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How automation and transparency could have prevented costly lawsuits

Paying bill
Photograph: Shutterstock

The Yellowstone Club near Big Sky, Mont., recently became the focus of a class-action settlement alleging they discriminated against and underpaid certain workers. And they’re not alone.

One Google search for restaurant class-action lawsuits brings up countless examples of enormous settlements and articles from law firms urging improperly paid employees to sue their employers.

Most operators probably don’t worry too much about stories like these. Of course they pay their employees fairly and have no reason to believe they’d fall under scrutiny.

However, what if these indiscretions were not all purposeful? Surely, as many defenses have claimed over the years, sometimes mistakes just happen.

For instance, how easy might it be to transpose some numbers and accidentally miscalculate an employee’s hours, tips, wages, bonuses, or withheld taxes? How positive can an operator be that their business records are 100% accurate and therefore immune to accusations of unfairness?

The cost of correcting accounting errors–even unintentional ones–is often many times the cost of reporting things correctly the first time.

Lawyer and court fees can reach into the hundreds of thousands—if not millions—of dollars for large companies finding themselves on the wrong side of a class-action lawsuit.

Automation software that keeps calculations error-free would pay for itself many times over if it prevented even one legal hiccup down the road.

Transparency between employees, and also between employers and their employees, may be just as important as automation.

Keep in mind, operators don’t even have to makethe accounting errors in order to be accused of them.

Even if documents are impeccable, an employee may still believe a mistake has been made. Worse, they may make the claim that the mistake was intentional because of their gender, race or ethnicity.

Taking the disagreement all the way to court, with all of the fees that accompany such an inconvenience, just to prove that numbers were above-board all along, is much too costly for operators to shoulder.

Take a moment to view the business from the workers’ perspectives.

Do employees know how much they earned during their last shift?

Can they view a running total of their wages, tips, bonuses and any other earnings beforethose payments hit their bank accounts and dispute any discrepancies before it’s too late?

Are they able to control when and how they get paid, for instance through a daily pay card instead of a biweekly direct deposit?

If not, that restaurants’ methods may be lagging behind the times. Daily payouts, a choice of payment methods and earnings transparency are becoming more widespread every day.

A transparent payout system where each employee can view the relevant details lets workers know that their managers and bosses wantthem to have control over their own finances. An honest and open system is a system that encourages trust and goodwill.

What if operators could solve this problem instantly?

As for how to implement such a system, consider software. All the care and attention to detail in the world can’t surpass the pure efficiency and accuracy of having a computer crunch the numbers instead of a person.

One of Gratuity Solutions’ founders, Carlo Zampogna, said, “Our solution was created in 2012 to level the playing field. Our solution removes bias, prejudice or even just an honest mistake.

Our solution creates transparency, so that all tipped employees can see what they earn in tip income, service charges or commissions. Our solution instills trust in fellow employees, who can now be viewed as Team Members, and further removes doubt that one is not being treated fairly or equitably, for any reason.

Problems like this one are inexcusable and could easily have been prevented.”

In short: transparency builds employee trust, and automation eliminates human mistakes.

The platform developed by Gratuity Solutions helps restaurants achieve both goals. It’s easy to integrate with existing POS and payroll solutions, so operators can be up and running in just minutes. Better still, it requires almost no effort besides booking the appointment and having Gratuity Solutions’ talented techs handle the rest of the work.

To learn more about Gratuity Solutions, click here.

This post is sponsored by Gratuity Solutions

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