Report: Wage theft, paid sick law violations common among Seattle restaurant workers

Comet

Guild Seattle’s Joey Burgess spoke about how the bar’s ownership group was bucking bad trends during the report release event. (Image: CHS)

As the rise of Capitol Hill’s food and drink economy continues, a new report claims many of Seattle’s workers are not coming along for the ride. A survey of 524 restaurant employees by the labor group Restaurant Opportunities Center found many workers were poorly informed of their rights, faced unpredictable schedules, and are not properly compensated for working overtime.

Among the most concerning findings: only 37% of restaurant workers were aware of the city’s paid sick leave law and 74% reported that they don’t have access to it. Nearly a third said they were concerned they would be fired be if they called in sick. Moreover, a fifth of those surveyed reported working off the clock without getting paid.

According to the labor group’s study, Seattle’s restaurant industry employs 86,000 workers at 5,400 establishments.

The non-profit Restaurant Opportunities Center’s mission “is to improve wages and working conditions for the nation’s low wage restaurant workforce.” The group grew out of New York City and has since expanded to 32 U.S. cities. The Seattle report is part of a wave of survey results being released about inequity in the nation’s restaurant industry.

ROC-Seattle will be discussing its findings Thursday afternoon at the Comet along with Seattle City Council member Kshama Sawant.

UPDATE (3:30 PM): Speaking at the Comet on Thursday afternoon, ROC United co-founder Saru Jayaraman highlighted one finding in the report she found particularly troubling: Among Seattle’s “front of the house” workers, white men earned $5 more per hour on average over women of color. Thats a $1 more than national average, Jayaraman said. According to the report, white men earned a median wage (plus tips) of $18.83/hr compared to $13.55/hr for women.

“The tip schedule definitely hurt women of color the hardest,” Jayaraman said, referring to Seattle’s minimum wage law which gives smaller companies more time to get tipped employees to $15 an hour.

The study release event was the culmination of two years of interviews and analysis conducted by ROC-Seattle. It’s the 15th study the organization has completed on restaurant industries in cities and states across the country.

In an effort to crack down on wage theft, Sawant said she was pushing for a bill that would require employers found guilty of wage theft to compensate workers triple the amount they’re owed. “The report ROC has come up with really shows the urgency of the need to get bills like that passed by the City Council,” Sawant said.

Joey Burgess said that, despite the report’s findings, his career was one of the many positive stories to be found in Seattle’s restaurant industry — someone who rose in the ranks of the Capitol Hill-based Guild Seattle group to eventually become a manager and part owner in the group’s latest venture, Ernest Loves Agnes.

While doing research for a book, Jayaraman said she came across some sordid history related to tip credits. According to Jayaraman, the policy has its roots in a passenger train company that wanted to hire African American porters without paying them.

The event came on the heels of Sawant teaming up with Comet owner Dave Meinert to unveil her proposal for a small business rent control law in Seattle. Both Sawant and her Council District 3 opponent Pamela Banks released small business plans in the final month leading up to the November 3rd election.

The report notes that while Seattle has made strides in improving working conditions for restaurant workers, like passing the $15 minimum wage law, many are still finding it hard to make a career in restaurants.

… while the industry holds great prospects as a result of positive steps taken by legislators and high-road employers, many restaurant jobs in the Seattle area remain low-road jobs characterized by few benefits, low wages, and poor workplace conditions.

As expected, employees in fine dining restaurants were paid more than those in fast food, but they were also three times more likely to experience overtime violations, work off the clock, or work more than 8 hours without a meal break.

As part of the study, ROC-Seattle interviewed “high road” employers, including Meinert who was interviewed about how his employees at 5 Point Cafe are offered health insurance and a 401K retirement plan.

Lack of health care and health insurance among restaurant workers was also widespread. ROC-Seattle found that 88% of those survey said their employers offered no healthcare coverage and nearly 30% reported they had no health insurance at all.

Between April and July, the City’s relatively new Office of Labor Standards opened 36 investigations into wage theft complaints — the result of 789 employer inquiries and 99 employee inquiries. Since the paid sick leave law went into effect last year, OLS has recovered $30,931 for employees who were not properly compensated by their employers.

The first and only minimum wage violation case OLS has closed was against Homegrown sandwich shop, which has several locations in the city including one inside Capitol Hill’s Melrose Market. According to Homegrown co-owner Ben Friedman, the investigation was opened in May after Homegrown was found to be miscalculating their tip credit at all their Seattle locations. Friedman said all Homegrown employees were immediately paid back with interest.

Meanwhile, Capitol Hill restaurant openings roll on after hitting 100* in three years in January.

More report findings:

  • Women make up 22.6% of fine dining positions, compared to 57.2% of casual full-service restaurant occupations.
  • 56.7% of Asian workers, 59.8% of Black workers, and 77.4% of Latino workers worked in the Back of the House, compared to 47.8% of white workers.
  • 53% of workers reported daily schedule changes
  • 11% of workers said the had bent the emergency room without the ability to pay for it
  • 39% of workers said they were not paid the required 1.5 times their normal wage for working over 40 hours a week.
  • 6% of workers reported that owners take a share of their tips.
  • 59% of restaurant workers said they’ve worked while sick.

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13 thoughts on “Report: Wage theft, paid sick law violations common among Seattle restaurant workers

  1. I’m surprised to read that 88% of restaurant employers do not offer health insurance to their employees. That is a very high figure and I wonder about its accuracy. But there is an option for restaurant workers….coverage through the Obamacare exchanges….and I would guess that most, if not all, restaurant employees would qualify for a subsidy, and that many would qualify for Medicaid, which is excellent insurance and is free. Why are the 30% without any insurance not taking advantage of this option?

  2. While I do think that there are some valid observations that can be gleaned from the report, namely the low level of knowledge of the city’s sick and safe leave policy and the need for more outreach, I ask that people consider the source of the report. ROC United is a national organization with a very specific goal of organizing restaurant workers. It doesn’t mean that they’re not fighting the good fight on some levels- it just means that they have a vested interest in painting as bleak a picture of the industry as possible and their statistics and reports have historically been questionable. For example, last year they had a statistic on their website that listed the average wage of a Washington tipped employee as being $9.55/hour, only $.08/hour over the state minimum wage of $9.47. They were actually claiming that the average tipped worker made around 64 cents per 8-hour shift.

    Even as I glance over this report, there are a couple of things that catch my eye- their conclusions are about the state of Seattle restaurants, yet they surveyed people from all over King County. Where is the geographical breakdown of the surveyed employees? Were there fundamental statistical differences between those that are employed within the city limits and have a higher legislated wage and sick and safe leave versus those that are outside the city and do not have those policies? And as Bob mentioned, many do not have health care but many restaurant employees work at small restaurants where the cost of offering a health care plan is completely prohibitive. If the inference is that the restaurant industry is supposed to do a better job of offering benefits, then where is the breakdown regarding the difference in the size of the restaurants that do and do not offer health care to determine those larger restaurants with higher revenue that are not offering benefits? Finally, they report that their statistics on determining whether or not a person is at poverty level is whether or not they meet the Dept Of Labor’s Lower Living Standard to raise a family of three, a level which is 70+% higher than it is for a single person. Why are they using the family of three standard for poverty level for all survey responders? Why not use the poverty level appropriate to the specific responder?

    Those are just three of the questions that are raised within the first page or two of the document. Again, I am not saying that their isn’t work that can be done to improve the lives of restaurant workers in Seattle and even more so across the country. However, I would question whether or not this report from this organization is the most accurate source for determining the health of the local industry.

  3. I have many years experience in restaurant management and I have to say that even when health insurance is offered, many employees decline to enroll, even
    when the employer is picking up a good share of the cost.
    Why? Because restaurant workers, for the most part, are very young. They don’t want to pay anything for health insurance because they don’t believe they will need it.

  4. I’m surprised to see Dave Meinert’s name in this post at all, I’ve worked for his company for the past two years and lost lake is one of the worst as far as unpaid overtime and ripping people off for their sick pay. Fuck you Dave meinert, you lazy piece of shit. You only post your rants on Facebook to seem like you give a fuck when you only care about your hideously spoiled fucking children. Give a fuck about your employees, you rich antipathy motherfucker.

    • Having worked at several of Guild Seattles places (Mario’s, Comet and Lost Lake) from my experience these statements are pretty untrue. I clock in/out thru the POS and all my time is accounted for automatically; even when I hit overtime. If ive had an issue with a check or forgot to clock out its always taken care of by a manager. If you really are a LL employee I’d address this with Onjoli or Natalie ASAP. if they don’t take action then open a claim with the Labor dept thru their website.

    • You sound like a very disgruntled and angry employee. You must not value your job very much, as you are almost asking to be fired. Have you spoken personally with Dave Meinert about your grievances?

      • Comments like this are classic astroturfing. No way this person works at Lost Lake. They are most likely an employee of Working Washington, a labor front group funded by SEIU, who has a campaign of personally attacking anyone who even slightly disagree with any SEIU position. They dislike Meinert because he stands up for his opinions, and isn’t concerned with who he disagrees with on the right or the left. Working Washington is ruining civil political dialogue in this state.

      • Nah, have worked at lost lake for a while. Joey burgess, the guy in the photo… used to be the GM before he acquired large sums of money through the tip pool over the course of about two years, which he put into his shitty new venture, agnus and whoever the fuck, do we really need another themed restauraunt in this fucking town? Also, where do you get off saying anyone is out to make dave meinert look bad? They guy is a fucking joke and everyone in seattle knows it, the ones that rub their noses in his asshole are the ones who need him for their own ends…

  5. So many issues with this survey.
    First: They surveyed less than 1% of the workers in Seattle (0.6%), and some of the workers aren’t even in Seattle.

    Second: If you know anything about our local restaurant industry and you look closely at how they go from question A – to answer B – then deduction C, it is very flawed. It seems questionable how and from whom the got their information. Not surprising, it is done by ROC, which in itself makes it questionable, based on their motives and what they are trying to portray.

    Third: On the topic “What do Jobs Pay?”, The question should be… “What do jobs EARN”.
    The survey states… “Over two-thirds of the workers in the restaurant industry, 71%, are employed in positions that earn an hourly median wage below $12.25, the 2015 poverty wage needed to reach a low standard of living for a family of three in the metropolitan Seattle area…”.
    This falsely portrays the number of workers that are actually earning poverty wages. It only takes into account the hourly rate of base pay and ignores earned income, W2 income “Wages, tips, other compensation”, earnings that both employer and employee pay taxes. In reality, thousands of these same worker’s hourly rate of pay is below $12.25 per hour, but their actual earnings are well over $15 per hour, and the majority of servers and bar tenders in Seattle full service restaurants actually earn $25 to$45 per hour of income, sometimes more, yet according to this survey, they earn poverty wages. It is not accurate if you don’t included actual earned income. ROC is against a tipping culture, which may be why they paint a false picture. If you talk to most servers or bar tenders in Seattle full service restaurants, they like their tips, they want their tips, and they don’t want their tips replaced with a $15 hourly wage.

    It so happens that Sawant is doing this days before the election…. seems pretty fishy to me.

  6. It is so obvious Sawant is using this to grandstand with Meinert days before the election. It is incredibly disingenuous on both of their parts, as is her calling a press conference 7 days before the election to publicize a ferry tale small business plan, when she has had 2 years in office and could have worked with fellow council members and local businesses to develop a realistic plan that actually helps small businesses. Rather, she has been extremely divisive and has demonized local independent businesses and their owners, over and over again for the past 2 years. Suddenly five minutes before the election she claims to be fighting for small businesses, but she doesn’t have a clue what that entails, nor does she care.

  7. Question to Restaurant workers – have not worked in the industry for about 25 years. Managers really take your tips? I cannot come up with a reason in my mind when this would be justified. Can you take a moment and give an example or how the industry has changed to make this ok?
    When I leave a tip for my server it is always for the server. If I knew the manager took a share I’d have to bitch slap them.
    *disclaimer* not talking about coffee shops or other obvious tip pools.

    • Carol, it is my understanding that tips at most restaurants, even high-end ones, are pooled and some of the “server tip” ends up in the hands of other workers. Someone in the industry can correct me if I’m wrong.

      This sharing policy seems OK to me, but no way should any of the tip go to a manager or owner.