This week in Homebase News we cover a steep fast-food industry turnover rate, a potential new rule on the overtime eligibility threshold, and more. Read below to get the details on these stories and other happenings involving local businesses and hourly workers.
Report: Panera Loses Nearly 100% of Workers Annually
The employee turnover rate in the fast-food industry was highlighted by a recent report that said Panera Bread loses close to 100% of its workers every year– and that’s considered good by industry standards.
“In the restaurant industry, turnover is 130%, turning over more than a full workforce every year,” Panera Bread CFO Michael Bufano said. “We are a little under 100%, but still a huge number.”
Rosemary Batt, chair of HR Studies and International & Comparative Labor at the Cornell School of Industrial Labor Relations, said the turnover rate has gotten worse in recent years.
“It’s definitely been going up,” she said. “If you lose someone, it is not a real cost, because they are so easily replaceable. … The industry has thrived on this HR model of turnover-proof jobs for many years, because they could get away with it. Now turnover is absolutely excessive, and some chains are beginning to put numbers on the cost of turnover. I know some chains that are focused on it. Because turnover is getting so serious and because chains have the ability to do the HR analytics, they can begin to cost out turnover and say, ‘This is not a cost we have taken seriously, because historically we were counting on high turnover model as acceptable.’”
DOL Set to Finish Rule on Expanding Overtime Eligibility
The Department of Labor is set to finish a rule that would increase the pay threshold that determines which workers are exempt from overtime as early as next month.
Sources say the new rule will lift the threshold from the current $23,660 to around $36,000, meaning workers who earn less than that much are eligible to be paid overtime.
The administration issued a proposal in March to raise the threshold to $35,308, which would impact at least 1 million Americans.
NY Bill Cracks Down on Small Business Loan Abuses
NY Governor Andrew Cuomo recently signed a bill that prevents lenders from seizing the assets of small businesses by using the state’s court system.
The new law prohibits the use of confessions of judgment against businesses and individuals outside of the state. The law comes after it was revealed that 32,000 of these legal documents were filed in the state of New York by unregulated lenders, mostly against non-New York borrowers.
Confessions of judgement are required by some cash-advance firms to be signed before businesses can get their money. The borrowers waive their legal rights and agree upfront to lose any future dispute that may come about upon signing the document.
“New York courts exist to uphold the rule of law, not to give unscrupulous creditors a means to prey on consumers,” Cuomo said in a statement.
Survey: 44% of Small Business Owners Are Not Prepared for a Recession
A recent survey found that while 80% of small business owners are worried about a possible recession, 44% of business owners have taken no steps to prepare for one.
The survey, conducted by lending company BlueVine in an effort to discover what businesses are doing to prepare for a recession, also found that 36% of business owners don’t plan on preparing for one in the next 12 to 24 months.
“Whether we’ll experience an economic downturn in the coming months remains to be seen, however, now is the right time for small business owners to assess their current business strategies and make adjustments to ensure they’re prepared to weather the storm,” BlueVine CEO Eyal Lifshitz said. “For example, having access to flexible capital can help offset slower sales periods that typically come with a declining economy. One thing I always stress to small business owners is to apply for and secure financing even when you don’t need it.”