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What You Need To Know About How A New Location Impacts Your Payroll And HR

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    Do you know how many Starbucks locations there are around the globe?

    If you guessed around 30,000 locations, you’re correct! (It’s hard to get an exact figure and I assume that’s because they are adding new stores almost daily.)

    You can buy a cup of, arguably, the world’s most recognized coffee in 78 countries and on every continent except Antarctica. (Which is unfortunate, because no one deserves hot coffee more than someone living in a place with a recorded temperature of minus 128.6 degrees.)

    Like every business, Starbucks started with one location in 1971—Seattle, WA. Eventually, its founders determined they were ready to expand to another location and that one step of faith spurred unparalleled success.

    Maybe you are at an inflection point in your business where you have grown and are considering opening another location.

    And then there were two

    Last week we talked about how fast growth presents exciting opportunities, as well as new challenges.

    Whether you’re opening your second location in the same city, or your first in a new state, expansion requires preparation and has many implications for compliance and human resources.

    The ramifications of moving towards multiple locations can leave you feeling overwhelmed, but with some planning, you can ease the transition.

    More Complicated Compliance

    As your business grows, so does the list of federal, state and local laws you must comply with. Furthermore, if you set up shop across state lines, you will need to educate yourself on the differing labor laws in that state. Some examples of what you need to consider when expanding to another location include:

    • More staff=more requirements. Increasing staff may require compliance with additional federal labor laws including the Family and Medical Leave Act (FMLA), the Affordable Care Act (ACA), and EEO-1 reporting. (See more details on ACA compliance in our previous blog.) Failing to comply can result in legal woes and costly penalties from the IRS.
    • Minimum wage laws. While the federal minimum wage is set at $7.25, some states and cities have developed their own minimum wages. Make sure you do your homework!
    • Overtime pay laws as well as minimum rest and meal periods.
    • State income tax. If your business is located in a state without an income tax, withholding state income taxes for your employees may be unfamiliar territory for you.
    • State-mandated protections for categories such as sexual orientation, gender expression, or identity that are not covered under federal law.

    For an overview of labor laws by state, check out this information provided by the U.S. Department of Labor.

    Additionally, a skilled payroll and Human Resources Management (HCM) partner can get answers to your state-specific questions and offer software that includes minimum wage alerts and tax information based where your employees live and work.

    Remote (Human) Resources

    If you plan on centralizing HR at your existing location, ask and plan for the following questions if you’ll have remote staff at the new site:

    • How are you recruiting and hiring new employees?
    • How are you training and onboarding them?
    • How will performance management work?

    This is a great time to consider a cloud-based solution for your HCM functions if you don’t already have one. Cloud-based solutions allow employees to update their contact information, complete required documentation, and login to request time off without having to have an HR staff person on-site. With that said, there’s no substitute for face-to-face time so make sure you plan for someone from HR to make regular visits to your new location.

    Payroll and Performance

    If you’re opening another location, you’ll want to compare the performance of  your multiple sites, especially if you’re in the retail or hospitality industry. Make sure you can track your labor separately at each location to have an accurate picture of expenses and revenue.

    In Your Corner

    Chances are the founders of Starbucks have overcome some hurdles as they’ve moved towards world coffee domination. Whether you’re looking to cover the globe, or simply open up a second location, Patrick Payroll is here to guide you and turn your back-office obstacles into opportunities. Schedule your free 30-minute assessment where we’ll learn more about your current payroll and HCM system and show you what we can do to knock out your payroll stress.