Labor costs

Labor costs for foodservice establishments include wages paid to hourly employees, salaries paid to management and supervisory staff, and employee benefits for all employees. In the United States, average labor cost is typically 25 40%. Many foodservice employees are paid hourly wages and some also receive tips from customers. If hourly employees work more than 40 hours per week in the United States, they must be paid an overtime wage, which may vary between 1 and 3 times their normal hourly wage. There are also a number of salaried employees these employees are considered fixed-cost employees. This means that they will receive the same salary regardless of the number of hours they work and their salaries will not change over the short term. Business volume therefore does not affect this cost.

Employee benefits represent another significant component of labor costs for a foodservice operation. In addition to wages and salaries paid to employees, restaurant operators must pay federal and state taxes on all wages earned by these employees. Also, many employees receive additional benefits, which can include, but are not limited to, health insurance, vacation/sick pay, employee meals, and uniforms. Employee benefits can comprise over 15% of total labor costs for a foodservice operation.

Labor employment

Employment usually refers to the form of the...