Article contributed by Valerie Bluth, Ellenoff Grossman & Schole LLP
The hospitality industry has been turned on its head as a result of the coronavirus pandemic. There are widespread restaurant and bar closures, and even those establishments that remain open for takeout and/or delivery are facing unique struggles.
It goes without saying that this pandemic has completely changed our way of life, and has people scrambling to regain some sense of normalcy. A big piece of that “return to normal” is a return to dining and drinking out. Many patrons and employees are asking the unanswerable question of “when will the restaurants and bars reopen?” but hospitality employers are focused on “what will the landscape really look like once we do reopen, and what obligations or challenges will we face?”
Legal and Practical Obstacles
From a legal standpoint, it is highly likely that restaurants and bars will face significant new and/or continued restrictions and obligations in how they operate. First, restaurants and bars will likely reopen gradually, with bars remaining closed longer than restaurants. This means that a so-called end to the various states of self-isolation will not restore businesses to their pre-pandemic levels, at least not immediately. There will still likely be limitations on capacity and perhaps hours of operation. There may also be newly imposed restrictions regarding table spacing, and congregating or eating at the bar may be a thing of
the past.
In addition, we have already seen overtures from, for example, the Governor of California that servers and other restaurant/bar staff may be required to wear masks and/or gloves. Beyond the cost burden on the employer, having your food delivered to your table by a masked and gloved server will undoubtedly be detrimental to the patrons’ in-person dining experience. There have also been rumblings about requiring disposable menus and dishware, glassware and utensils.
Further, the pandemic will likely make the hospitality industry’s labor shortage worse as restaurants and bars may be unable to adequately staff their establishments.
Even when we are permitted to dine out again, the virus will not completely go away. Accordingly, there may still be instances where an employee needs to take time off because they or a family member is diagnosed with, exposed to or feeling symptoms of coronavirus, or due to ancillary issues such as lack of childcare or senior care.
In that regard, even if an employee has no paid time off available from their employer’s regular time off policies once the business reopens, the emergency paid sick and family/medical leave provisions of the federal Families First Coronavirus Response Act (FFCRA) are presently in effect through December 31, 2020. It’s possible that there will be an FFCRA extension in the future, as it is presently unknown if there will be a resurgence of coronavirus down the road.
The FFCRA provides for up to 10 days of employer-paid sick leave if an employee is unable to work due to certain coronavirus-related reasons, including because they or their family member are sick or their child’s school or place of care has closed. The FFCRA also provides for up to 10 additional weeks of employer-paid extended family and medical leave when an employee is unable to work to care for their child if the child’s school or place of care has been closed or their child care provider is unavailable due to the current public health emergency. Workers who have been laid off or are presently furloughed are not entitled to those paid leave benefits, but once employees return to active work employers may face the need to both grant time off and to provide pay under already tight financial circumstances.
Further, as the current federal unemployment insurance supplement increases state unemployment benefits by $600 per week, some employees have begun to realize they can earn more by remaining on unemployment than by returning to their job. Though employees who turn down offered work are technically ineligible for unemployment benefits, given the present number of unemployment claims, government oversight of these jobless claims will likely be lax and the claims therefore harder to challenge.
Steps to Take When Reopening
By now, you may be thinking “what’s the point of reopening?” However, it is not all doom and gloom. While the dining and drinking landscape will inevitably change, and we cannot reasonably predict how, or for how long, there are numerous steps a restaurant or bar can take to better position itself for reopening and continued success.
To deal with the prospect of staffing shortages, employers may consider incentivizing employees to return to work instead of continuing to collect unemployment. In that regard, there are numerous low-cost strategies that will likely go a long way in bringing reluctant employees back to work. For example, employers can offer free or discounted food and beverage items or gift cards to employees who report to work. Employers may also consider conducting in-house training classes to cross-train staff, or an in-house management training program.
Enhancing the business’s safety and health program can also go a long way towards ensuring employees come to work even in the face of continued uncertainty about the coronavirus. In that regard, employers should be prepared to double down on safety and health practices, including stocking up on protective equipment such as gloves and sanitizing supplies. Employers should also encourage employees who feel sick or believe they may have been exposed to coronavirus to stay home.
From a practical standpoint, restaurants and bars can consider low-cost design changes to assuage employee and customer concerns about dining with the general public, such as installing Plexiglass dividers between tables, changing seating configurations or adding tables to a bar space. Restaurants can also consider installing glass tabletops and putting their menus underneath. Doing so makes the menu hands-free and the table easy to clean. Restaurants and bars might also consider moving to a counter pick-up system to avoid having masked-and-gloved servers deliver food and drink, or instituting order-via-smartphone capabilities to limit interaction between staff and patrons. These measures may not create a “normal” dining or drinking experience, but can allow an establishment to build a bridge to a time when this too shall pass while providing a safe environment for employees and customers alike.
Ensuring appropriate safety measures are in place is especially important because it is possible that employers may be subject to liability if an employee contracts coronavirus at work. Generally, when an employee contracts an illness in the course of their work, their exclusive avenue for redress is the employer’s Workers’ Compensation insurance. However, there has been some talk in Congress about changing the law to allow employees to bring a legal claim against an employer for failing to protect the health and safety of its employees with respect to coronavirus, as opposed to being restricted to filing a Workers Compensation claim.
Pay Close Attention to Your Employment Practices
As to those employees returning to work, employers should pay close attention to their pay practices, in particular with respect to tipped employees. In states, like New York, where hospitality employers are permitted to take a tip credit from the wages of tipped employees, if the employee does not earn enough tips to make up for the credit, the employer needs to make up the difference. Tipped employees’ tips will surely decrease from pre-pandemic levels as restaurants and bars reopen gradually and at reduced capacity. While this may never have been an issue for your business in the past, employers must pay careful attention to whether the employee’s tips are sufficiently making up for the tip credit. Additionally, as there may be decreased staffing levels, employers should also ensure that any exempt managerial employees continue to supervise at least two full-time equivalent employees or may face misclassification claims.
Finally, this pandemic has really underscored the need for clear, comprehensive employment policies, particularly those pertaining to time off from work. It has also highlighted the importance of an unambiguous disclaimer that an employer’s policies are not enforceable contracts. Such a disclaimer allows for flexibility without legal liability in the event the employer cannot reasonably or feasibly follow the policy terms to the letter. This pre-reopening stage is also a prime opportunity to ensure that your wage/hour and other employment practices are legally compliant, and that your policies are well-defined and understandable to the employee.
Above all, demonstrating a commitment to the wellbeing of staff and your customers will be an essential ingredient in the recipe for continued viability and success.
Valerie Bluth is a Partner in the Labor & Employment Group at Ellenoff Grossman & Schole LLP. For more than ten years, Ms. Bluth has exclusively represented and advised clients in employment-related matters, with a particular focus in the hospitality industry. Above all, Ms. Bluth works tirelessly to ensure clients are in compliance with an ever-changing landscape of federal, state and local employment laws, especially with respect to pay practices and employment policies, and to devise practical solutions for any employment problems that might arise. Ms. Bluth can be reached at (212) 370-1300 or vbluth@egsllp.com.
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