Ten Things About US Labor Law（1）Why does the restaurant always stay open one day?

Last Monday, I wanted to go for some fried chicken, a Taiwanese fried chicken Chick and Tea near our house, then I went to this Taiwanese fried chicken restaurant. What happened? When I arrived, I realized that it wasn't open. I thought to myself, "I can't believe this kind of store is still not open, I'll never come back to this store again!"

On Tuesday, I suddenly thought, there is another Korean fried chicken Bonchon in the neighborhood, why don't we go to that one? And guess what? It's not open again! I was really pissed off. So I was wondering, I checked the internet and found out that these two fried chicken restaurants are closed on Mondays and Tuesdays. Too bad for me.

Why do you think restaurants in America are always closed one day? Why don't they do business when they have a good one?

First, why is the hotel always closed one day?

I was surprised when I didn't check. There is another pancake and doughnut store nearby called Soong Soong Restaurant (there is one in Xiaoyi), which does not open on Wednesdays, fortunately I didn't drive there directly on Wednesdays.

Other than that, Yang Yuxing doesn't open on Mondays, Hometown Shaanxi doesn't open on Mondays, Allah Shanghai doesn't open on Wednesdays, and Ramen Dojo doesn't open on Wednesdays.

Talk about making me hungry.

Check out their hours on Google Maps

There are legal and economic reasons why restaurants in the United States will not open one day.

Reason #1: Labor Law Provisions

The concept of overtime pay in labor law is regulated by the labor laws of most states in the United States:

If you work more than 8 hours a day or 40 hours a week, you will be paid 1.5 times your salary.

If you work more than 12 hours a day, or more than 8 hours on the seventh day of the week, you will be paid double time.

So this rule leads to a situation where an employer who hires an employee for a week (seven days) and uses all of the employee's time to the fullest, will certainly exceed the base wage, and will reach a level of overtime of 1.5 times or even 2 times the wage.

Especially in California, New York and such economically developed areas, here I put a few different cities and counties of the minimum wage, we do not look at here is written 14 dollars, 15 dollars, 16 dollars per hour, in real life, the hotel wants to hire in the market for such a small worker, at least 20 dollars, or even 25 dollars to the extent.

If you count another 1.5 times or 2 times, then it is not cost-effective for the boss. Then some people may ask, the problem of overtime pay is in most countries, why do we see in China most of the stores will not be closed for a day because of the problem of overtime pay?

Reason 2: High labor cost due to shortage of labor resources

It is actually due to the high labor cost in the United States. The United States is very rich in all kinds of resources, but one of the things it lacks a lot is actually cheap labor. Especially in the restaurant industry, which requires a large number of blue-collar workers, labor actually accounts for a large part of the cost.

Here open can I put a few U.S. restaurant chain financial statements, in which the cost of employees are in the operating costs accounted for sixty to seventy percent.

McDonald's 2022 annual financial statements

Starbucks 2022 Financial Statement

Shake Shack 2022 Annual Financial Statements

Krispy Kreme 2022 Annual Financial Statements

Chipotle 2022 Annual Financial Statements

Del Taco 2021 Annual Financial Statements

Cava 2022 Annual Financial Statements

Wow! It turns out that so much of it is employee wages! That being said there may be a counterargument, I see so many restaurants in the US that are open seven days a week as well, so don't worry, we'll come back to this part at the end of the video to reveal it.

Reason #3: Cultural Differences

Going back to the issue of restaurants not being open one day a week, there is also a cultural difference. Chinese people always want to maximize their profits and do all the business they can. But Americans don't think this way, and this also affects Chinese restaurants in the United States, as well as some Asian food, that is, Asian food. Americans still think that a week or need to have a rest time, can not be said to be working all the time, not 996, 007 this kind of scroll endless thinking.

Reason 4: Difference between supply and demand

The last is a supply and demand problem, China's restaurant industry is more competitive, then you do not open this one today, that business will immediately turn to another. But in the United States, after all, is relatively sparsely populated, like our home in this neighborhood, so the U.S. catering industry as well as many services are a seller's market, rather than a buyer's market. It's the same in Western countries, including Europe and Australia.

Second, why are some restaurants open seven days?

Now to fill in that hole dug in the middle of the video, there are some restaurants in the U.S. that are open seven days a week, and there tend to be three types of such stores

Type 1: Stores in shopping centers

Profit is high enough

Business in shopping centers is usually very hot, so for example, if you hire a small worker to do an hour over here, selling milk tea in an ordinary room along the street, you may sell ten or twenty cups in an hour, while in a shopping center you may be able to sell fifty or sixty cups in an hour. This means that the output rate of employees is higher if you open a store in a shopping center.

Commercial Lease Requirements

Commercial leases for shopping centers require that "all stores in the shopping center are required to be open as long as the center is open." See below for a common clause in commercial lease agreements that require the center to remain open:

This is done to make the shopping center look like it is always doing good business. Because shopping centers are geared to customers as a whole, if the shopping center is open but there are still scattered stores inside that are closing, it looks like business is slow. So owners who want to operate in a shopping center have to abide by the rules of the shopping center even if they have to pay overtime, but of course the shopping center has enough traffic to support overtime pay.

We will do a separate video explaining the laws related to commercial leases later.

Type 2: Cantonese restaurant, Sichuan restaurant, Hunan restaurant, steakhouse, etc.

Profit is high enough

From the examples given earlier, you should realize that those that are not open one day a week tend to be fast food, simple food, fried chicken restaurants, breakfast restaurants, noodle stores and the like. But the restaurant Cantonese restaurant, Szechuan restaurant, Hunan restaurant, these restaurants, or fried food store, often seven days a week are open. A big reason for this is that these prices are easy to set high, and there is enough profit margin to support employee wages.

Employee Rotation

Compared to those who can only afford to hire one or two or three or five employees of the simple food store, these restaurants that provide regular meals would have to employ ten or twenty employees, through the rotation of employees, that is, shift can be a good way to circumvent the problem of overtime pay, this person one, three, five, that person two, four, six, the length of each employee's work does not exceed the line of eight hours, 40 hours.

Type 3: milk tea store, coffee shop

Profit is high enough

Compared to the cost of food production in restaurants, milk tea store, coffee shop production is often still relatively simple, skilled workers a minute a cup of milk tea, a cup of coffee can be done, which makes the milk tea store, coffee shop have employees can create a high enough value.

Consumer psychological factors

There are also some consumer psychological factors to consider. People tend not to want to go down to the restaurant in the middle of the week, but for milk tea and coffee, there are people who want to drink every day.

Therefore, everyone should check the opening hours before going to the restaurant in the United States, and don't go there on an empty stomach like me.

Ten Things About US Labor Law, are the story of the boss and the employee, I am the American lawyer Liu Xiaoxiao, we will see you next time.