Financial Health For Restaurants and Related Businesses
The Hidden Costs of Employee Mgt
by Long time HR Exec Charles Argenbright and the Professional Employer Organization PEO
SEE Bio below
Contact [email protected] to analyze the gaps in YOUR employee mgt.
Turnover is very high and a result of that is the SUTA rate increase.
State unemployment taxes. You can be as low as about .20 cents per 100 dollars of payroll and that is collected in this state on just the first $ 7000. Of earned income. Then it caps. Then you start over every Jan 1.
A new business will start at $ 2.70. If you are at 2.70 then you pay $ 189.00 a year on each employee. If you go to 5.40 you pay $ 378.00. Many restaurants here went to 5.40 and are still there.
Say that you have a staff of 35 employees, You probably have turnover that has you sending out 80 W-2’s at the year end. That is over $ 30,000 in unemployment taxes… Lot of dough. They don’t fight these claims because they are too busy. A PEO fights them for the owner. Also with a PEO you fall under their rated and if you have high turnover it effects their rate and not yours.
Many restaurants have people just leave and not even pick up their last check. Most just tear the check up. But, it is supposed to be sent to the state. If the employee demands it a year or two later then the owner has an issue with taxes.
Workers comp is always an issue with restaurants as they have small claims all the time. Cut fingers, burns and slipping on wet floors. Usually if you look at their workers comp rates, most have increases on their mod rate. They call that a “ consent to rate” and they just increase the multiplier. A 1.0 mod rate means you pay the state rate. A 1.75 mod rate means you pay 175 % of the state rate. A PEO can usually get that reduced back to a 1.0 mod.
There is also the FICA Tip Credit. Many owners don’t apply for this and some don’t know about it.
The FICA tip credit gives some relief to employers who pay FICA taxes on tip income that was paid to their employees by someone else. The credit reduces the federal income tax of the employer by an amount based on the employer’s share of FICA taxes paid on a portion-reported tips.
We see restaurant managers fire servers for being slow and cooks for complaints and then when they do get taken to task they have no written policies, no handbook, no acknowledge form signed by the employee, I-9’s are almost always completed incorrectly if done at all. If OSHA comes in because of an injury they always go through those things, the posters, safety manuals, etc.
Another issue is most have no benefits. That is a whole different can of worms. Supplementals cost the employer nothing and those are well liked by the staff. Most are part time and can still get them.
I grew up in the small town of Madison, Florida.
Graduated from Florida State University (Go Seminoles )!!!
My wife and I have called New Smyrna Beach Florida our home since 1994 and around then is when I entered the HR World of co-employment. I have loved every minute of it. I have signed up hundreds of companies over the years, some with just a few employees and many with several hundred employees in about every state in America.
I love many things about my profession.
Often I can save a business owner money on their Labor Costs, Unemployment Taxes, Workers Compensation and Service Fees.
With some companies their needs are more about HR Support, Compliance or Affordable Benefits, also things that we supply.
Many business owners don’t know their vulnerabilities until something bad happens and they learn the hard and expensive way. Our job is to be proactive and make that owner as “bullet-proof” as possible.
I feel that the main thing I bring to the table is TIME. Time for the owner to spend working ON his or her business as opposed to IN it. That is the one commodity that is always in short supply.
Contact by phone or text: Mr Charles Argenbright to assess your co. or organization needs