3 Reasons Specialized Restaurant Payroll is So Helpful

Imagine a restaurant owner looking for a new payroll solution to replace outdated software. He could purchase yet another off-the-shelf product and hope for the best. He could sign on with a cloud payroll service and turn everything over to them. Finally, he could contract with a provider that offers a specialized payroll solution designed around the unique needs of restaurants. What is the best choice?

The answer to that question is a no-brainer. And yet, far too many restaurants struggle with inadequate payroll systems that just do not work well. It’s enough to leave the good people at BenefitMall scratching their heads in astonishment.

BenefitMall is a nationally recognized payroll and benefits administration provider that offers a specialized solution for restaurants. They say there are three reasons specialized solutions are so helpful – to both individual establishments and big chains alike:

1. Exceptionally High Turnover

QSR Magazine recently cited statistics from the Labor Department that show the restaurant industry employs just over 12 million people. Those same statistics show an exceptionally high turnover rate of 75%. That means three out of every four new restaurant hires will not remain in their positions for at least one year.

Reducing high turnover rates is absolutely essential to restaurant owners. However, that is a different topic for a different post. The point here is that such high turnover leaves payroll staff having to deal with a constant flow of new workers hired to replace those who leave. Payroll is left to deal with a revolving door that sometimes turns at breakneck speed.

Specialized restaurant payroll is designed with high turnover in mind. A good software solution will not reduce turnover, but it will make life easier for payroll staff.

2. Handling Tip Income

Another sticky issue for restaurants is how tip income is handled. When you combine tips with cash and credit card payments, you have an added layer of complexity to get through just to sort it all out. Top it all off with differing federal and state laws and compliance can be a real problem.

A small handful of states, like New York for example, make the issue of tip income even more thorny with inconsistent minimum wage laws. Did you know there are at least three minimum wage rates for New York restaurant owners depending on where an establishment is located? Keeping track of it all is the stuff of nightmares.

Once again, a specialized payroll solution for restaurants can make it easier to keep track of how servers and bartenders are paid. The right software can make it easier to track tips, even if these are shared with back-of-house staff.

3. Time and Attendance

Finally is the painful issue of time and attendance as it relates to overtime. Restaurants are not exempt from federal laws requiring most workers to be paid time-and-a-half for all overtime hours worked. But determining how much to pay servers and bartenders is more difficult when you’re dealing with a combination of hourly wages and tips.

A good software solution with a solid time and attendance module integrates time and attendance with calculation of hours and pay determination. Everything works together seamlessly to ensure that employees who have earned overtime pay actually get it. And because everything is done automatically, the risk of human error is minimized.

A specialized payroll solution for restaurants cannot solve every problem that crops up in the payroll department. But it sure can make life easier. Off-the-shelf payroll solutions just don’t cut it in the restaurant industry, thanks to the unique nature of how restaurants do business.

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