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A Timely Way to Handle Overtime in Your Restaurant

A lot goes into creating a successful shift schedule that produces the right balance of labor. There’s current staff count, projected guest count, historical sales data, overtime limits, as well as team member tenure, skill set and experience. There’s another variable that stands to punch a big hole in your profit goals: Overtime. Restaurant managers […]

A lot goes into creating a successful shift schedule that produces the right balance of labor. There’s current staff count, projected guest count, historical sales data, overtime limits, as well as team member tenure, skill set and experience.

There’s another variable that stands to punch a big hole in your profit goals: Overtime.

Restaurant managers will encounter overtime work. Between busy seasons, holidays and the unexpected party of 10, it’s inevitable that you’ll have to ask your team to stick around a few extra hours. Compensation for these authorized hours is typically laid out in the restaurant’s employee handbook. Handling unauthorized overtime hours, however, poses a different challenge altogether; because frankly, managers usually can’t see it.

So how do you nip overtime in the bud? First, managers can encourage a culture of productivity and honesty. Another way is to leverage powerful data that only a technology solution can provide.

Here are a few ways a shift-scheduling tool can keep you from going overboard on overtime and save you big bucks.

1. Overtime Alerts 

When you’re using paper or spreadsheets to manage employee work schedules, overtime issues are hard to pinpoint. Either your team member has to tell you or you have to have that information stored in your head, which is nearly impossible if you’re dealing with 50+ employees. A cloud-based scheduling tool, on the other hand, stores that information for you, warning you when someone is about to hit overtime status.

2. Employee Overtime Report

The overtime report shows which employees are being scheduled overtime, overtime costs for each day and week as well as overtime hours for each day and week. Knowledge like that is power for manager. And when you can see where overtime is costing you big bucks, the issue can be as easy as a quick scheduling fix.

3. Employee Overtime Warning Report

If the employee overtime report reveals what happened on a previous shift, the employee overtime warning report is key to preventing any overtime hours. A report like this can be configured by schedule, job code or employee. Once generated, you’ll see actual employee hours plus how much is scheduled, then the date and time overtime could potentially start.

4. Enforced Clock-In through POS-Integration

Five-minutes here, 15 minutes there. Every time one of your team members clocks-in too early is like skimming a tiny sliver of profit off your bottom line. The solution? Enforced clock-ins through an integration point with your POS-system. You configure the POS system to “only let employees clock-in five minutes before their shift,” and the scheduling solution goes to work making sure your employees punch in at the appropriate time.

5. Weighted Overtime Calculations

It sounds complicated, but weighted overtime calculations is just another way of explaining how you could handle an employee who is scheduled or paid two or more rates during the workweek.

Let’s look at an example: If your team member works 32 hours at $9.00 an hour and 10 hours during the same workweek at $7.00 an hour, their weighted averaged (and the regular rate for that work week) is $8.52.

This is calculated by adding their $358 straight time pay for the workweek (32hours x $9.00/hour) + (10 hours x $7.00/hour) = $358) and dividing it by the 42 hours they worked. So, in the example above the overtime rate used for ANY overtime pay would be $12.78 (1.5 × 8.52).

All of these reports can be found in HotSchedules. Wanna see them in action? 

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