Category Archives: Research & Resources

BKD Bay

Behind the Kitchen Door: The Promise of Opportunity in the San Francisco and Oakland Bay Area Restaurant Industry

In June 2016, ROC-The Bay released findings from one of the largest studies to date on the Bay Area’s restaurant workforce. “Behind the Kitchen Door: The Promise of Opportunity in the San Francisco and Oakland Bay Area Restaurant Industry” draws on 525 worker surveys, 41 structured interviews with restaurant workers, and 20 structured interviews with employers, along with other industry and government data. The report details a range of problems with restaurant working conditions related to the availability of benefits, hiring and promotion practices, workplace discrimination, and job-specific training opportunities.

Occupational segregation across the Bay Area is of particular concern, impacting the wages workers are able to earn. Workers of color experience a $6.12 wage disparity compared to white workers, and women experience a $3.34 wage disparity compared to men in fine dining occupations. This race pay gap is the largest ROC United has found around the country.

Key findings include:

  • The Bay Area’s restaurant industry is not a level playing field for people of color. White workers are more likely to work in higher-paying, Front-of-the-House positions, like bartenders and servers. Over half of all bartenders are white, despite being less than a quarter of the restaurant workforce overall. Additionally, workers of color are less likely to receive a raise or promotion than their white counterparts.

  • The same goes for women. Although they make up the vast majority of servers and bartenders, including servers in fine dining, they are dramatically underrepresented among bartenders in fine dining. Women surveyed made up 67% of all full service restaurant servers, and 84% of servers in fine dining, but only 41% of full service and 30% of fine dining bartending staff.

  • Wage violations are rampant. While service charges and tip pools that included Back-of-the-House workers helped balance income disparities between the Front and Back-of-the-House, they also created the potential for abuse as some employers used service charges to compensate supervisors, managers, owners, or to meet other business expenses. Additionally, workers expressed great concern over their ability to control their tips; a whopping 14% of respondents reported that management takes a share of gratuities earned on the job.

  • Exorbitant rent prices and gentrification are also of great concern. Restaurant workers in the Bay Area are paying on average $689 per month in rent, and must commute significant distances from lower-income areas with more affordable rents and sharing housing costs by living with more people. The average restaurant worker in the Bay Area lives in an apartment or home with 4 total residents, and 78.7% of restaurant workers do not work and live in the same city.

  • Many Bay Area employers are taking the High Road and offer living wages, access to benefits, training and advancement. Accordingly, they reported low employee turnover and high productivity as a result of living wages and access to benefits. However, some Bay Area employers lack formalized hiring, training, and promotion practices, and as a result, have reinforced occupational segregation in the restaurant industry.

  • Fair wages and benefits are still too often hard to come by. 52% of respondents report not having any form of health insurance coverage Additionally, twenty percent report having gone to the emergency room without being able to pay in the past year, nearly twice the rate we found in Seattle. Also, despite promising steps to raise wages for low-wage restaurant workers, 20% reported earning poverty wages.

  • Scheduling is anything but predictable. 26% of tipped restaurant workers experience frequent changes in their schedule, and an additional 50% of tipped workers sometimes experience changes in their schedule, compared to 16% and 43% of restaurant workers that do not receive tips. The majority of tipped workers are effectively expected to be on-call by their employers.

  • Workers are not receiving the raises and/or training they deserve. 73% of restaurant workers did not receive a raise in the last year, 22% reported they were passed over for a promotion, raise, or given worse shifts, 57% did not move up in position from their last restaurant job to their current one, and 54% do not receive ongoing job training.

  • Health and safety hazards abound. 91% of workers we spoke with have worked when their restaurant was understaffed. 28.8% reported doing something that put their own safety at risk. 29.3% have done something due to time pressure that might have harmed the health and safety of customers.

Read the full report.

Employer Liability cover

Tipped Over: Employer Liability in a Two-Tiered Wage State

“Tipped Over: Employer Liability in a Two-Tiered Wage State,” examines how rules necessary to regulate the subminimum wage system, including the so-called ‘80-20 Rule,’ create tremendous liabilities for both employers and employees in New York State.

The report underscores that a ‘one fair wage’ system, in which employers pay all workers, including tipped workers, a full fair minimum wage, is necessary to ensure workers are properly paid, and employers are not placed at risk of unnecessary liability.

The study — based on interviews with 40 restaurateurs from New York and nationwide, as well as workers and attorneys —  highlights the significant monitoring and liability incurred by employers in order to ensure compliance with the necessary regulations associated with paying a subminimum wage, as well the increasing gap between a growing minimum wage and a decreasing subminimum wage for tipped workers. This pairing incentivizes employers to increase the workload of tipped workers by shifting tasks away from non-tipped workers. For many employers, tipped workers are now the considerably ‘cheaper’ workers whose wages did not increase. As a result, the number of class action lawsuits filed by workers with regard to violations of regulations associated with the subminimum wage has also increased. “Tipped Over” documents restaurant employers’ experiences of costly liability arising from the complicated rules surrounding paying tipped workers a lower minimum wage.

Key findings include:

  • New York employers face an extensive set of regulations with which they must comply, including (1) strict notification requirements of tip sharing procedures (“tip pools”) that must be signed by each tipped employee; (2) strict prohibitions on including non-tipped employees in a tip pool; (3) strict requirements that tips actually make up the difference between the minimum and subminimum wage each week); and (4) strict requirements that not more than two hours, or 20 percent, of any shift, whichever is less, is spent in performing non-tipped work, or work that is not related to direct service (the ‘80-20 Rule’).
  • Time and money spent monitoring compliance with the above regulations tied to the subminimum wage, such as the ‘80-20 Rule’, prevents employers from spending time training and even hiring new staff.
  • Employers face a tradeoff when concentrating on lawsuits or on hiring: while small employers are better equipped to handle ‘80-20’ by limiting the number of service staff, liability prevents them from growing. Large employers are particularly concerned with the burden of liability, at times dissuading them from making additional hires.
  • A survey of federal lawsuits filed in the Southern District of New York, covering the New York City (NYC) area, and in the Central District of California, covering the Los Angeles (LA) area, show that restaurant lawsuits made up approximately 23 percent of the total in the NYC area in a state with a two-tiered wage system, while making up only 8 percent of the total in the LA area in a state with no two-tiered wage system.

Download the full report here.

DC report

The Case for Eliminating the Tipped Minimum Wage in Washington, D.C.

In collaboration with the National Employment Law Project (NELP), ROC United released “The Case for Eliminating the Tipped Minimum Wage in Washington, D.C.” in May 2016.

The report responds to legislation to raise D.C.’s wage floor to $15 and increase the subminimum tipped wage to 50 percent of the full minimum wage proposed by Mayor Muriel Bowser and the Council of the District of Columbia. While an improvement compared to current law, the Mayor’s proposal would nonetheless leave behind a significant number of low-wage workers—namely, the nearly 29,000 workers in D.C. that work in predominantly tipped occupations.  Under the current law, employers can pay these workers just $2.77 per hour, as long as tips cover the difference between the regular minimum wage and the subminimum tipped wage.

Being forced to rely largely, or entirely, on tips for income, D.C., tipped workers unsurprisingly experience poverty at nearly twice the rate of other D.C. workers,  and women feel the impact of the tipped minimum wage most acutely—women are twice as likely to live in poverty as the male tipped workers.  And despite the restaurant industry’s claims that tipped servers and bartenders earn high incomes in D.C., the median wage for tipped servers was just $9.58 per hour, including tips, between 2012 and 2015, according to the Bureau of Labor Statistics.  This median wage is just slightly higher than the full minimum wage for that period.

ROC-DC member Jessica Martin knows all too well the hardships of living off tips: “Working over 50 hours a week I still never received a paycheck because my wages were too low to cover taxes. We need One Fair Wage to lift thousands of DC workers and residents out of near poverty conditions and institutionalized worker discrimination.”

Tipped workers’ reliance on tip for income also forces them to tolerate sexual harassment and other inappropriate behavior from customers, co-workers, and management.  Workers in states with a tipped minimum wage like D.C. are twice as likely to experience sexually harassing behavior in the workplace, and over 90 percent of restaurant workers surveyed in D.C. reported experiencing some form of sexualized behavior while at work.

The evidence is mounting that the restaurant industry is thriving in cities such as San Francisco, Seattle, and SeaTac, Washington—all of which have approved a $15 minimum wage for all workers, including tipped workers.  Since Seattle passed its trailblazing $15 minimum wage, the number of food services and beverage industry business licenses issued by the city has increased by 6 percent.  The evidence also shows that a One Fair Wage system will not lead to the elimination of tipping or significant drops in tipping rates. The restaurant industry in D.C. can afford “One Fair Wage”—that is, the elimination of a subminimum wage for tipped workers in favor of one fair wage for all workers.

Find the full report here.

payroll card

The High Cost of Getting Paid: How Payroll Cards Cost Darden Employees

“The High Cost of Getting Paid: How Payroll Cards Cost Darden Employees,” examines Darden Restaurants’ use of payroll cards, which apply costly hidden fees to over a hundred thousand of their low-wage employees.

The study, based on an in-depth survey of over 200 Darden employees, examines the unsubstantiated claim that the cards are a convenient substitute to cash or checks for employees without traditional bank accounts. The findings show that thousands of low-wage workers at Darden are actually paying high fees just to access their own earned wages. In addition to detailing the many troubling impacts that payroll cards have on workers, the report also outlines a set of policy recommendations to protect Darden workers and can serve as a model to protect other low-wage employees nationwide.

Darden’s tipped servers reported special complications using the payroll card. In states where tipped employees earn the federal subminimum wage of $2.13 per hour, much if not all of their wages go towards paying taxes. For tipped workers, fees can create an additional barrier to accessing wages on the payroll card because fees amount to a larger percentage of their wages. This provides a disincentive for workers to access their wages via the payroll card and may have the effect of allowing Darden to shift the costs of doing business onto their already low-wage tipped workforce.

Key findings include:

  • 76% of employees reported having to pay fees to access their wages at the ATM.
  • 42% reported experiencing problems accessing their wages through the payroll card.
  • 24% of employees reported fees at point-of-purchase.
  • 63% reported that they were not told about all of the fees associated with the card before it was issued to them.
  • 49% reported that they do not have access to ATMs that do not charge them a fee to access their wages.
  • 26% reported not being allowed to choose an alternative method of payment to the Darden payroll card.
  • 23% of employees reported not being given instructions on how to use the Darden Card.
  • 54% of employees who used the card to fill up their gas tanks have experienced large authorization holds on their card as a result.

Recommended solutions for policymakers include:

  • Support legislation that eliminates the lower minimum wage for tipped workers.
  • Pass legislation that ensures workers have unlimited free access to the entirety of their wages.
  • Provide clarity to employers about how to offer payroll cards in compliance with the law.
  • Require that workers be clearly informed about card fees in multiple formats in plain English, supplemented by a hard copy of the fee schedule in the workers’ first language, before being issued their payroll card.
  • Allow workers to withdraw wages and verify account balances free of charge by telephone and at an accessible network of ATMs.
  • Ban inappropriate fees for basic account information, declines, overdraft fees, and other fees that constitute a barrier to a worker’s free access to their wages.

Find the full report here. 

 

Working Below the Line

Working Below the Line: How the Subminimum Wage for Tipped Restaurant Workers Violates International Human Rights Standards

In collaboration with the UC Berkeley Food Labor Research Center and the UC Berkeley International Human Rights Law Clinic, ROC United released the report “Working Below the Line” on International Human Rights Day, December 10, 2015.

The report finds the two-tiered minimum wage system violates several provisions of international agreements such as the Universal Declaration of Human Rights, especially for women and workers of color.

Under the current two-tiered wage system, federal law allows employers to pay workers who earn tips a subminimum wage of $2.13 an hour. As a result, several international human rights standards are not met for these workers, including:

- An adequate standard of living and to fair compensation: Although international labor standards require states to enable workers to maintain a suitable standard of living and to “just and favorable remuneration,” federal law allows tipped restaurant workers to be paid less than the regular minimum wage. As a result, these workers are at least two times more likely to live in poverty than the general U.S. population. “Wage theft” and other wage violations by employers is also a significant problem.

–  Protection from discrimination based on gender and race: Sexual harassment as well as gender and racial discrimination abound across the restaurant industry. One investigation concluded that workers in food services accounted for 37 percent of all claims of sexual harassment with the federal government during a 10-month period in 2011. Furthermore, workers of color in restaurant industry are concentrated in the lowest-paid “front and back of the house” occupations such as cooks, dishwashers, bussers, and runners while non-Hispanic whites are disproportionately found in higher paid “front of the house” positions like wait staff and managers.

– Health & Medical Care: Access to affordable basic and preventive healthcare is beyond the reach of many tipped restaurant workers. A 2011 survey of over 4,000 restaurant workers found that 90% did not have access to health insurance through their employer.

Find the Executive Summary here.

Find the full report here.

 

Working Below The Line

BKD Houston

Behind the Kitchen Door: Extreme Inequality and Opportunity in Houston’s Vibrant Restaurant Economy

Restaurant Opportunities Center of Houston’s latest report is the most comprehensive examination to date of the Houston-area restaurant industry, drawing on 553 worker surveys, 27 structured interviews with restaurant workers and 13 employer interviews, along with other industry and government data. The study offers a vivid picture of the state of the industry and makes recommendations to improve Houston’s economic development, public health and workplace conditions for the city’s restaurant workers.

Houston is America’s fastest-growing city and its vibrant restaurant industry has been called the “most dynamic and diverse food and drink scene in the nation.” However, research indicates that the restaurant workers whose labor makes Houston’s growth possible are being left behind. The majority of restaurant jobs in Houston remain low-road jobs defined by low wages, few benefits, and poor working conditions.

Key findings include:

  • 51% of Houston’s restaurant workers are paid an hourly wage that would not support a family of three above the poverty level. Workers also reported overtime and minimum wage violations, a lack of training, and unsafe workplaces.

  • 51.9% of restaurant workers of color earn below poverty wages, as opposed to 34.3% of white restaurant workers. White workers earn a median wage of $11.82, compared to $8.32 among workers of color.

  • Nearly all (93.1%) of surveyed workers were not offered employer-provided health insurance, and almost two-thirds (61.3%) have no health insurance at all. As a product of not having access to healthcare or paid sick leave, many workers are preparing and handling food while sick.

The report also offers solutions specific to policymakers, employers, customers, and workers, including:

  • For workers: Policy makers should support legislation that ensures workers have access to paid sick days, increase the minimum wage, and raise the subminimum wage for tipped workers to match the overall minimum wage. They should also support job-training programs, ensure that restaurant workers and their families have affordable access to healthcare, and protect workers from erratic scheduling and violations of federal, state, and local anti-discrimination and equal employment opportunity laws.

  • For employers: Adopt systematic and fair hiring and promotions practices — including anti-discrimination and harassment policies — and enhance job quality and employee retention by increasing wages and developing scheduling practices that meet both employer and worker needs.

  • For customers: Support responsible restaurant owners who provide fair wages, benefits, and opportunities for workers to advance.Speak to employers every time you eat out and let them know you care about livable wages, benefits, and opportunities for women and people of color to advance in the restaurant industry.

Find the full report here.