Food Truck Employee Guide Part 2

Food Truck Employee Guide Part 2

by | Dec 16, 2016 | Food Truck Employee, Food Trailers, Food Trucks, Mobile Food, Mobile Food Business

Welcome to part 2 of the Food Truck Employee Guide! In this post we’ll cover payroll, healthcare, managing and the unfortunate reality of terminating an employee.

Shout out to Terrence of TBD Foods for helping us with this post. TBD foods offers fine dining chef service – specializing in farm to table fare.

Let’s dive back in, and check out Food Truck Employee Guide Part 1 if you missed it!

Pay and Benefits

After finding the right candidates, you need to hire these folks and make sure they are happy with the offer you’re presenting to them.

First you need to figure out what to pay these new food truck employees, should it be hourly or salary? Full or part-time?

Before you overload yourself with all these questions take a breath. Look to otherPayroll-1-300x199.jpg food truck owners or other online job postings to get a feel for what competitive wages are in your area.

Payroll Accounting

Having an employee requires you to file state and federal taxes (Unemployment tax, Social Security, and Medicare tax) as well as document pay.

This can be a daunting task and take your focus away from growing your business. You might be tempted to outsource all your accounting.  However, I caution against that.  Where your income and expenses are coming from is the pulse of your business. Monitoring that pulse and understanding the financial details will allow you to make sound business decisions.

To keep in touch with your financials while outsourcing the detail work, I recommend a free program called Wave accounting or QuickBooks Online.

Food Truck Food Truck Payroll Accounting.jpgWave is a free cloud based accounting program for small business.  It allows automatic downloads from credit cards and banks. I should note, I find their payroll services and auto filing lacking compared to QuickBooks. You can get Quickbooks for around $40 a month.  In addition, QuickBooks is the gold standard for accountants and this will save time and costs when working with an accountant.

By taking small steps and keeping up with your expense and income weekly, bi-weekly or monthly, you’ll set yourself up for success come tax time.  If you keep your books current, it can easily be exported to your accountant.

TIP: Meet with your accountant at the start of each year to make sure you categorize expenses and income correctly.

Health Care and Workers Comp

Healthcare continues to be a trending topic nationally. It also plays a large role in the food truck business.

Fortunately, a food truck employee tends to be young.  Workers under 26 are still covered by their parents insurance, so hopefully they wouldn’t need your coverage!

For yourself and employees who do need coverage, healthcare.gov or your state’s healthcare exchange site can provide options.  There are subsidies that can be obtained based on income.

healthcare-center-qlook.jpgSome states will require you to carry workers comp while it’s optional for others. Either way, it’s best to know the requirements by law.

For an overview of each state’s requirements, check out Workers’ Compensation Laws – State by State Comparison

What is workers comp?

Workers comp covers employee’s medical, disability, rehabilitation, or death as a result from an accident in the course of employment.

Why carry it?

Workers comp insurance protects employers from most employee injury lawsuits and promotes workplace safety.

Managing Employees

Hopefully by this point you’ve done your due diligence and your team is growing! Naturally, this growth requires management.  This is where you come in.

To ensure the paychecks are accurate each week, make sure you have a time clock or clock in clock out system.  Compare that to the week schedule and compile the info weekly or bi-weekly.

Depending on where your food truck is, your business will fluctuate with the weather. Obviously in colder areas, business is slower in the winter months. It also slows as the heat rises in the summertime! Weather becomes a reason for hungry patrons to venture to areas of air conditioning compared to your truck’s al fresco dining.

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With these fluctuations the size of your staff will also vary, which can be tough on employees having their hours and paychecks dwindle. Let your staff know of these changes well in advance to be prepared for the slow down.

This communication will allow your employees to look for other work if they want.  As their employer, respect their decision to find another part-time job or another job entirely.

Remember,your employees do have bills to pay and it would be unfair to expect them to wait around until the busy season not working to help your business.

It is a tough situation when the weather does change.  This advanced notice of hours being cut will help your food truck employees plan to make alternate plans when hours are cut.

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Time to terminate an employee?

Firing an employee is challenging in itself.  Combine that with the fact that possible missteps can result in a lawsuit!  You’ll need to tread lightly when looking to part ways with employees.

Use the below PDF as a guide when seeking a preliminary legal opinion from your own counsel before terminating an employee. This should aid your counsel in evaluating whether the proposed termination creates potential legal exposure and the need for additional legal advice.

Be sure to check out the first part of this blog series – Food Truck Employee Guide Part 1

This article was a collaboration of Joel Paprocki of InsureMyFood.com and Terrence Rogers of TBD Foods.

Food Truck Employee Guide Part 1

Food Truck Employee Guide Part 1

by | Dec 14, 2016 | Food Truck Employee, Food Trucks, Mobile Food, Mobile Food Business

This is a collaborative article we did with Terrence of TBD Foods to cover some lesser thought of problems associated with finding a food truck employee.

 

Food Truck Employees

 

You’ve started or are starting a food truck, congratulations!  Aside from time capital and creating tasty treats, you’ll need employees.  Finding people to run your business and sell your product for you, eventually without you there, are imperative to your success.

In another post, Terrence outlines what to look for in a prospective food truck employee.

Finding your Food Truck Employee

Now that you know what to look for in a food truck employee, you’ll need to know how to find them! Craigslist is first thought for most for its ease and cost to post a job listing title. Believe it or not, it’s how I found my job! craigslist-logo2.jpgThis does require some time to create, check out this article on how to write a solid craigslist job posting.

Apart from the world of Craigslist, ask around to see if friends, family or former co-workers know of anyone who is looking for work. I don’t suggest hiring your best friend. If you’ve cooked before, it doesn’t hurt to ask your cook friends to see if anyone is looking for work. Maybe you can get lucky with an unhappy line cook or dishwasher looking for new work.

Prospects

Now you have an idea of demand for people trying to fill your job vacancy, how do you whittle the number down to find your ideal Food Trucker? Due diligence, just like in any job industry.  Bring them in for an interview and if that goes well, bring them in for a trailing/stage (derived from the French word stagiaire meaning apprentice/trainer.) Free labor for a few hours and a real opportunity to see how your prospective employee does in the tight quarters of a food truck – really valuable information for employers.

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Protecting your Investment

Treating this like any other job, it is worth your time to check the background of a prospective employee. Remember, employees are an investment so it’s important to check references, past employers and a do background check to make sure you are getting the same person whose resume had you jumping up and down in excitement when you received it.

Background Info USA, provides access to comprehensive background checks which includes:

  • Multi-Court Criminal Database
  • Search, Sex offender registry for 50 states
  • Social Security Number verification
  • One Single-County Criminal Search
  • OFAC/Global Homeland Security Check
  • Adverse Action Notices

If you are going to have an employee driving your truck, you NEED to check their driving record. This prevents surprises when it is time to add them to the business auto insurance policy. With a spotty record, you will get hit with a large premium increase.

Records highlighting driving history over the past 3 to 7 years and are available in all 50 states and Washington DC. Background Info USA, and other providers allow for easy ordering.

The food industry is notorious for having employees who are rough around the edges.  They also put out good food. Before hiring a person ask yourself if you want your customers to see this person as part of my brand? Cooking can be to taught.  Value reliability and professionalism over culinary skill.

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Classifying a Worker: Employee vs. Independent Contractor?

Many Food Truck owners prefer to pay their “employees” as 1099 workers due to the small amount of tax paperwork and expenses.  Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties from the IRS.  It can also lead to a workers compensation insurance audit surprise.

WHY? It has to do with the way the IRS and Workers Comp insurance define employees (W2) and independent contractors (1099). For a full IRS checklist of determining an independent contractor go here.

If you are uncertain whether you have an employee or an independent contractor, Form SS-8 is available to request the IRS make the determination for you. There is no charge for filing Form SS-8 with the IRS.

*Note that a incorrectly classified workers will sometimes be surprised by the amount of taxes they owe at year-end.  Independent contractors are generally required to make quarterly estimated tax payments instead of having their tax withholding payments made through payroll.

This unexpected tax burden at year-end can lead workers to argue that they are an employee and NOT an independent contractor.

If the IRS believes there was intentional disregard, the employer can be held personally liable for both the employer AND employee payroll taxes.  A penalty of 20% of wages paid to the worker along with interest and additional underpayment penalties will be assessed. The IRS can mandate these adjustments going back the last three years!  I cannot stress the importance of doing your research on employees!

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This article was a collaboration of Joel Paprocki from InsureMyFood.com.  Joel offers affordable insurance for food trucks, food trailers, caterers and chefs. Also contributing is Terrence Rogers from TBD Foods who offers fine dining chef service – specializing in farm to table fare.