SERVING IT RIGHT
As US eateries reopen, staffing a major worry
Restaurants are ramping back up as coronavirus lockdowns lift in US states. As they do, they are assessing both customers’ willingness to come back, and how many workers they will need in kitchens and socially-distant dining rooms.
One of the toughest calculations is proving to be just how far to go in staffing back up. Restaurant owners say they have little sense of how many consumers will feel safe to eat out again, and under what circumstances. They are also contending with employee health and safety concerns about returning to work, and the reality that many who come back are likely to earn much less than they do now on boosted unemployment benefits.
The expanded unemployment benefit signed into law in March provides laid-off or furloughed workers an extra $600 a week through July 31. Combined with state unemployment, the money is more than what the majority of restaurant workers earned before the shutdowns. Nationally, median hourly pay in food-service occupations was $11.65 in 2019, or $466 for a 40-hour week.
Some restaurant operators say they are reluctant to ask staff to return when paychecks might be lower than jobless benefits.
“It’s going to be a minefield, for sure,” said Cheetie Kumar, owner of the Garland restaurant, bar and venue in Raleigh, NC, about asking her 42 employees to return to reduced operations when her area gets the green light to reopen. She said she hopes to start a meal-kit program this month, but doesn’t want to rehire workers only to fire them again if she can’t get dine-in service running soon.
Many restaurant owners say the requirements of federal small-business stimulus payments work at cross-purposes with the expanded unemployment benefits. To avoid repaying the loans, recipients have to tap them within eight weeks and spend the bulk of the funds on payroll costs equivalent to spending before the crisis.
Responding in part to restaurants’ concerns, the Treasury Department said this week that recipients won’t lose loan forgiveness if workers refuse to return.
Still, some restaurateurs say the enhanced unemployment benefit is another reason it makes little sense to spend the loans on keeping idled workers on the payroll when they have more pressing costs, such as rent. Only 25 percent of funding under the Paycheck Protection Program, known as the PPP, can be used for rent and other qualifying expenses outside of payroll.
Kumar said she can only use about 35 percent of her loan money on labor, since her restaurant remains closedandNorthCarolinahasyetto saywhenitwillallowdine-inservice to resume. She fears having to repay theloanwithinterestintwoyears,as currently stipulated for recipients who don’t meet the payroll terms.
“I feel like I’ve been begging for a ticking time bomb,” she said.
Some restaurants, realizing that they can’t bring workers back for some time, say they aren’t spending their stimulus money. On a typical night pre-pandemic, The Conga Room in Los Angeles served hundreds of diners and revelers. Coowner Brad Gluckstein said he hasn’t tapped the hundreds of thousands of dollars he has received in small-business aid, since there was little point bringing back workers during the state lockdown.
“It was an ‘Oh my God’ moment,” said Gluckstein, who has furloughed or terminated close to 60 staff. “In all likelihood, we’ll just give it back.” Though California businesses began to reopen in phases last week, he anticipates it could be months before the Conga Room does.
Workers who do come back face fewer hours and substantially lower tips, since many states are mandating restaurants operate with capacity limits when they do.
Ed Doherty, a franchisee of 146 Applebee’s and Panera Bread locations across four states, said about 30 percent of the workers he has contacted have said they can’t return, often citing lack of child or elderly care, but he hasn’t reported them to unemployment agencies.
“That’s vindictive in my mind,” Doherty said.