Chapter 9. Lesson 5: Labor Management

Federal and most state laws impose a weekly overtime standard. This means that non-exempt team members are entitled to overtime for every hour more than 40 that they work in a week, regardless of how many hours they work in a day.

Overtime can be avoided by keeping shift lengths to eight (8) hours or less per day and keeping total weekly hours for team member at less than 40 hours. Be sure to check and understand local labor laws regarding overtime.

It is important to keep a record of when team members are available to work. Use the Team Member Availability Schedule to keep a log of each team member’s weekly availability. Keep an accurate file of team member names, phone numbers and availability. Maintain this schedule for all team members and note whether the team member is full- or part-time.

Ask your team members if they’re interested in working additional hours. This helps you develop a list of willing substitutes.

Emphasize the importance of teamwork. Emphasize to team member that when they are absent from a scheduled shift, everyone struggles. Let them know you, the team member and guests count on them to be there for their shift. Make sure team members know what is expected of them before they report to work. You may wish to post reminders of dress code standards, hygiene requirements, absentee and sick policies in team member areas. (The law may require you to post some or all of these, consult your lawyer).

Our policy is for every 4 hours worked team members can take a 15-minute unpaid break.

Your payroll service takes the payroll information provided by the manager, processes the information, creates the payroll checks and reports necessary taxes.

Managers must keep a completed copy of the W-4 and I-9 form for every team member. A separate file must be maintained for all I-9 forms. If an team member claims exempt on the W-4, managers must submit a copy of the W-4 to the IRS.

Managers must report any new team members to the payroll service provider using the appropriate form. They must supply the team member’s full name, date of birth, permanent address, social security number, pay rate, I-9 and W-4 tax information along with the hours worked. Follow the instructions in the POS Manual to add a new team member to the system.

We use a fixed labor model. We open our stores with three team members; we have five team members during our peak hours and we slide back to three during our non-peak hours.

For Example:

• Opening-three team members; 1 smoothie maker; 1 cashier; 1 team member who can do both
• Peak Hours-two smoothie makers; 2 cashiers; 1 sampler
• non-peak hours- 1 smoothie maker; 1 cashier; 1 team member who can do both

Remember our management is part of the above slots.

With 3/5/3 schedule for FOH.

When it appears that actual sales for the day won’t meet the projected sales, a manager must act quickly to adjust the written schedule. One way to do this is to ask team members to volunteer to leave early.

Remember that an team member must be paid for a minimum of two hours once he or she has clocked in and started working. Managers may also choose to “call people off” or ask people to not come to work at all. Oftentimes, team members appreciate and enjoy the time off.

Spiraling labor costs can result when the average wage rate of the location increases without a rise in productivity. When considering merit increases for team members, make every attempt to pay for performance, not for tenure.

Analyze the way each team member works and try to identify areas of opportunity that will allow him or her to become more productive.  

If a manager understands how long side-work duties take to complete, he or she can better manage and set appropriate, realistic time limits for team members. Getting people “off the clock” quickly and efficiently is one of the quickest ways to reduce labor costs and has no negative ramifications on service to the guests.

Each manager, at the end or his or her shift, must check that all team members are clocked in and out correctly. When someone doesn’t clock in or out correctly, overtime is more likely to occur. Furthermore, a manager may notice patterns of team members clocking in too early or too late and can correct the problem.

There are days when sales unexpectedly jump through the roof and it makes sense to keep one or two people to help out during the extended rush. If shifts are scheduled for six or six and a half hours, asking someone to stay later won’t necessarily mean paying unnecessary overtime. Shorter shifts also allow team members to be more productive for the entirety of their shifts. Typically, the more hours they work, the less productive they become.

Ideally, each location should have a mix of higher paid team members and those that are paid at entry-level wages. This will provide a more manageable wage rate for the location and will make it easier to manage and control labor costs.

When making assignments on the schedule, assign your best-trained, most efficient team members to work during peak periods. They are typically more productive than newer, less seasoned team members, and will also usually generate more sales dollars.

Scheduling team members to work overtime or continually allowing team members to work overtime is an inefficient method of staffing the location. It is a sign of poor management, and labor costs rise without any comparable improvement in productivity. While this may be good for the team members pocketbook, it doesn’t make a lot of business sense to pay a premium wage when, in most cases, it can be avoided.