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Labor Controls

Labor Controls. In most restaurants, labor is the second highest cost of sales. The total of all costs associated with maintaining a workforce This includes Payroll. Payroll. The gross pay received by an employee in exchange for his or her work. Payroll is only one part of labor expense .

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Labor Controls

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  1. Labor Controls • In most restaurants, labor is the second highest cost of sales. • The total of all costs associated with maintaining a workforce • This includes Payroll

  2. Payroll • The gross pay received by an employee in exchange for his or her work. • Payroll is only one part of labor expense

  3. Other expenses of Labor • FICA Taxes • Unemployment Taxes • Worker’s Compensation • Health Insurance • Pension Plan Payments • Employee Meals • Vacation/Sick Leave • Employee Incentives and Bonuses

  4. Payroll • Salaried Employees • Receives the same income per week or month regardless of the number of hours worked. • Fixed Payroll • The amount an operation pays in Salaried Employees • Variable Payroll • Those dollars paid to hourly employees. • Added in relation to the number of guests anticipated to be served. • Management has nearly 100% control over variable labor expense.

  5. Turnover rate • Turnover rate • (# of employees separated / # of employees in workforce) = Turnover Rate

  6. Steps to managing Labor • Know your peak periods of business • Place your best employees where they will be most productive • Watch time in’s and time outs • Cross-train your staff • Monitor labor costs hourly • Communication with FOH

  7. Managing Payroll • 4 Steps to managing Payroll Costs • Determine Productivity standards • Forecast Sales Volume • Schedule employees using productivity standards and forecasted sales volume • Analyze results by comparing the actual costs to the budgeted cost

  8. Preparing a Labor Proforma • What you need to know • Budget • Tables, chairs per table, PPA, days open, turns • Average Pay Per Employee, average # of hours per week per employee • Productivity goal

  9. Preparing a Labor Proforma • Step one… • How much money will we make? • Tables X chairs X turns X PPA X days open

  10. Step 2 • How many Employees will we need? • Income / Productivity Goal / hours per week per employee • (add 20%)

  11. How many hours can we spend? Divide the income you expect to make in 1 week by 70 (productivity goal)

  12. Writing the schedule • Next, divide the hours available into the days you are open for business. • Use more hours on busier days • Write your schedule, not exceeding the number of hours allotted

  13. Productivity versus Labor cost • Productivity- a clear picture of how productive your kitchen is, excluding factors and excuses such as • Everyone is on overtime • All the highest paid employees are here • income for that department / # of hours worked

  14. Performa is a tool • A Labor performa is a tool, when used properly, it can help generate a good labor cost, however, it is not the total picture. Insure you have enough labor to properly care for the guest.

  15. Averages • Cooks $7.25 to $12.00 • Dishwashers $7.25 to $8.00 • Waitstaff $2.13 + • Trainers $4.00 + • Hostess $4.00 + tip or $8.00 • Bartenders $5.00 + • Managers 30k to 45k

  16. Overtime • Any hours worked past 40 is time and a half • DOL.gov

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