Where hourly labor costs leak, which numbers to watch, and practical controls that save money without hurting service.
A few minutes per shift adds up over a year.
Hours over 40 at time and a half.
More people than demand in quiet hours.
Manual entry and missed corrections.
Five minutes of early clock-in per shift, for 20 employees working five shifts a week at $18 an hour, is about $150 a week, or roughly $7,800 a year. Use our labor cost percentage calculator to see your own baseline.
| Measure | What it tells you |
|---|---|
| Labor cost as a share of sales | Whether staffing matches revenue |
| Overtime hours | Whether the schedule fits the work |
| Scheduled vs actual hours | Whether people work the planned shifts |
| Early and late punches | Time leaks around shift edges |
| Corrections per week | How clean your time data is |
Our guide on reducing overtime costs covers more options.
These shortcuts create wage claims that cost far more than the savings. See wage theft.
A restaurant with 28 employees saw labor cost creep up over the summer. A review showed two causes: servers clocking in 10 to 15 minutes early, and two cooks regularly passing 40 hours by Friday. The manager required approval for early clock-ins and moved one cook’s Saturday shift to a part-timer. Labor cost as a share of sales returned to target within a month, with no change to pay rates.
Labor cost control fails when it belongs to nobody. Payroll sees the numbers too late, and managers see the floor but not the totals. A practical split is that site managers own the weekly schedule and approvals, operations owns the targets and the scorecard, and payroll flags anomalies. Review the scorecard together once a month, and make sure managers see their own numbers every week rather than only at quarter end.
| Number | What it tells you |
|---|---|
| Labor cost % of sales | Whether staffing matched revenue |
| Overtime hours | Where the schedule broke down |
| Scheduled vs. worked hours | How well the plan held |
| Late and early punches | Small leaks that add up |
| Open shifts filled | Coverage pressure on the team |
Use our labor cost percentage calculator for a quick check.
EZTime connects the schedule to the time clock, so you can restrict early clock-ins to match assigned shifts. Real-time labor costing shows projected wage costs while you build the schedule, and labor rule alerts warn before employees cross overtime thresholds or weekly hour limits.
The numbers are fictional. A restaurant has 22 hourly employees at an average of $17 an hour. Most clock in a few minutes before their shift, and the average early punch is 7 minutes. Over five shifts a week, that is 22 × 5 × 7 = 770 minutes, about 12.8 hours a week. At $17, that is $218 a week, or about $11,300 a year, some of it at overtime rates.
If people are actually working in those minutes, they must be paid. The fix is not to edit punches but to stop early work: link the clock to the schedule so clock-ins before the shift are blocked or flagged, and make sure nobody is asked to start before their shift. Our time theft cost calculator shows the same math for your team.
Under the Fair Labor Standards Act, enforced by the U.S. Department of Labor, all time an employer suffers or permits an employee to work must be paid. Labor savings must come from the schedule, not from unpaid minutes.
Tap an answer to see whether you are right, with a short explanation.
It depends heavily on the industry and business model. Track your own trend and compare with similar businesses.
You can set rules on when employees may start work. If someone does work early, that time must be paid.
No. Some overtime is cheaper than hiring. The problem is overtime nobody planned or approved.
Weekly for the key numbers, and monthly for trends.
Not safely. If employees were working, the time must be paid. Prevent unwanted early or late work with schedule rules instead of editing punches afterwards.
Matching the schedule to demand by hour of day. Most teams find one or two slow periods each week that are overstaffed.
Try EZTime for 14 days, no credit card required. For a team of 15, EZTime starts at about $30 a month ($2 per employee).