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6 HR Issues That May Come Back to Haunt You

by FrankCrum on October 27, 2015

The following article was originally posted on, in October 2015:

6 HR Issues That May Come Back to Haunt You"Many restaurant owners and managers are so busy dealing with costs, competitors, new menu offerings, vendors, and pricing that they may overlook some of the HR issues that can make or break their operations.

Our top six issues related to human resources are listed below. It's important to stay aware of them. Handling them properly may help keep you out of trouble and in the black.

  1. Payroll and reporting: Paying your employees is just the tip of the payroll iceberg, although with a large number of hourly employees, it is very time-consuming. Calculating taxes for all appropriate government levels can be quite complex, particularly for restaurants with multi-state operations. And then there are required reports, including 940s, 941s, and annual W2s, as well as the collection and input of data from new hires, including W4s and I9s. Missing a quarterly tax form submission and neglecting to get completed I9s can be extremely costly errors.

  2. Employee benefits: The Affordable Care Act has brought the issue of employee benefits to the forefront, and an increasing number of employees are evaluating prospective employers in light of their benefits offerings, as well as other more traditional factors. For restaurants that did not offer healthcare benefits in the past, this introduces the need to decide whether to sponsor a health plan, how to identify and evaluate plan options, how to avoid the employer mandate tax penalty, how to meet reporting requirements, and how to fund benefits. Once you’ve decided on a plan, you’ll also need to communicate options to employees.

  3. Unemployment claims: Particularly in light of the annual nationwide restaurant turnover rate of up to 300 percent, unemployment claims can be a huge burden for an already-busy restaurant administrative staff. Although unemployment tax rates reflect the size of your organization and what you have paid into the system, they also are based on the amount of benefits collected by former employees. Avoiding wrongful terminations can help reduce the amount of benefits collected and keep your rates lower. However, tax rates are only part of the cost equation. There’s also the time you spend on reviewing claims, discussing them in person or by telephone, and negotiating with the review staff.

  4. Workers’ compensation insurance: The good news is that you can have an impact on your rates. Premium rates, although regulated by each state, are based on your loss history and safety performance over a three-year period. There are two smart ways to reduce your rates: the first is to shop for the best rates, taking advantage of group buying power where possible, and the second is to create a safer work environment to reduce your losses.

  5. Risk management: Anyone associated with a restaurant has seen their share of injuries from slips and falls, cuts, improper lifting, and just plain rushing around. These injuries can lead to worker’s comp claims and higher premium rates, not to mention the pain experienced by the employee and loss of productivity in the restaurant. Again, there are two relatively easy solutions: the first is to identify the causes and create the solutions for your most common (and most costly) injuries, and the second is to institute a process of thorough, ongoing communication, training, and coaching employees to make safe operating practices a part of their everyday job. Risk management specialists can be of great assistance in this process.

  6. HR compliance: Many restaurant owners may be letting a lot of important HR compliance practices slip through the cracks, either because they just don’t know about them or don’t have the time to handle them. Unfortunately, neither ignorance of regulations nor lack of time serves as an adequate excuse if your interview and hiring practices aren’t compliant, if you terminate someone wrongfully, if your corrective actions aren’t effective, if your employment verification processes aren’t complete, if your job classifications aren’t aligned with wage and hour laws—and so on and so on. A quick look at attorney ads related to HR issues gives you an idea of where the most common risks are in this minefield.

By now you’ve probably realized that “doing it alone,” particularly with limited in-house administrative resources, may not be the best route for you. There are a number of professional service options available to you, including Professional Employer Organizations (PEOs), payroll services, accountants, benefits consultants, and others. Research and review their services carefully and select the type of organization that will provide the maximum value for you. And, if you have questions, feel free to send me an email at"

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FrankCrum is a professional employer organization (PEO), founded in 1981 dedicated to helping business owners boost HR capabilities and broaden convenient services and benefits to employees. The origin of FrankCrum dates back to 1981, when Frank W. Crum, Jr. and his father, Frank Crum, Sr., founded the Great American Temporary Service. With a passion for helping small business owners succeed, the company has evolved and grown over several decades.