Nation's Restaurant News: Compensation: Pandemic forces restaurant industry to rethink wages, tip credit

By Nancy Luna
Nation's Restaurant News, Sep 16, 2020

As restaurants slowly return to dine-in service where they can, thousands of jobs have been restored. But how restaurants view and pay their workforce is evolving. ... Industry watchers say the pandemic and the Black Lives Matter movement have amplified the ongoing debate about paying restaurant workers a living wage and the inequities between the front and back of house, especially in “tip credit” states. ...

Since the beginning of the pandemic-related restaurant shutdown, most foodservice jobs were considered essential ... The work is risky, stressful and chaotic as daily safety procedures have been heightened tenfold to curb the spread of the highly contagious novel coronavirus. ...

Restaurant consultant Gary Stibel said brands that pay above minimum wage will reap long-term benefits, while those that “skimp” on pay will suffer when it comes to retention and service quality. ...

Texas is among 43 states and Washington D.C. that pay tipped employees the local minimum hourly wage for a tipped worker, which can range from $2.13 to $9.35 an hour. ...

Texas restaurant owner Adam Orman said business models must change to benefit all restaurant workers...

“You have to adapt a different model that spreads the money out so that everybody is making a living wage, but also so that nobody is making $2.13 an hour,” said Orman, co-owner of L'Oca d'Oro in Austin, Texas.

He is part of Good Work Austin, a network of employers who work together to bring change to the industry by advocating sustainability practices and paying a fair wage to all workers.

“You cannot let all of the gratuity stay with the servers and sacrifice the folks in the kitchen,” he said.

Though Texas allows a tip credit, Orman budgeted his labor without taking advantage of the payroll perk five years ago when he opened his casual Italian dining restaurant. ...

He’s hopeful the industry is ripe for change.

“We’ve just been getting so much more interest nationally,” Orman said. “Folks are talking about ways to create more justice in their restaurants and more equity and more diversity and the first step is always committing to wage equity.”

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Copyright 2020 Nation's Restaurant News

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