Restaurant Workers Share the Stress of Lay-Offs in a Pandemic

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The global COVID-19 pandemic has laid bare the precarity—financial and health—faced by food service and hospitality workers even during the best of times. While foodservice is a $3.09 billion industry that employs 11.9 million people in the United States per a 2018 estimate, the people who do the actual cooking and serving often live paycheck-to-paycheck. The average yearly income for full-time employees is $32,261; part-time, $10,493. Paid time off and health care are minimally provided on a case-by-case basis with no guarantees. Work is often part-time and irregularly scheduled and, in most cases, a majority of income is based on a tipping model. Restaurant workers who are laid off now and being told to apply for unemployment will receive only a percentage of their taxable income, for the most part excluding cash tips that are often the bulk of their pay.

The federal government is debating what to do, and state and local governments around the country have taken minimal action. Restaurant employees (many of whom do not have health insurance) who are still working put themselves and their customers at risk for the disease, as they take public transportation to and from work and deliver food to customers’ homes.

Owners and workers alike are being told to fill out surveys so that needs can be assessed, but rent and bill freezes have not yet taken effect. There are no passed plans for immediate relief to either workers or restaurant owners.

Instead, workers rely upon relief funds and virtual tip jars that rely on the generosity of patrons who are also facing potential job loss amid the economic downturn [See this article for more information]. Restaurant owners cannot apply for emergency loans from the Small Business Association until cities are declared disaster zones, which hasn’t yet occurred in major metropolitan areas such as New York City and Philadelphia. There have been calls for government bailouts for restaurants from high-profile chefs, but these calls have not come with a mandate that funds would also take care of staff—or clear assessments of whether these staffs would technically exist now that there have been so many layoffs and restaurants will remain closed.

How is this already precarious workforce handling a time of worldwide uncertainty?

Mike, a server at a casual dining restaurant in New York City who would prefer to be identified by his first name only, said he has concerns about whether online fundraising will reach the people who need it most.

“There are huge pay disparities in this industry, and the food media tends to focus on the restaurants and their employees who are doing the best,” he says. “I worry about the mutual aid networks that have sprung up on Twitter; people posting their Venmos or saying tip 100 percent at your local. Because a lot of the lowest paid workers don't run in these circles. The dishwashers I work with aren't on Twitter, nor I imagine are the diner waiters. Any response needs to be progressive, providing as much for the people at the low end of the income spectrum and not reinforcing the wage disparities already present in our industry.” He was able to put away a few weeks’ worth of expenses as he watched the pandemic getting worse globally and will receive his maximum unemployment payout.

A bartender in Missouri who asked that her name not be used says that her restaurant dropped her health insurance coverage in January and her new plan doesn’t kick in until April. A co-worker has begun to exhibit symptoms of the virus, but testing hasn’t been available for those who aren’t considered high risk. Though the restaurant has closed, there has been no mention of paid time off. Since she relies almost completely on tips for her income, unemployment will not sufficiently cover her expenses.

In Austin, Texas, Jessica Long, who was a server at Elizabeth Street Cafe, faces similar uncertainty.

“As a tipped employee, I don’t know what paid time off would even look like for me,” she says. “How would they have determined our wages, since they vary from week to week? I know that unemployment usually only pays about 60 percent of your average paycheck, so that’s not great either. I live alone, don’t have a dual income, and have a car payment in a city where a studio apartment costs like $1500 a month. I’m not sure how I’ll get through this, since I can’t just apply for another service job; it’s different from being fired or quitting because no one else is hiring.  Luckily, I have some savings, but it’s not going to last long with rent the way it is, and I’m worried about my partner being able to pay his rent. A lot of questions up in the air still.”

Long hopes to see an aid packet released immediately to restaurant workers so that this period of unemployment is not followed up by a housing crisis, and says she’d also advocate for a move away from the tipped wage—an already controversial issue in the restaurant industry.

“I understand that restaurants work on very slim margins, but it’s going to have to be a shift in the consumer consciousness—for the people dining in and taking out to truly realize the cost of our lives,” she says. “They need to realize that meal prices need to raise significantly in order to cover our living wages—think $30 per hour, not $15 per hour, which is what they get paid in the kitchen if they’re lucky. Like, how much is the luxury of dining out really worth to them? Right now, they all seem to have their heads in the sand about it, and are happy deciding our worth individually at the end of service. Am I worthy today of paying my rent?”

A pizza maker in Chicago said her workplace has switched to only pickup orders, but management has not informed the staff of their plans for a total shutdown, and whether they will pay the staff or lay them off. “They have offered no alternatives in the case of sick leave or shut down,” she says. “I think paid time off or unemployment benefits would be great, but we are still operating with at-risk employees.”

All of the uncertainty hurts undocumented workers even more than citizens. Pew Research Center estimates 11 percent of foodservice employees are undocumented, roughly 1.3 million people. As such, they have fewer options for aid or unemployment, even though they pay taxes.

“The problem is: me and some of my coworkers don't have work permits,” says a server in Brooklyn who asked to remain anonymous. “What we do is we use a different social security number, and sometimes even a different name. This is a common practice in the hospitality business. Some companies have a system to detect if their employees are lying about their social security number and immigration status, but a lot of restaurants don't mind if we do [this], probably because they know undocumented immigrants will do the job at a low wage.”

For undocumented workers, paid time off from employers is the only financial option, as fraudulently filing for unemployment would open them up to prosecution and possible deportation.

Management at small restaurant and food businesses have faced similarly tough choices. Moshe Schulman, a partner at Ruffian and Kindred in New York City, realized after a 25 percent decrease in sales over the last weekend that it was best to shut the business down before the city mandate kicked in. All staff was laid off.

“We couldn't afford to operate another week with a decrease in sales and pay all of our labor costs,” says Schulman. “We believed it was in the best interest of our employees to immediately file for unemployment while the business can sort itself out and come back stronger and healthier.” 

Chris Kim, who owns Monk’s Meats in Brooklyn, has moved to a delivery-only model in an attempt to keep staff in work and increased their delivery zone. Because most of his employees are part-time and have multiple jobs, they’re not eligible for unemployment benefits.

“We as a business have a number of obligations in addition to payroll,” Kim says, that have led him to try to stay open. “Rent, which hasn’t been abated, including our storage unit for our seasonal equipment, loans and taxes, and our suppliers who we literally pay as we go. So any disruption in cash flow is nearly catastrophic up and down our chain.”

As more cities face mandatory restaurant closures, more workers will face these difficult and confusing scenarios. If the government does bail out restaurants, there will have to be assurances that workers will be paid as well. And once restaurants do reopen, the industry faces a reckoning about making sure paid time off and fair wages are a guarantee, not a bonus.

Alicia Kennedy is a writer and former foodservice worker based in San Juan, Puerto Rico.