- New York State employers must now grant workers eight weeks of paid, protected leave. That will rise to 12 weeks in 2021.
- Many restaurant staffers on leave will earn less than the minimum wage under this payroll tax-funded program, which pays one-half to two-thirds of a worker’s salary.
- There could be a fix for high-cost areas like New York City: San Francisco, for example, requires employers to share the burden of leave pay with the state program, ensuring that most workers earn their full salary while at home. NYC should do the same.
The United States remains the only major industrialized country without a paid parental leave program, and given President Donald Trump’s vague support for the issue in last week’s State of the Union address, the status quo does not appear to be in jeopardy.
Some of the country’s biggest corporations have stepped in to fill the benefits void: Starbucks offers six weeks of fully paid leave to baristas, Anheuser-Busch offers 16 weeks, and Netflix actually offers a full year. But in the greater hospitality industry — one of the country’s largest employers — just 6 percent of workers in 2016 reported having access to any form of paid leave, less than half of the national average.
The consequences of this reality are nothing short of devastating: The bulk of the nation’s culinary talent can find both their finances and job at risk if they perform the very basic and biological act of having a family.
A new law in New York, spearheaded by Governor Andrew Cuomo, will start to make things a little easier on new parents — but it’s still not enough, especially for lower- and middle-income restaurant workers.
Here’s the TL;DR on parental leave benefits in New York
As of January, most new parents in New York, or those caring for a sick relative, can take up to two months of job-protected leave while collecting up to half of their paychecks. By 2021, parents will receive up to two-thirds of their paychecks, and the leave time will increase to three months. The program is funded by employee payroll deductions, capped at $85/year.
The operative phrase is “up to.” The maximum weekly benefit, which will be earned by anyone making more than $68,000 a year, is $653/week. So an executive chef with an annual salary of $95,000 — well above average but not out of line for a top culinary professional — will only earn the equivalent of $16.30/hour, based on a 40-hour work week. That’s just 36 percent of her income, not ideal considering her rent doesn’t drop by 64 percent when she has a kid (the gender pay gap becomes a lot more real when the state cuts your wages in half).
On the lower side of the income spectrum, many waiters and cooks bonding with a newborn will earn well under the NYC minimum wage, which would make it nearly impossible for a single person to live in the city, never mind protect a new parent facing a world of financial obligations.
Is this better than nothing? Of course it is. But the state plan brings up the question of whether these policies are generous enough to actually allow metropolitan-area hospitality industry employees to take advantage of them at all. The answer is no, they’re not, which is why restaurants should be required by law to supplement the state leave program — just as they do in San Francisco.
No one should earn less than the minimum wage on leave
A little context first: Restaurant workers in any state are allowed to take unpaid leave, if they can afford to do so, and if they meet the strict qualifications of the federal Family Leave Medical Act. That law, which turns 25 this week, guarantees that new parents can stay at home for at least 12 weeks and then return to their job or a similar one. The catch is that it only applies to full-time staffers who have spent at least a year working for venues with 50 or more employees.
Translation: Many waiters, cooks, and bussers who hold multiple, part-time jobs to make ends meet, are left out.
The lack of federal paid leave, made worse by the FMLA’s insane eligibility requirements, is an “astonishingly unprogressive policy,” Eater’s editor-in-chief Amanda Kludt wrote in her 2016 inquiry, “The Restaurant Industry’s Motherhood Trap.”
Indeed, this hostile environment toward childbearing, combined with gender pay disparities and systematic sexual harassment and abuse in the hospitality industry, explain why women have a hard time rising to some of the highest-paying jobs in restaurant kitchens. Under 20 percent of the country’s head chefs are women, and those top female chefs earn on average just 78 cents for every dollar a male head chef earns — compared with 88 cents in 2014 or 97 cents in 2008, according to the U.S. Bureau of Labor Statistics.
Governor Cuomo’s new initiative deserves credit for plugging up weak spots in the FMLA. In addition to covering full-time employees at businesses of any size, the state leave program is open to freelancers and part-timers who work fewer than 20 hours per week. And there is no requirement to have worked for a full year before taking off; the threshold is 26 consecutive weeks for full-time employees, or 175 non-consecutive days for part-timers. Citizenship or immigration status does not affect eligibility. And employers must maintain an employee’s health insurance during the leave program. That’s really great news.
The not-so-great news is that scores of restaurant workers will still receive unacceptably low pay while on leave.
Consider the case of a cook in New York City, who makes the local average of $577/week. Under Cuomo’s plan, that cook would make half that, or $289/week during leave in 2018. That works out to just $7.27/hour, far below the prevailing minimum wage.
Restaurant workers will make less than minimum wage under Cuomo’s parental leave plan
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And these rates will go down even further after taxes are withheld. (Yes, parental leave pay is taxable income.)
These ignominies highlight a particular problem of the New York parental leave plan: Unlike the minimum wage, which currently varies from Long Island to New York City to upstate, the parental leave plan does not contain adjustments for the higher costs of living in certain regions.
To drive home how tough it would be to survive on the new leave plan, consider the following. According to the Economic Policy Institute, the monthly costs for a family of two with one child in New York City, after rent ($1,400 — good luck finding that apartment), health care ($1,030), child care ($1,045) and other expenses come to about $6,811. For our purposes we’ll subtract the child care number, lowering the total to $5,766; the point is to think about the period during which a father or mother is bonding with the child at home.
Let’s assume the cook earning $577/week, or $2,308/month, has a partner making $3,468/month, the NYC average for an experienced bartender. Even at full salary, the parents will be barely scratching by. Things will become a heck of a lot tougher with one parent’s pay cut in half, putting the couple’s monthly wages at well over $1,000 short of what they’d need.
And if they have another child in 2021 when the program is fully implemented, the mother’s pay rate will be about $9.65/hour, still well less than the future minimum of $15/hour.
Cuomo is surely aware that his program needs to be beefed up; that will take resources and time. But for now here’s a practical suggestion, albeit one that will also require resources: No one should earn less than the minimum wage while on leave. That needs to be fixed immediately.
San Francisco requires restaurants to pay parental leave
New York City, under the leadership of Mayor Bill de Blasio, could still do a lot to help fill the gaps that the state is leaving. The key is to take the right lessons from a city with a slightly different (and unfortunately shorter) leave policy: San Francisco.
Former SF city supervisor Scott Wiener realized that middle- and lower-income families ended up foregoing leave because the California state program, which pays roughly 60 percent of a worker’s salary for six weeks, wasn’t sufficient for the high-cost Bay Area. So he authored a bill that let San Francisco do what the city does best: It puts some of the burden on employers. Restaurants and other businesses with 20 or more employees are required to make up the 40 percent difference that workers are losing from the state program.
Quite simply: In San Francisco, a worker’s leave pay is equal to her regular pay — up to a certain point. And the “up to” part of the equation is a lot more generous than in New York State; that California figure currently stands at $105,404. That means even wait captains and executive chefs can end up earning their full salary during leave.
De Blasio should consider a similar plan: Anyone on leave at a restaurant or other business with, say, 11 or more employees — the limit that determines the appropriate minimum wage — should receive their full salary, with employers paying out whatever staffers lose through the state program. And the parental leave pay cap should rise from $68,000 to a number that’s a bit closer to San Francisco’s — at least $95,000.
To be fair, anything that increases the cost of doing business could be passed along to the consumer in the form of a price hike, and restaurants both in NY and SF say they’re already struggling to keep pace with a slew of new regulations, from the rising minimum wage, to the Affordable Health Care Act’s employer mandate, to mandatory sick leave, to the very real prospect of the state eliminating the lower tipped minimum wage.
But for what it’s worth, San Francisco’s restaurant worker population remains at a 10-year high — despite not having a tip credit, despite the city’s $15 minimum wage, despite the city’s leave program, which has been in place for over a year, and despite the state’s larger leave program, which came into effect over a decade ago.
This risk of repeating this experiment in New York is worth it.
NYC restaurants should share the parental leave burden, too
Some New York City employers are already making changes. As of 2017, all employees who have worked at Danny Meyer’s Union Square Hospitality Group for at least a year will be eligible for 100 percent of their full salary during the first four weeks of parental leave, and 60 percent for the second four weeks.
Claus Meyer, who runs Agern and Great Northern Food Hall, has recently bumped up his own family leave program to 50 percent of an employee’s wage at eight weeks paternity and 12 weeks maternity leave, with double that time available as unpaid leave.
The two Meyers surely have more resources than others to implement this policy. But it’s hard to believe other high-profile restaurant groups, which can afford to spend steep sums on say, publicists and social media coordinators, can’t figure out a way to make some form of parental leave sustainably work as a published, transparent benefit.
Talk to a high-profile restaurateur these days and one of the things they’ll eventually tell you is how the industry is being over-regulated. But there’s a reason for that over-regulation. The restaurant industry, despite its rising status, continues to provide some of the lowest-paying jobs in the country (and New York) and remains one of the biggest violators of wage laws.
If the largely male class of chef-owners and operators truly care about the professionalization of their industry, one of the smallest and most reasonable measures they could take is to contribute to the pay of their mostly female colleagues taking leave, colleagues who are already underpaid vis-a-vis their male counterparts. The fact that they haven’t consistently done this yet suggests that the only course of action is a legal requirement for sharing the burden on paid leave.
If San Francisco can handle it, New York can handle it.