Author: Keely Hungate

Much like other industries such as healthcare, construction, and manufacturing, restaurants must comply with OSHA rules and regulations for the safety of employees and customers.

If you’re not familiar with OSHA (or you need to brush up), here’s a quick primer.

What is OSHA?

OSHA stands for the Occupational Safety and Health Administration, or OSHA, as part of the Occupational Safety and Health (OSH) Act of 1970. It was created as a response to the rising number of workplace deaths and injuries during that time. OSHA sets and enforces certain standards in an effort to keep working men and women safe and healthy while working at their place of employment. These standards are reinforced with training, outreach, education, and assistance for employers and their employees. 

OSHA Rules and Regulations for Restaurants

Restaurants are subject to the same standards as factories and other work environments, though the implementation might differ. OSHA provides specific rules and regulations that restaurant owners must adhere to “keep their workforce free of serious recognized hazards,” according to the OSH Act. These include:

• Posting an official OSHA poster that notifies employees of their rights under the OSH Act and a list of the owner’s obligations. The poster should be placed in a highly-visible area where there is a lot of floor traffic. 
• Keeping accurate and updated records of accidents and injuries that occur in the workplace. 
• Reporting any work-related fatalities, hospitalizations, loss of limbs or eyes to OSHA within eight hours of being altered of the event. 
• Allowing employees and their representatives easy access to their medical records. 
• Ensuring employees there will be no retaliation if they bring up safety concerns or contact OSHA. 

New requirements and safety standards for restaurants are being enforced due to the Covid-19 pandemic. One of them requires employers to report any cases of the virus among restaurant staff. Others include:

• Limiting direct contact with the public through takeout or curbside services
• Encouraging employees who are sick or show symptoms to stay home
• Training workers in proper hygiene practices
• Cleaning and disinfecting surfaces on a regular basis using only cleaning chemicals on this list
• Allowing workers to wear masks or other protective gear to help prevent spread 
• Communicating regularly about any health and safety concerns

For more on OSHA’s standards, refer to the Young Workers – Restaurant Safety page on the OSHA website. 

Restaurant Employee Protections Under OSHA

As a restaurant owner, your employees can file two types of complaints:

1. Safety and health complaints – These are filed by employees who believe they are working under unsafe work conditions or the atmosphere is detrimental to their health. 
2. Protection from retaliation complaints – Employees can file a complaint if he or she believes they have been retaliated against for voicing concerns about the health and safety of their work environment to OSHA.

Your restaurant employees also have other rights under OSHA, including these key protections:

• A safe and healthy workplace
• The ability to file a worker’s compensation claim if injured on the job
• Minimum wage payment, whether through hourly pay, tips or both
• Overtime pay if more than 40 hours are worked a week
• A 30-minute meal break during any shift longer than six hours
• Protection from discrimination
• Protection by laws for minors (if under 18 years of age)

   

How To Keep Your Restaurant OSHA Compliant

Following OSHA rules and regulations in your restaurant is essential for happy and healthy employees. There are a number of ways to make sure you reinforce safety and health standards in your kitchen and dining area: 

• Communication – One of the most important things you can do to ensure the health and safety of your employees is to openly communicate with them, and encourage them to do the same. This means practicing patience and good listening skills without judgement, offering valuable feedback and guidance, and making them feel valued. 
• Training – Employers are required by OSHA to train their employees on the health and safety of their profession. This includes instructing them on the use of tools and machines necessary for them to perform their jobs, as well as emergency procedures. 
• Ergonomics – The most common type of injury in restaurants are sprains and strains, burns, lacerations and puncture wounds, and eye injuries. Make sure employees have the equipment needed to perform their jobs safely, and are able to use it in the most comfortable way possible. 
• Floors – Slips and falls are the most preventable accidents but they can result in serious injuries. Make sure floors are clean, not slippery and are clear of obstructions. Wherever employees have to stand for a long time, such as at prep and cooking stations, provide a padded surface to avoid back and leg strain. 
• Heat – Train employees on how to work safely around heat in a commercial kitchen to avoid burns, hot oil splashes and hot plates.

Maintaining and enforcing OSHA standards is essential to help keep your employees safe. But the Covid-19 pandemic has shown a new light on the importance of restaurant cleanliness and safety. Using software that allows employees access to their tips without handling cash is one very important way to help deter the spread of Covid-19 and ensure you’re following OSHA guidelines. 

Tipping out on payroll can seem like a winning solution for employers: namely, you don’t have to deal with the headache, liability, and health hazards of cash, and it solves the problem of ever-increasing credit card transactions. 

But for employees, payroll tip-outs have some major downsides — most notably the time lag before funds are available.

In normal times, asking hospitality employees to wait weeks for their earnings ultimately puts restaurateurs at a disadvantage. Until recently, workers in a competitive labor market were increasingly opting for positions with employers or gig platforms that pay out daily. 

Of course, the pandemic has turned the labor market on its head — at least for a little while. But that doesn’t change the problem that payroll tip-outs present to workers; in fact, the current environment makes it even worse. Now more than ever, hospitality workers need and deserve every ounce of financial security they can get. 

Let’s take a closer look at the situation, the real impact and some alternatives you have today.

THE SITUATION

There’s no doubt about it: tipping on payroll can make the flow of business simpler for restaurant owners and operators.

• Speed – Process automation can make it a fast option for management when they’re pressed for time. (Which, we know, is all the time.)
• Visibility – Being able to see the whole process can help avoid overpayment of supplementary wages (covering minimum wage and/or healthcare coverage). It also eliminates the human error that is so common with cash tip-outs.
• Ease – Having all taxable income in a single location can make it easier to calculate and take the Tip Credit, as well as comply with tax withholding, reporting and payment requirements.

Tips on payroll can feel like they’re working for your employees simply because they aren’t complaining. But especially now — when hospitality workers know their jobs are on the line — your people may be less likely to speak up, however financially strained they may be.

THE IMPACT

Tipping through payroll puts direct and indirect stress on your people — which, in turn, puts direct and indirect stress on your team culture and the dynamics within business.

3 types of stress your people may be experiencing:

1. Financial Stress – Daily tips are key part of the reason employees are in hospitality. Biweekly electronic payments create a time lag, which can cause major cash flow problems. 
2. Manager/Employee Stress – When restaurants tip out on payroll, visibility and transparency suffer. Often, employees begin to question if tip calculations are done correct when they’re not done daily, which puts managers in the hot seat and can ultimately erode trust.
3. Environmental Stress — A work environment that with culture issues puts a strain on productivity, regardless of whether the stress is due to reasons professional or personal – and that’s assuming they stay with you. After all, 42% of employees have left a job simply due to the stressful work environment. 

Any one of these could be the reason that your talented staff choose to leave for another opportunity, and turnover costs are significant. 

AVAILABLE ALTERNATIVES

Employers have a variety of real-time options to help avoid the downsides of tipping through payroll. 

• Cash – It’s easy for employees to understand the value of their tips when they are paid in cash, but there are a variety of hidden costs ranging from external fees to increased risk of employee theft. 
• Paycards – Cashless options always mean a safer environment for staff, but paycards involve long transfer times and are not accepted by all businesses. 
• Virtual Tech Solutions – Options like Kickfin can transfer tips directly into your employees’ bank accounts, instantly. That means it’s available for use right away. This combines the immediacy benefit of cash, the security benefit of paycards, and the hassle-free benefits of payroll, while eliminating all of the cons.

Tipping on payroll impacts your business in both visible and less visible ways. Explore all your options, so you don’t lose out on talent for reasons completely in your control. 

In recent weeks, big-name players and small independent outfits alike have rapidly pivoted to off-premise delivery or curbside services — a model that many of these restaurants had never considered before the coronavirus pandemic required them to.

Fortunately, shutdowns and social distancing are not forever; but that doesn’t mean the shifts you’ve made to your operations should be temporary, Band-Aid solutions.

While these changes may seem challenging, or even forced, savvy restaurateurs are finding ways to leverage them in their favor so their businesses and their teams can benefit in the long term.

As you’re pivoting, be sure that you’re making strategic decisions wherever possible — so that you’re not only responding to today’s situation, but also positioning your business for growth as our industry rebounds.

Is your business ready for the changes you want to make?

“Readiness is all about building agility into your fundamental business model,” says CohnReznick’s Stephen Mancini, Hospitality Operations Leader. “Although you can’t spend weeks, months, or years solving the problems confronting you today, you do have the opportunity to evaluate with a fresh perspective.”

Below are six variables and opportunities to consider as you’re navigating this new normal and planning for relaunch.

1. Review Your Fixed Costs: Look at your existing contracts. What are you paying in rent and on your lease/mortgage? This is the basis for leverage in renegotiating with your landlord or bank. (It will also help you determine whether government relief opportunities are applicable.)

2. Revisit Your Labor Framework: Is your staffing plan labor-heavy? Review what is truly required to keep your team in place. Consider ways to operate more efficiently in-house. Changes need to factor in both monetary savings and what will be needed to support the pivot to off-premise delivery or curbside services.

3. Reevaluate Your Cost of Goods Sold: What does it really cost to produce your menu? Make sure you get more product into the fast-casual concept as you pivot. Buy in bulk whenever possible, and use your buying power to secure the best pricing. You may also find ways to retool your offerings, such as adding another pasta entrée or lower-cost menu item. 

Are there new tech solutions that can support your pivot?

Restaurant owners/operators rarely have time to explore the entire technology landscape. Focus on options that will support your movement toward off-premise delivery or curbside services.

Keep in mind: While your budget may be constrained given the current market, many platforms are providing their software for reduced rates to support new and existing customers during this difficult time.

4. Leverage tech that delivers a new customer experience. Introducing an online reservation/ordering service or tapping into a reservation/ordering call center would mean that you no longer need a dedicated host on-premise for nine hours each day. Centralizing this labor-intensive activity compounds the savings for multi-unit operations.

5. Utilize tech that impacts the employee experience. During the Covid-19 crisis, more people are paying online or with credit cards. Many restaurants are attempting to reduce the amount of cash on their premises, as it harbors hazardous germs.

Implementing contactless payments for tip-based income means you can reduce the amount of cash on your premises, without making employees wait for tips to come through on payroll. This is more important now than ever before, as many hospitality workers are suffering financially. (Bonus: You do not have to factor in the hidden costs of tipping out in cash.)

6. Employ tech that further simplifies your operations. Available technology can scan invoices and drop them directly into your accounting system. You could shift your bookkeeping labor to help keep you on top of invoicing/purchasing or eliminate your bookkeeping labor costs altogether.

In order to survive, hospitality businesses must be extremely nimble and make decisions fast, but that doesn’t mean you can’t think long-term. Prepare for the future by making strategic operational changes now — and wherever possible, take advantage of today’s technology to help you work through the practical realities of pivoting to off-premise delivery or curbside services.

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Stephen Mancini is a senior manager in CohnReznick’s Strategy and Transformation Advisory practice and the firm’s National Hospitality Operations Practice Leader. Stephen focuses his practice on areas of growth and innovation strategy, corporate and business unit strategy, go-to-market strategy and execution, operational value creation and digital and technology transformations.

CohnReznick’s online Coronavirus Resource Center provides guidance for your business during this uncertain time. This resource is available to the public and provides detailed insights on managing risk and addressing challenges during this pandemic as well as content on preparing for future disruptions.