Restaurants and Hospitality
Shift swaps, weather and events move hours week to week in restaurants and hospitality. Hourly staff are counted from actual records, so scheduling and payroll systems must agree.
The three things to know.
Why Hours Swing
Seasonal demand, events and staffing patterns make weekly hours unpredictable. A long measurement period gives a fairer average than any single month.
Count From Actual Records
Hourly staff must be counted from actual hours worked and paid. Reconcile the time clock, scheduling tool and payroll before the window closes.
Tipped and Split Shifts
Hours of service follow hours worked and paid. Clear rules for split shifts and training time prevent undercounts.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Banquet Hall With Seasonal Events
A banquet hall runs weddings from May to October. A server works 38 hours a week in season and 8 in the off-season.
What the Rule Produces
Over a 12-month window she averages about 22 hours a week and is not full-time for the stability period. A monthly design would have flagged her as full-time for five or six months and required an offer in those months.
Four steps to apply it.
1. Test the data
Run last year’s hours through each design.
2. Choose the method
Pick the one that matches the season.
3. Reconcile systems
Compare the time clock, scheduler and payroll.
4. Document the design
Put the choice in the plan.
Where it goes wrong. Relying on scheduled hours instead of hours actually worked and paid.
The questions that come up next.
Do seasonal restaurants use seasonal rules?
If the position’s customary annual employment is six months or less, a hire can be seasonal. Year-round restaurants with busy summers are judged on the facts of each position.
Which method fits a restaurant best?
Many use look-back with a 12-month window ending before open enrollment, but each employer’s hours pattern decides.
What about managers?
Salaried staff can be counted by actual hours, a days-worked or a weeks-worked equivalency, as long as it does not understate hours.
Do banquet staff paid per event count?
They count on hours worked and paid. Where hours are not tracked, a method that does not understate hours is needed.
Do tips count as hours?
Tips are pay, not hours. Count hours worked.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Retail
Holiday spikes and seasonal hires create a workforce that looks full-time for eight weeks a year.
Health Care
Per-diem, as-needed and agency-like staff work irregular schedules by design.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
Talk it through with someone who runs this every year.
We help you choose the design, document it and reconcile the hours before the numbers reach your reporting.
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