Managing an hourly staff in the hospitality business can introduce complexity when you begin to think about the different elements required to maintain compliance. Whether it is managing shifts, blended rates, tip credits or wage and labor rates, there are numerous ways it can go sideways on you. Without a seamless way to link your Time Collection system to a Payroll Management Solution, you are left manually matching rates with time worked. How can companies eliminate the risk, and increase value?
Time Collection comes in all Forms, but Few Understand the Compliance Implications
Many organization now use some form of time collection for their employees. Point of Sale (POS) systems often have time collection components, ones that may work well in a basic capability to record time worked. However, there are many other factors in hospitality that require a industry-focus:
Blended Rates: You may have staff that work both Front of House (FOH) and Back of House (BOH), or are both host and waiter; these are different wage rates, and without recognizing these differences you can run into compliance risk in assigning improper payroll processing to that employee. You want to ensure that your time collection has the ability to factor in blended rates and discern between the work they are doing with the rate they should be making.
Tip Management: Tips can be a tricky thing, especially when it is a core component of employees’ wages. Knowing how you are calculating tips to the staff, whether through tip pooling or using tip credits, you want to have the tip calculations accurately reflect your policy. Failure to report or accurately process tips in your payroll management system can result in $1000 fine per incident. You want to ensure that you have the right methods of managing gratuity in your system and have that information calculated for your payroll.
Connecting Time Worked to Payroll: Time collection is only one half of the story. Without a comprehensive Payroll Management Solution, you cannot accurately have the time worked and recorded translated to a payroll that takes into account all the potential compliance issues. This includes understanding the tax rates per location, the wage rates per employee, any deductions that need to be taken, and any tip credits that contribute to the wages. You also want a system that will provide you with speed AND efficiency – having a system that builds intelligence into the employee data and they time worked helps in that you reduce manual efforts to match these data points. In an integrated workforce management solution, the work is done in the background for you; you just need to correct any exceptions.
What to Look for When Considering an Integrated Time Collection and Payroll Management Solution
While there are many solutions that can achieve the need of building automation into time collection and payroll management, there are few things to consider that fit hospitality industry:
Ease of Use for The Staff: This really just means that it has to be easily managed and intuitive for hourly workers to be able to manage their time. This can be through mobile solutions, in-house clocks (which are often now biometric, making clocking in faster), and needs to be a one-stop shop. It should give the staff the ability to request time-off, allow them to view their time worked, and their schedule for the week. This make it their connected solution to working their shifts.
Purpose-built for Hospitality: Understanding the changing landscape of hospitality, particularly restaurants, can be challenging if you aren’t using an industry-driven solution. Having solutions that know the difference between FOH and BOH rates, tip credits, blended rates, tip pooling and other wage and labor components will make the difference in the value you get from a solution.
Integrated with Payroll Management: Time worked to time earned is an important way to ensure that you are effectively managing costs correctly, paying at the appropriate rates, and are making the necessary tax and benefit deductions. Without a industry-driven workforce management solution connected to your time collection system, you have automated only a portion of your business. Without proper payroll management, you will be forced to spend more time and resources reconciling shifts and the rates associated with it, cross-referencing the deductions and regulatory compliance for each employee, and can be rife with errors. Integrating with a payroll management solution that effectively eliminates this manual effort allows you to minimize time to process and allows you to shift resources to more value-added activities for the business.
Minimize Compliance Risk: With any hourly workforce, there is risk when it comes to maintaining compliance. Employees have a right to get paid for their work, and any errors in payment, time worked, or improper reporting can result in fines, liability on the employer and more. In some cases, this can cause a business to incur fines and lawsuits that could potentially sink the business. Having a workforce management solution that combines the ability to properly track work, and process the payroll in a compliant manner minimizes that risk, and reduces the manual checks and balances on the payroll.
How to Build a Better System with Time, Labor and Payroll
There is no one way that a company can achieve zero risk. There is always going to be some errors in payroll and time collection that operators will have to address. However, the goal of operating the business should be at the forefront, and administrative tasks can be automated. Time Collection and Payroll Management Solutions become one of those key areas. By implementing a workforce management solution that enables employees to manage their shifts, record their time, and factors in their rates, tips and deductions into an automated payroll management solution, you can save in many ways. It helps reduce risk of compliance errors, speeds the time to process your payroll and let you focus on what matters most – running your business.