Golden Glaze · Internal Ops
How we hire, pay, and classify shop crew — and the lines we don't cross.
Everyone on crew is W-2. We outsource the payroll math (recommend Gusto). We control overtime cost by managing the schedule — not by reclassifying people or restructuring pay.
Getting creative with classification or wage structure produces fake savings and real, sometimes personal, liability. The clean levers are staffing and scheduling.
We outsource payroll. We do not build it into Golden Ops.
Payroll tax liability is personal. When you withhold an employee's taxes and don't remit them correctly, the IRS can pierce the business and pursue the owner directly (the Trust Fund Recovery Penalty). Owning the code that calculates withholding, files quarterly 941s, remits on schedule, and issues W-2s means owning that liability with zero margin for a bug. Not worth it.
Recommended provider: Gusto. Best API for pushing hours in from Golden Ops, built-in W-4 / I-9 / direct-deposit onboarding (which also handles the new-hire document flow — we don't build that either), ~$40/mo base + ~$6/head, scales cleanly to 10 shops. One thing in our favor: we're Texas-only, so no state income tax and single-state filing keeps it cheap and simple.
Golden Ops → Gusto each pay period.Shop crew are W-2 employees. Full stop.
Classification is decided by the actual working relationship, not by what's written on a form. The core question is control: who sets the schedule, the process, the pay. Our crew are scheduled by us, clock in/out on our system, use our equipment, and do the core thing the business sells. That is a W-2 employee every time.
1099 for crew. Including "1099 during a training or observation period." Training is the highest-control period — it's the strongest W-2 case there is, not a loophole. (Unpaid "observation" is a separate violation: training time for non-exempt staff is generally paid working time.)
Genuine outside vendors running their own business for a defined job we don't control — the fryer-repair tech, a freelance designer, an HVAC vendor. That's the W-9 case. It's vendors, not crew.
Hire W-2 from day one with a 30–60 day introductory/probationary window. Texas is at-will, so we can part ways any day. That's an HR status, not a tax status — full flexibility, zero misclassification exposure. Gusto handles setup on hire and term in-system if it doesn't work out.
Cost of getting this wrong: back payroll taxes (both halves), back overtime for 2–3 years, penalties and interest — from IRS and DOL — plus lawsuit risk. A single unemployment or workers'-comp claim from one worker triggers the audit.
1.5× for hours over 40 in a workweek. Federal law (FLSA). Not optional, not something we set.
The workweek boundary is the setting everything keys off. OT must be summed per employee across all shops in the workweek — never per shop (see §5). The overtime-risk flag should surface anyone projecting past 40 mid-week, while we can still move a shift.
These come up a lot. They all fail, and several create exposure.
Any bonus employees can rely on is "non-discretionary" and gets folded back into the regular rate — so OT is recalculated higher, plus you owe a retroactive true-up on the bonus. A truly discretionary bonus (a genuine surprise, no formula, no promise) is excluded — but by definition nobody can count on it, so it doesn't retain or motivate. The version that works on people is the version that gets pulled into OT.
Setting a genuinely lower fixed rate is legal (down to the $7.25 TX floor) — but that's just paying less, limited by hiring and retention. Reverse-engineering a rate so the 1.5× brings everyone back to a predetermined weekly total is a "sham regular rate," which the FLSA specifically prohibits. The tell: if OT never actually costs more, it's a fiction. Same dollar outcome, opposite legality — it turns on whether the rate is real or a formula.
Low rate + off-book cash + "you'll work ~60 hrs, your call." Three fatal problems stacked:
When it surfaces — and 60-hour schedules breed the angry ex-employee who files — the bill is back OT for 2–3 years doubled (liquidated damages), their attorney's fees on our tab, IRS back taxes + fraud penalties, and possible criminal charges for willful violations.
If a worker splits time across shops, overtime counts on the combined hours. Separate LLCs don't reset the 40-hour clock.
Under FLSA joint-employment / single-enterprise doctrine, entities with common ownership and control are treated as one employer for the same worker. 30 hrs at Shop A + 20 hrs at Shop B in one week = 50 hrs = 10 hrs OT, and both entities are jointly liable.
| Setup | Do hours aggregate? |
|---|---|
| Multiple LLCs, same owner (us) | Yes. "Different LLC" is meaningless if the same person is the member on all of them — that's common control. |
| Centralized control (shared scheduling/pay/ops via Golden Ops) | Yes. The economic-reality test looks at who runs the day-to-day. Central control across shops is exactly the evidence that says "one operation." |
| Genuinely different owners, independent control (true franchise) | Generally no — shared brand alone isn't joint employment. But if independent owners coordinate to split a worker, that coordination itself can create joint employment. |
Because Golden Ops runs scheduling, pay, and ops across all shops centrally, our structure reads as common control regardless of how the LLCs are drawn. Assume hours aggregate until an attorney says otherwise. Do not build schedules that split a person across entities to dodge the 40 — that's a pattern auditors look for specifically.
Many rollups run a single employer / "common paymaster" entity that employs everyone and leases labor to each shop LLC — one payroll, one W-2 per person, OT aggregates naturally, and it removes the multi-EIN mess. Has tax and liability tradeoffs; decide with CPA + attorney.
A real manager can be salaried-exempt (no OT) — but only if all three tests are met. Title alone does nothing.
"Primary duty = management." A "shift manager" who mostly makes donuts, runs the register, and cleans — same work as the crew — and supervises on the side is NOT exempt, salary and title regardless. That "working supervisor" is the single most-litigated misclassification in fast food.
EAP (executive/administrative/professional): $684/week — $35,568/year. Highly-compensated employee: $107,432/year.
The 2024 increase (to $844, then $1,128/wk) was struck down in court and formally rescinded by the DOL in May 2026, reverting to 2019 levels. Texas has no higher state threshold. DOL may revisit — confirm before writing any offer.
Business catch: $35,568 across a 60-hr week is ~$11/hr effective — near minimum wage, and you won't retain a real manager there. Exempt is a tool for a handful of genuine managers, not a way to convert crew off OT. You can't salary-exempt your way out of paying the line.
This is the live question — because the alternative, paying every long-hours baker full overtime, gets expensive fast. Straight answer: not as the role looks today, but it can be redesigned into a legitimately exempt position if we do it for real.
The trap: the two duties that sound like the case for exempt — baking the product and ordering/inventory — are the two most non-exempt duties there are.
That leaves exactly one viable door: the executive exemption — which means management has to become their primary duty, not baking.
Redesign the position so running the shop, not baking, is the principal job. Baking stays — but as something they do while in charge, not their main value. Formally assign, and actually hand over:
Then put them on salary basis (no docking for hours), at or above the federal floor — realistically higher to retain.
When it actually saves money: a lead at $20/hr working 55 hrs non-exempt costs ~$1,250/wk (40 straight + 15 at time-and-a-half). The same person on a genuine $1,050/wk salary ($54.6k/yr) is exempt, flat regardless of hours — saves ~$200/wk and removes the week-to-week OT swing. The savings are real for a true long-hours lead. They evaporate if you set the salary too low to retain, or if the role isn't genuinely managerial.
Not "add responsibilities on paper to everyone so we dodge OT." That's the sham that gets struck down and turns into doubled back-pay. Exempt legitimately covers roughly one true lead per shop, and only where the shop is staffed enough that they're really managing people. The crew stays non-exempt and we manage their cost with scheduling. You can consolidate into fewer, genuinely-exempt leads — you cannot exempt the line.
Labor is the number we're trying to move. Here's what actually moves it without creating liability — and, just as important, the dead ends so nobody spends time on them.
The one rule underneath all of this: you can't make overtime free. There is no legal structure where hour 41 costs the same as hour 40. Every "trick" that tries — bonus swaps, wash-out rates, weekly re-rating, cash, exempting the line — collapses into wage theft or tax fraud and costs far more than the OT it was dodging. The real savings come from needing fewer OT hours and running a tighter operation, not from underpaying the ones you use.
Every one of these turns a manageable OT cost into a doubled-back-pay judgment, tax penalties, or worse. The math never works.
Not legal advice. This is an operating summary of federal (FLSA) and Texas rules as understood on Sept 17, 2026, prepared for internal planning. Before any of this becomes written policy — especially the probationary window, bonus structuring, multi-entity/common-paymaster structure, and manager classifications — run it past the company CPA and an employment attorney. Salary thresholds and DOL rules change; verify current figures at time of hire.
Golden Glaze · Internal — do not distribute outside the company.