How the Pandemic Is Changing the Way Restaurant Employees Are Being Paid
Restaurant staffers and owners say this reckoning was a long time coming.
When Emily Blackman was a young server in New York City more than a decade ago, she would frequently get the same question. Well-meaning customers, in an attempt to make conversation, would ask: “What’s your real job?” While many restaurant workers in the city were trying to fund their dreams of being an actor, the implication was that, because of crappy pay and unstable hours, no one would choose to work in food service—that this was just a means to an end.
“I got to see the worst of it from an early age,” says Blackman, who started as a cocktail waitress in Fort Worth, Texas, and is now the sommelier at Bell’s in Los Alamos, California. “I was coming from Texas, where $2.13 is still the hourly rate for tipped employees and just feels so archaic.”
The conversation about restaurant workers not wanting to return due to inadequate wages, lack of health benefits, and generally abusive environments has been heightened for months now. But why did it take a global pandemic for people to start talking? And what are the powers that be actually doing to go beyond the Band-Aid fixes and actually create long-term solutions?
“We had to point the fingers at ourselves as owners,” says Robert LeBlanc, whose New Orleans-based restaurant group owns several properties including restaurant Cavan, bar Sylvain, and boutique hotel Chloe. “Because everything was always so busy, it was like trying to fix a train car going 80 miles-an-hour down the tracks. For people in hospitality, it gave them a pause to see what it would be like if you weren’t living in a perpetual state of anxiety.”
As opposed to the pressure of a hustle mentality that sacrificed personal healthcare, hospitality workers now had the time and opportunity to look for other, more stable career options. “We’re rebuilding the industry from the ground up,” says Nicole Marquis, owner of Latin-inspired Bar Bombón, cocktail bar Charlie Was a Sinner, and nine outposts of fast-casual concept HipCityVeg in Philadelphia and Washington DC. “Many employees went to work in different industries or were parents who didn’t have reliable healthcare and child care.”
In fact, when LeBlanc surveyed his employees last June, only about 20 percent of people wanted to return. “It’s lazy to say we can’t get people because no one wants to work,” he says. “You have to pay people more. This was the wakeup call everyone needed.”
The result, as we’ve seen, has been a shift in the power dynamic in food service. Restaurant owners are desperate to find employees as they reopen and potential employees are demanding a change in the system. There are debates on message boards about why future employees should have it differently than the generations before them, a real reckoning with the entire systematic approach to the restaurant business.
“This sea of opportunity mixed with a drought of employees is an indication that the previous incentive model no longer bears the weight it once did,” says Elizabeth Tilton, founder and CEO of Oyster Sunday, a consultant group that provides support for independent restaurants and food services. “While the instability in the restaurant industry is not breaking news by any means, the next generation has chosen not to opt in.”
Tilton says that, in the next few years, we will see restaurants change because employees are requiring consistency, compensation, healthcare, and benefits—in other words, a model that more closely resembles the corporate world. The breeding ground for these types of changes will logically be small, independent restaurants that could serve as a model for the rest of the industry.
This evolution is already happening at Bell’s, where Blackman works. The restaurant opened in March of 2018 by husband and wife Gregory and Daisy Ryan, who saw the systemic problems from the outset, but said the shutdown clarified things. “We realized that not giving our staff healthcare was so dangerous at a time like this,” Gregory says. “Daisy and I at a certain point were like, ‘Fuck it, we’re going to pay for everyone’s insurance.’”
That was just step one for Bell’s, which had the time to connect to service industry peers around the world and talk about best practices. One of the universal issues was pay inequity between back-of-house and front-of-house employees. “I could barely pay my sous chef, yet my server could make $80,000 a year because of the tipping model,” Gregory says. “We’ve always known that tipping is racist and misogynistic and that meritocracy needs to be involved.”
“It’s lazy to say we can’t get people because no one wants to work. You have to pay people more.”
Taking inspiration from the Black Sheep group in Hong Kong, Bell’s decided to no longer be a tipping restaurant, instead tacking on an automatic 20 percent service fee and exclusively serving a ticketed five-course, pre-fixe menu every night. This guarantees that the restaurant brings in enough money to pay its entire staff higher hourly wages and cover insurance costs.
“People assume we love tipping, but I’d rather be paid fairly across the board,” Blackman says. “When you’re paid an hourly, livable amount, it feels more validating. Having this kind of stability feels very new. There have been times where I’ve lived night to night, but now I can look a lot further into my future.”
But automatic service charges versus tipping isn’t always so cut and dry. In fact, when organizations like Restaurant Opportunities Center (ROC) and One Fair Wage have tried to plan strikes for tipped workers, they’ve struggled to get a lot of workers to participate.
“I am neutral on service charges being added to tables,” says Andra “AJ” Johnson, beverage director at Latin cocktail bar Serenata in DC. “I understand that when someone leaves a $1 tip, it hurts now more than ever. It should be at least 20 percent. And that should be written into legislation. When you raise the minimum wage, it should say in writing ‘$15 an hour plus tips.’”
The federal government, of course, can’t agree on an approach to solve the employee shortage crisis. One tactic is to reinvigorate the Raise the Wage Act for 2021, which would immediately lift the federal minimum wage to $9.50 an hour and incrementally increase it to $15 over the next five years. Other senators are crafting a “compromise” bill, which would involve an increase to $11 an hour. And certain politicians are arguing that, instead of raising the minimum wage for the first time since 2009, the best way to force people back to work is to cut off any supplements.
With all this congressional contention, it’s no wonder that small businesses are taking matters into their own hands and reimagining their model altogether.
At LeBlanc’s group in New Orleans, owners took a hard look at processes and realized they could eliminate about 75 percent of people’s unnecessary duties—like writing reports by hand—to focus on the top 25 percent—like biweekly meetings that focused on learning and development.
With fewer wasted resources, a greater percentage of revenue could go towards labor costs. Now employees are making higher hourly wages, the back of house is involved with guest service so tips are split evenly with the entire restaurant, and every employee gets two consecutive days off. Employees are now making almost double what they used to.
“If you lower your sales margins and establish a maximum sales capacity, you make it a much less expensive restaurant to start,” LeBlanc explains. “I would like to see this model work and be replicated throughout the restaurant industry, so it could become a great place to work.”
These changes are also happening in the fast-casual sphere. In April, Marquis and her restaurant group raised the minimum wage for its entire team to $15 an hour, despite Congress not successfully passing new legislation that would boost the existing wage from $7.25. The increase will begin in Q3 of 2021.
“I spend most of my time at this job, so being paid more gives me more comfort and security,” says John Watson, a cashier at HipCityVeg’s Broad Street location in Philadelphia. “I can now see this more as a long-term career option and a manager track seems more realistic. Plus, the higher pay will allow me to take some days off when I need to take care of myself.”
Marquis isn’t the only restaurant owner who decided to eschew the laws and take matters into her own hands. Claire Sprouse, the owner of Hunky Dory, an all-day bar and restaurant in the Crown Heights neighborhood of Brooklyn, says she has to work around antiquated legislation to create livable pay for her employees. (Fittingly, Sen. Chuck Schumer waited tables there in early June, in order to promote the Raise The Wage Act.)
“While the instability in the restaurant industry is not breaking news by any means, the next generation has chosen not to opt in.”
“New York is one of the few states where you’re not allowed to share tips among staff, so it makes it really hard,” she says. She turned to the solution of upping her food costs and including taxes in the prices in order to increase wages. “All those changes cost more money, it can’t just be workers fighting the good fight. From Albany to DC to the customer expecting a pizza slice to only be 99 cents, there needs to be a shift in mindset.”
In order for her employees to make an equivalent of $50-60,000 annually in salary and have two 30-minute breaks a day, the sandwiches they sell need to be $20. While the front of house makes less money without tips, they never get cut from services, even on slow, rainy weekends. So her staff knows exactly what paycheck to expect every week.
“Maybe once a week, we get a bad review about our food being expensive,” Sprouse says. “We got an especially interesting one the other day that said, ‘I love that they pay their staff a living wage and that they source local, sustainable ingredients, but $20 is too much for a sandwich.’ We can create these systems in our restaurants, but if guests aren’t receptive to the value of that, that’s the hard part.”
Indeed, while the cost of living for pretty much everything has fluctuated, food prices have stayed in a fairly stagnant state. “Food is more vocal than ever, service is expected to be top tier because of review sites, and food is still supposed to be cheap,” says Tilton of Oyster Sunday. “We should think of food more like airline tickets that fluctuate with demand.”
Beyond the solutions that increase pay checks right now, there are other innovations that get workers more involved with business leadership. A lot of restaurants nationwide implemented a co-op model where workers make decisions alongside the owners, like pizza spot Joe Squared in Baltimore. Others have put revenue sharing in place, so employees get both a wage and a cut of the profits, like at HaiSous in Chicago.
“I want to teach my team members the fundamentals of restaurants, how to run a business, be your own boss, and inspire them beyond cooking,” says HaiSous owner Thai Dang.
For Blackman, whose days as a cocktail waitress in Texas and struggling server in New York City feel like distant memories, the idea that terrible practices perpetuate because “that’s how it’s always been done” is finally, hopefully going extinct.
“I’ve paid my dues, so I know how I don’t want it to be,” she says. “Hopefully people are now finally learning from their mistakes. What you’re left with is a beautiful group of people that are paid accordingly and are in this industry because they love it and—at its core—it’s their career.”