As restaurants begin reopening dining rooms, many owners are tasked with bringing employees back from unemployment.
Some local restaurateurs say transitioning staff back has been an easy process, while others are worried employees will refuse to return to work after receiving weeks of unemployment benefits – which often pay more than the average wage.
Missouri’s maximum weekly benefit amount is $320 and the federal supplement from the coronavirus aid package passed in late March is an additional $600 a week, according to past Springfield Business Journal reporting. Federal payments are set to end by late July.
The restaurant industry has experienced a significant blow from COVID-19 – more than any other, according to the National Restaurant Association. The Missouri chapter recently reported the state’s industry makes up more than 230,000 employees, and a national survey by the association found 2 out of 3 restaurant employees have lost their job, while 4 in 10 restaurants had closed.
At least half of the 130 employees at Bawi Korean BBQ and Hinode Japanese Steakhouse in Springfield and Nixa took an unemployment offer, said Rosal Tapp, human resources manager for the restaurants.
The three restaurants remained operational during the last two months with a carry-out service to give employees an opportunity to work, Tapp said. Others wanted to stay home out of safety.
“We wanted to make sure that if they wanted the hours, then they had it,” she said. “A massive percentage ended up taking unemployment. We were basically on a skeleton crew in the beginning.”
With the loss of staff, the restaurant owners have been on the search for new kitchen employees, though Tapp said the market has been quiet. The Hinode restaurants are still closed for dine-in, but Bawi Korean BBQ has reopened its dining space with guidance from the city orders.
Tapp said she’s recalled all employees, but it’s unknown how many will return to work.
“It’s very possible some employees will decline that,” she said, adding 20 employees had expressed intent to return to work by press time.
Employees who have been temporarily laid off because of COVID-19 and refuse to return to work when recalled by their employer will lose unemployment benefits, according to a news release from the Missouri Department of Labor. The exceptions to the rule include those who have tested positive for COVID-19, have medical complications from contracting the virus, those who live with someone who has the virus or those who cannot obtain child care because of COVID-19.
An employee cannot refuse to work because they feel uncomfortable to return because of COVID-19, said Patrick Platter, partner at Neale and Newman LLP who practices employment law.
“Every single employee who is coming back from unemployment should get a written notice to return to work. If the employee declines to return, then the employer needs to report it in its usual portal for its unemployment compensation reports,” said Platter. “If they don’t need them before July 26, there’s nothing that requires employers to return their employees.”
Jimm’s Steakhouse and Pub reopened May 7 with carry-out and dine-in services after being closed for the month of April. Owner Jimm Swafford said nearly all employees have returned from unemployment, aside from a few individuals who are at a greater risk of infection. Swafford said all 78 employees are now being paid with funds from the federal Paycheck Protection Program.
“They must really like their jobs,” Swafford said, with a laugh. “I thought there would be a lot more push back than there was on that.”
Swafford said employees are required to wear a mask or shield when serving, hosting or greeting the guests, and a change of gloves is required when servers visit different tables. He said the separate rooms at the restaurant have worked in their favor with social distancing requirements.
On Commercial Street, restaurateur Joe Gidman also has welcomed most of his 50-person staff back to Cafe Cusco LLC, Van Gogh’s Eeterie and Chabom Tea and Spices.
He said many of his employees still have not received an unemployment payment for claims that were recently processed.
He said five employees have not returned to the restaurants.
“They’re anxious, they’re antsy. They want to get out and they want to work,” said Gidman. “We’re opening because it’s survival. This is the only income they have.”
He’s using an undisclosed amount of PPP funds to cover payroll costs and finding ways to put staff to work outside of serving, such as marketing and social media tasks.
Pat Duran, the owner of Metropolitan Grill, Great American Taco Co. and Hard Knox BBQ LLC, has gone a different route. He originally furloughed a majority of his 96-person staff in March but was able to start offering employees a higher wage with funds from the PPP after receiving the federal money in April.
Duran said after factoring customer tips, weekly earnings are comparable to unemployment benefits. He said the earnings vary based on the number of hours an employee works and declined to comment on an average wage.
“We wanted to maximize their wages during this time so they could get the maximum amount of benefits,” said Duran. “Plus, I feel like there is a lot of added risk for people that are working right now … so I feel they should be paid for that.”
Duran said he only needed to recall 60% of his employees because of a phased approach he’s taking to reopen his restaurants. He said he’s in the process of bringing back Great American Taco Co. employees over the coming weeks.
Some are participating in the state’s Shared Work Unemployment Compensation program, which allows an employer to divide work among employees, according to the Missouri Labor Department website. He said roughly seven employees from Metropolitan Grill are utilizing that program.
Elizabeth Wente, partner at Spencer Fane LLP who practices employment law, said the shared work program has been used across industries amid the COVID-19 pandemic.
“It’s a really good option for employers who have work but don’t have enough work to keep people busy full time,” Wente said. “Instead of eliminating jobs entirely, they can spread the work out.”
Wente said employees who participate in the program can also receive the federal unemployment money.
“Even $1 earned in the shared work program gets the $600 bump, which is quite the benefit,” she said.
Alternative to unemployment
Some restaurateurs say they were able to keep their staff from filing for unemployment benefits.
Chris Galloway, owner of PaPPo’s Pizzeria and Pub, said only a few of the 55 local employees took a temporary layoff by choice.
“We kept our employees the whole time, and that’s probably why we’re not fighting it,” Galloway said of staffing issues. “We were fortunate to have enough business coming in to keep all the employees we had. Our sales continue to go up, and we’re actually hiring.”
Michael Felts, owner of Hot Cluckers LLC, said he continued to pay his 15 employees their normal wages while the restaurant was closed for a month and a half. Felts said he just received funding from the PPP at about $20,000, which he said will be used for payroll costs moving forward. He said only two employees have not returned to work.
COVID-19 has also continued to stall his other restaurant plans, which had been adding up: another Hot Cluckers at the former Famous Dave’s storefront, Taco Habitat in Springfield and Branson, Bourbon and Beale near the Battlefield Mall and an undisclosed brewery concept.
“This whole thing has made me question if I want to be in the restaurant business,” he said. “Maybe I’ll sell them all off.”
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