Human Resources

Staff, Contractors and More

When you are first starting out in business, you wear all the hats, but one of the most important and challenging responsibilities is properly and professionally dealing with prospective employees, new hires and current employees. 

You will need to protect yourself and your business by following state laws, labor department guidelines and your own instincts in all employment dealings. 

Over the years, I have had several disputes between my company policies and what the employee felt was right… often these are two different things and there is always the potential for a costly lawsuit, which you should avoid at all costs.

NOTE: Protecting your business is as simple as carefully documenting every situation, agreement, disciplinary action, termination, etc… 

I cannot emphasize this priority strongly enough. Keep clean and complete files on every hire, fire and current employee.

THE JOB APPLICATION:  Restaurant job application templates are available online, but first check with your state labor department for any specific requirements, illegal procedures, etc.. before using an application in your business.

EMPLOYEE MANUAL:   Every restaurant needs an Employee Manual that “Welcomes” new hires to the team and provides complete information on your company culture, policy and procedures, employer expectations, etc… 

The manual can be considered a legal document and the more complete and professional the information, the better protected your business will be in the case of potential disputes, legal actions, or other employer/employee situations. 

All new hires should be given a copy of your “Employee Manual” and a copy should be available upon request and/or posted in your employee communication center/employee break area.

NOTE: A restaurant specific Employee Manual Template is available from some of the larger food purveyors/distributors (Ask your account representative). Once you review any templates, you should customize the categories and information specific to your restaurant.

JOB DESCRIPTIONS:  Specific Job Descriptions for every position within your restaurant are absolutely critical to mutual understanding and communicating of your expectations to the new employee. 

Each Job Description should include: A “Key Results/Expectations” summary which outlines the basic qualifications and performance for that employee to be successful in a particular job. 

Basic minimum responsibilities of the job and performance expectations described in detail (either in bullet list or paragraph form). 

Optional additional Responsibilities to qualify for any raise or bonus, timelines to accomplish certain objectives, etc.. 

The Owner/Manager should go over each job description with the employee face to face to ensure mutual understanding and once agreement is made, both Owner/Manager and employee should sign and date the document. The signed description should be kept in the employee’s file for future reference and employee performance reviews.

HIRING:  Hiring and building a strong team is a huge and on-going challenge. In the beginning, you will want to interview, select and hire each person yourself, as your most important goal is to find the best “Fit”, not only for every job, but for your company culture. 

When you first open a new restaurant, your culture is yet to be defined, but you will have certain strong ideas of how you wish the business to operate and how each individual employee “Fits” within the big picture. 

As every person’s habits, personality, values and approach to a job is different, the “Chemistry” between employees and employer/employee is critical to efficient operation of your restaurant and ultimately your “customer satisfaction”… 

Happy Employees = Happy Customers! 

(See Key-Hiring Questions document in Academy Module 1)

NON-DISCLOSURE STATEMENT: Certain jobs within your restaurant (Manager, Bookkeeper, etc..) expose the employee to sensitive, confidential or proprietary information regarding your business. It is good practice to have these employees sign a Non-Disclosure statement that prohibits them from sharing any such information with other employees, friends, family, non-authorized personnel, etc… The only exception is legal or law-enforcement agencies have the right to subpoena any such information within your business’ legal rights. 

DISCIPLINARY PROCEDURES:  Most states require written warnings for any policy infraction or disciplinary action. When a situation arises that violates company policy, affects operation of the restaurant, another employee or guest, or is dangerous to the employee, other persons, etc.., the employee should be spoken to in private by the Owner and or Manager and the situation documented and signed by company and employee and kept in the employee’s file, regardless of how minor the event. 

The signed document serves as a record of the infraction and reminds the employee of future disciplinary action/ potential termination if the infraction repeats itself or if other negative situations arise from the employee’s performance or future actions (In the case of serious infraction, always consult your attorney and/or state labor department).

The Owner or Manager should set policy as to how many warnings should be given and documented prior to termination.

FIRING:   The right to terminate employees varies from state to state, so before you decide to terminate anyone, consult your state labor department and/or your attorney for regulations. 

Termination is necessary for a variety of reasons but most common are that the employee did not or could not meet specific job requirements, consistently poor performance after training, excessive tardiness or absences without just cause, substance abuse on the job, sexual harassment, theft of property, improper customer service or behavior, etc…

NOTE: Turnover is a fact of life in the restaurant business, but having clear policies outlined in your employee manual, clear expectations set in writing and discussed with employees prior to commencing work and clear documentation of employee performance and any disciplinary actions will help minimize termination and protect your business if the threat of litigation occurs.

FRIEND or BOSS?   When in business, often times an employer finds immediate need for additional help and hires a “warm body” out of desperation or quickly eliminating the problem. 

In these instances, friends of owners or managers may be hired creating further challenges for the business. In such cases and others, the employer/employee relationship lines and boundaries can be blurred unless Owner/Manager’s maintain a professional employer/employee relationship. There is much gray area here, but essentially maintaining professionalism and arms-length relationships is important to avoid unpleasant future situations. 

In my experience, I have seen money loaned to employees and managers which was never paid back. I have seen managers accomplish great things, gain power and authority over employees and then have unrealistic expectations from their employers, grant special privileges to other employees, steal company resources, etc…

WORD TO THE WISE:  Being friendly to employees is acceptable and desirable, but being a friend over employer is potentially hazardous.

PERFORMANCE REVIEWS:  Regardless of how few or many employees in your business, Performance Reviews should be strongly considered for all employees. Frequency of reviews vary from business to business and impact both employee performance and pay expectations, so a balance should be found that is in the best interest of your business. Reviews are a proven tool to improve communication, morale and productivity and reduce turnover in your restaurant.

RAISES or PAY INCREASES:  Raises should be considered for merit first over longevity/ seniority of the employee. If an employee has met their performance expectations as outlined in the job description, it is the owner or manager’s discretion to approve a wage raise. 

NOTE: Although money is important, employee “Recognition & Rewards” goes much further with the majority of staff and is a vital tool to building a team environment and strong company culture (See “Recognition & Rewards” in Academy Module 3).

EMPLOYEE vs. INDEPENDENT CONTRACTOR:  Different states have different definitions of employee versus independent contractor and these regulations should be understood and followed prior to hiring. 

Essentially, an individual is considered an Independent Contractor when the work to be performed is controlled by the contractor, the length of time for the work to be performed is set and defined by the contractor, the compensation for the work is defined by the contractor, the contractor carries their own business insurance and the contractor fills out a Federal W-9 form for tax purposes. 

Typical Independent Contractors include but are not limited to the following: Builders, handymen, plumbers, electricians, outside consultants, cleaning companies, landscapers, snow removers, equipment repairmen, musicians, etc..

NOTE: It is your responsibility as Owner/Manager to obtain a copy of the contractor’s “Proof of Insurance” and W-9 information which includes the full legal name of the contractor, current address and Tax Identification (or Social Security) number. 

If your business pays any Independent Contractor (not a corporation) more than $600 per any calendar year for any service (Labor Only and not Materials), you are required to send IRS Form 1099-Misc. to the contractor and a copy to the IRS at year end.

*If you have any questions or concerns about a specific HR issue, it is always advisable to consult your attorney

** IRS laws subject to change.  Consult your accountant/CPA or for updates.

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