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Food Truck Employee Guide Part 1

This is a collaborative article we did with Terrence of TBD Foods to cover some lesser thought of problems associated with food trucks employees.

You’ve started or are starting a food truck, aside from time capital, and tasty treats you’ll need employees, people to run your business and sell your product for you, eventually without you even there.

In a prior blog, Terrence outlines what to look for in a prospective food truck employee,

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Finding your employee

Now that you know what to look for in a food truck employee, you’ll need to know how to find them. Craigslist is first thought for most for its ease and cost to post a job listing title. Its how I found my job. This does require some time to create, check out this article on how to write a solid craigslist job posting.

Apart for the wonderful world of Craigslist, ask around to see if your friends, family or former co-workers know of anyone who is looking for work. Now I don’t suggest hiring your best friend, but if you’ve cooked before it doesn’t hurt to ask your cook friends to see if anyone is looking for work. Maybe you can get lucky and poach an unhappy line cook or dishwasher.

Prospects

Now you have an idea of demand for people trying to fill your job vacancy, how do you whittle the number down to find your ideal Food Trucker? Due diligence just like in any job industry bring them in for an interview, if that goes well bring them in for a trailing/ stage (derived from the French word stagiaire meaning apprentice/ trainer.) Really free labor for a few hours and a real opportunity to see how your prospective employee does in the tight quarters of a food truck - really valuable information for employers.

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Protecting your Investment

Treating this like any other job it is worth your time to check out the background of these prospective employees. Remember Employees are an invest so it wont hurt to check references, past employees and even a actual background check to make sure you are getting the same person who whose resume had you jumping up and down in excitement.

Background Info USA, provides access to the comprehensive background checks to protect your investments and current employees including:

  • Multi-Court Criminal Database
  • Search, Sex offender registry for 50 states
  • Social Security Number verification
  • One Single-County Criminal Search
  • OFAC/Global Homeland Security Check
  • Adverse Action Notices

In addition if you are going to have an employee driving your food truck, you NEED to make sure you check their driving record. This prevents surprises come time to add them to the business auto insurance policy, and get hit with large premium increases.

Records highlight driving history over the past 3 to 7 years and are available in all 50 states and Washington DC. Background Info USA, and other providers, allow for easy ordering

Quick note: The food industry is notorious for having employees who are rough around the edges who can put out good food. Before hiring this person ask yourself do I want my customers to see this person as part of my brand? Cooking can be to taught, value reliability and professionalism over culinary skill.

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Classifying a Worker: Employee vs. Independent Contractor?

Many Food Truck owners prefer to pay their “employees” as independent contractors (1099 Employee) due to the small amount of tax paperwork and expenses, BUT mistakenly classifying an employee as an independent contractor can result in significant fines and penalties from the IRS, in addition to workers comp insurance audit surprises…

WHY? It all has to do with the way the IRS and Workers Comp insurance define employees (W2) and independent contractors (1099). For a full IRS checklist of determining an independent contractor go here , but here a few that usually put most food truck workers in the employee category:

If you answer Yes to the below questions, you most likely have an employee.

  • Do you have the right to give the worker instructions about when, where, and how to work? (This shows control over the worker)
  • Do you set the worker’s hours or provide the worker with benefits?
  • Do you invest time to train the worker to do the job in a particular way?
  • Does the worker work only for you? (an independent contractor typically provides services to numerous businesses)

If you are uncertain whether you have an employee or an independent contractor, Form SS-8 is available to request the IRS make the determination for you. There is no charge for filing Form SS-8 with the IRS.

*Note that a incorrectly classified workers will sometimes be surprised by the amount of taxes they owe at year-end since independent contractors are generally required to make quarterly estimated tax payments instead of having their tax withholding payments made through payroll.

This unexpected tax burden at year-end can sometimes lead workers to argue to the IRS that they are an employee and NOT an independent contractor.

If the IRS believes there was intentional disregard, the employer and company officers can be held personally liable for both the employer AND employee payroll taxes, a penalty of 20% of wages paid to the worker along with interest and additional underpayment penalties. The IRS can assess these adjustments going back the last three years!

This article was a collaboration of Joel Paprocki of InsureMyFoodTrailer.com who offers affordable insurance made easy for food trucks, food trailers, caterers and chefs, and Terrence Rogers of TBD Foods who offers fine dining chef service - specializing in farm to table fare.

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