely. To read more about how Overtime Alerts work in 7shifts, click here.
Custom Breaks & Break Enforcement
As any restaurant owner, manager, or employee can attest, there is a *lot *going on in a restaurant.
Shifts can go by in a bustling blur, leaving you wondering where the hours went as you reflect on your evening and massage your aching feet. “Did I even take a break tonight?” you wonder.
Wonder no longer. 7shifts has two features that help managers ensure that employees take proper, scheduled breaks—paid or unpaid—in accordance with the Fair Labor Standards Act (FLSA). Restaurants in states with labor laws regarding paid break periods —California, Colorado, Kentucky, Minnesota, Nevada, Vermont, and Washington—will find the break features helpful when building and enforcing compliant schedules.
The break features are created for restaurants that use 7punches, a free app that integrates with 7shifts and lets restaurateurs manage scheduling, payroll, and attendance, and also serves as a time clock for staff to punch in and out for shifts on.
With Custom Breaks, certain breaks can be designated as paid or unpaid. The FLSA outlines that meal breaks (usually ~30 minutes) generally do not need to be paid breaks, but that shorter breaks (which may range from 10 to 20 minutes) are to be counted as hours worked, and are therefore paid. 7shifts users have the option of selecting multiple break types on a shift-by-shift basis, which streamlines scheduling.
When you build breaks into your schedule, you also have the option to enable Break Enforcement. The feature allows you to choose whether a break is mandatory for an employee to take. You can also set limits to prevent early returns from breaks to ensure that everyone gets a chance to take a proper rest period—a move that will directly contribute to employee wellness and, ultimately, employee efficiency. To learn more about how Custom Breaks and Break Enforcement work in 7shifts, click here.
Times may be changing, but you’re not alone. With tech solutions you can depend upon to handle hardlined regulations, you’ll streamline your day-to-day tasks and be ready to make agile, informed business decisions. Armed with data and smart software, you’ll be able to react, recalibrate, and easily adapt to the changing landscape of labor legislature and compliance.
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